CONTENTS

An Ex Post Evaluation of Generic Egg Advertising in the U.S.

Manager's Viewpoint - American Egg Board

Manager's Viewpoint - California Egg Commision

Editor's Notes

Director’s Corner

Next Meeting

NEC-63 Spring 1997 March 21-22, 1997 New Orleans Economic Analysis of Industry-Financed Research and Promotion

Director's Corner

by Harry M. Kaiser

This issue of the NICPRE Quarterly is devoted exclusively to evaluating the economic impacts of generic egg advertising. The feature article examines generic egg advertising impacts nationally, while the second article looks at generic egg advertising impacts in California. The two articles are based on research projects by NICPRE that were sponsored by the American Egg Board and the California Egg Commission.

These two studies are particularly important and timely because it has been decades since an economic evaluation of generic egg advertising in the United States has been conducted. Per capita egg consumption in California, as well as the rest of the United States, has been declining for decades. Much of the decline in consumption is due to negative publicity stemming from the relatively high level of cholesterol in eggs. In response to declining consumption, egg promotion organizations shifted resources from nutrition research and education programs into advertising. For example, prior to 1990, the American Egg Board devoted no more than 10 percent of checkoff income to media advertising, while nearly 40 percent was spent on research and consumer education. Since 1990, the emphasis has shifted towards a larger share of the budget devoted to advertising. Currently, more than 50 percent of assessment revenues are allocated to advertising efforts.

Measuring the impact of generic egg advertising on producer profits is particularly crucial as groups such as the American Egg Board and the California Egg Commission determine how to allocate the additional assessment revenues generated by the recent increase in the checkoff rate between advertising, nutrition research, and education programs.