Attributes of Ideal Soil Substitutes : Results of a Survey of Demand Sectors

-This paper describes preferences for attributes of ideal soil substitutes reported by industry demand segments, and relates those attributes to willingness to pay for soil substitutes. Regression results on principal components indicate that concern over product stability, safety and environmental protection induce higher willingness to pay for ideal soil products. -----KEY WORDS----compost, markets, principal components, product attributes Faculty Series are circulated without formal review. The views contained in this paper are the sole responsibility of the author. The University of Georgia is committed to the principle of affirmative action and shall not discriminate against otherwise qualified persons on the basis of race, color, religion, national origin, sex, age physical or mental handicap, disability, or veteran’s status in its recruitment, admissions, employment, facility and program accessibility, or services. Copyright © 1996 by Luanne Lohr. All rights reserved. Readers may make verbatim copies of this document for non-commercial purposes by any means, provided that this copyright notice appears on all such copies. Attributes of Ideal Soil Substitutes: Results of a Survey of Demand Sectors “Soil substitutes” are products that perform functions similar to soil, serving as a growth medium for plants, a filtering medium for precipitation, a host environment for biota and insects, and a support medium for structures. These products can be used in place of soil or added to soil to enhance one or more desirable characteristics, such as water-holding capacity, cation exchange capacity, soil tilth, particle retention or nutrient availability. Existing products in wide use include topsoil, potting soil, peat moss, sphagnum moss, vermiculite, bark and wood chips. Organic-derived materials such as animal manures, sewage sludge, yard trimmings (grass clippings, leaves, tree trimmings), and sawmill byproducts (bark and wood chips) may be dried or composted and sold as replacements for existing products. Organic-based soil substitutes may also open new market niches by providing desirable features that existing products do not. Transforming organic residuals into marketable resources may reduce disposal costs, produce revenues, and reduce environmental damage associated with disposal. Expectations about performance are critical to establishing markets for these products. Depending on feedstocks available and characteristics desired, soil substitutes may be formulated to target consumer needs (Willson). Software for process design to obtain desired outputs is available (Person and Shayya). The objective of this paper is to describe preferences for attributes of ideal soil substitutes reported by industry demand segments, and to relate those attributes to willingness to pay for soil products. This is the first research to address marketing characteristics in assessing desired attributes for soil substitutes. This information may be used by potential producers when evaluating local markets. 2 Data Collection for Attribute Ratings Markets for soil substitutes vary by the planned uses for the products. Industry groupings in previous studies used this type of functional delineation (Laliburty; Perry, Towles, and Fletcher; Slivka et al.; Kashmanian; Sheehan; Segall and Alpert). In this study, existing research on market segments and expert opinions of researchers, extension specialists and industry representatives were used to identify probable demand sectors. Twelve sectors were selected for evaluation: construction, florists, retail garden centers, golf courses, greenhouses, lawn care services, landscape maintenance and installation, nurseries, general retailers (hardware stores, supermarkets, discount chain stores), sod growers, wholesale suppliers, and vegetable growers. These sectors have been grouped as “horticultural” uses by Sheehan because their main interest in soil substitutes is using or selling them as a plant growth medium. A questionnaire booklet was developed following recommendations on question format and survey design by Dillman. The introduction to the questionnaire described waste products as “animal manures, sewage sludge or yard waste.” Respondents were assumed to have familiarity with some soil products made from organic materials. Thus, only brief descriptions for composting and drying, the usual forms for marketing, were provided. Respondents were asked to conceptualize an ideal product and then rate the importance of a list of 47 characteristics for that product, given the choices “not at all,” “slightly,” “somewhat,” “very,” and “extremely.” In the analysis, these answers were assigned integer values from 0 (“not at all”) to 4 (“extremely”). The total number of responses varied slightly across the attributes because some respondents chose not to rate certain attributes. The attributes were selected to address concerns of the industry groups, based on previous studies (Laliburty; Perry, Towles, and 3 Fletcher; Slivka et al.; Kashmanian; Sheehan; Segall and Alpert). The attributes were presented in six categories guaranteed chemical analysis, freedom from contaminants, aesthetic product specifications, handling characteristics, product costs, and manufacturer attributes. Respondents were also asked whether they had purchased soil substitutes as defined by the survey in the previous year, whether they would purchase the ideal soil substitute, what price they would pay for their ideal soil substitute, whether the ideal product would replace or add to existing items, and which of six products dried or composted manures, sewage sludge or yard waste would be most acceptable to their customers. To account for the variety of industry groups, the price question was open-ended, allowing the respondent to fill in the units as well as the price. All other responses were interpreted as binary variables for analysis. The survey questionnaire was mailed to 1,995 businesses in Michigan in July 1992, with postcard reminder and followup questionnaire sent in subsequent weeks. The sample was selected randomly from within the industry categories provided by the agencies. The number selected from each group reflected an estimate of the likelihood of market development for soil substitutes in the category, the need to obtain sufficient responses to be statistically representative of the group and to perform econometric analysis, and the overall budget for the survey. Of the 1,897 valid mailings, 775 respondents returned either partially or fully completed questionnaires, for an overall response rate of 40.8 percent.