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<OL> <LI> Develop an activity based costing (ABC) system to assess current and future costs of food safety processes; <LI> Implement the ABC system to assess incremental costs of implementing food safety processes and compare these costs to improved health inspection scores; <LI> Develop a net present value (NPV) framework based on the ABC system and consumers perceived benefits of safe foods and train commercial foodservice corporate and unit level managers to implement the NPV based decision making framework; <LI> Develop and implement controlled real-time choice experiments to assess consumers willingness-to-pay price premium for safe food attributes and changes in purchase frequencies; <LI> Provide food safety information to consumers to help them assess quality of food safety processes based on key attributes of safe foods.
NON-TECHNICAL SUMMARY: Commercial retail foodservice organizations such as restaurants, grocery stores, and gas stations typically do not account for food safety costs and benefits. Lack of this information could prevent owners and managers of these foodservice organizations from making informed decisions about implementing HACCP-based food safety processes. The goal of this project is to address this critical gap in management decision-making for justifying food safety expenditures. An assessment framework based on essential financial management principles for food safety expenditures will be developed and implemented. Specific objectives in the project include: 1. develop an activity based costing (ABC) system to assess current and future costs of food safety processes; 2. Implement the ABC system to assess incremental costs of implementing food safety processes and compare these costs to improved health inspection scores; 3. Develop a net present value (NPV) framework based on the ABC system and consumers perceived benefits of safe foods. 4. Train commercial foodservice corporate and unit level managers to implement the NPV based decision making framework; 5. Develop and implement controlled real-time choice experiments to assess consumers willingness-to-pay price premium for safe food attributes and changes in purchase frequencies; and 6. Provide food safety information to consumers to help them assess quality of food safety processes based on key attributes of safe foods. With half of all meals eaten away from home, it is important to agriculture to ensure the safe handling of food to prevent food borne illnesses and associated costs.
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APPROACH: This study will combine field observations, health inspections, and controlled consumer experiments to assess cost-benefits of current and desired food safety processes. Up to 3 units from each of the 12 foodservice organizations representing restaurants, grocery stores, and gas stations will participate in this study. The financial decision-making system will be developed with a sub-group of 6 organizations. The system will then be implemented in these 6 plus additional 6 organizations to verify its validity and reliability. Up to 3 units from each of the two sub-groups will participate in this process of developing and implementing the financial decision-making system. Once this system is finalized online training modules will be developed and other units of the 12 participating organizations will be invited to test-use the system. Feedback from this online test will be gathered to further improve the system. The system and related information will be then widely distributed. Novel real-time experiments will evaluate consumers perceived benefits of food safety. Data will be analyzed using qualitative methods and discrete econometric models. The consumer experiment data will be used to develop conditional demand and pricing predictions for various consumer groups. This information will also be incorporated in the financial decision-making system. Results of the consumer surveys will also be used to identify potential gaps in consumers knowledge about food safety. This information will be used to develop web-based consumer information package. This training will also be evaluated to ensure its effectiveness. Finalized consumer information package will be widely disseminated via government and private consumer information networks.