The Importance of Intrinsic and Extrinsic Sparkling Wine Characteristics and Behavior of Sparkling Wine Consumers in Croatia

ABSTRACT

Sparkling wines accounted for 7.7% of the total wine consumption in 2011 in the world. Even though sparkling wine remains a long way behind still wine in total volume of production, world consumption of sparkling wine is expected to grow at a faster rate with an 8.5% increase by 2016. Although Croatia is a country with a high residual per capita consumption, the share of sparkling wine consumption compared with total wine consumption amounts only 1.3%. To collect data on Croatian sparkling wine consumers’ behavior and attitudes, we performed online research with 273 consumers. The research confirmed the low frequency of sparkling wine consumption. The most important characteristics of sparkling wines for Croatian consumers are their intrinsic characteristics (taste, smell) together with price:quality ratio, while visual appearance, expert reviews, or wine prizes are less important. Consumption of sparkling wines is generally associated with specific celebrations. Due to such perception of exclusive wine use, there is a need to break down this prejudice by better sparkling wine promotion through wine-tasting events, seminars, and gastronomy offers, especially for younger consumers.     

U.S. Demand for Imported Wines

The U.S. is viewed as a lucrative market outlet for surplus wines produced in the leading wine exporting countries in the world. Structural U.S. import demand functions were estimated for French, Italian, Spanish, Portuguese, and German wines as well as for those that are U.S. produced. The equations were estimated with two-stage least-squares because of simultaneity between quantity demanded and price. Direct price, cross, and income elasticities were calculated to determine the degree of competiveness among the various wines of differing origin. Two separate groups of wine were identified. First, U.S. produced, French, and German wines were in one group. Spanish, Portuguese, and Italian wines comprised the second group. The latter group also encountered competition from the first group of wines.     

Brand Personalities of Global Wine Exporters: A Collective Reputation Theory Perspective

This study examines the perceptions of the personalities that wine drinkers attribute to the wines of the six top exporting countries. An exploratory study with an inductive approach was used, and data were collected from 757 wine consumers from 22 countries. Based on the collective reputation theory, we question the use of standardized versus localized strategy when approaching international markets by the top producers of the world. By means of correspondence analysis, our results indicate that each wine producer country tends to have a different positioning among consumers from different regions of the world. Besides, it is evident that a standardized approach to marketing and promotion of a specific country’s wines to global markets could be viewed as rather myopic, representing a gross oversimplification of reality, and contradicting what our findings reveal about differences in global consumers’ perceptions of wines from the big six producers.     

Demand for Domestic and Imported Table Wine in British Columbia: A Source-differentiated Almost Ideal Demand System Approach

The premium quality wine market in British Columbia has grown substantively over the past decade. However, few empirical studies exist to quantify how consumers have responded to these wines. This paper employs a source-differentiated almost ideal demand system (AIDS) model with time-varying parameters to estimate the demand for premium quality wines using scanner sales data from the British Columbia wine market. The empirical findings reveal that consumers' response to foreign-produced wines differs from that for wine produced locally. It is evident that the expenditure elasticities for British Columbia, European and Rest-of-the-World white wines are larger than those for red wines. The high expenditure elasticities associated with British Columbia white wines may suggest that these wines are associated with higher quality. We reject the hypotheses of block separability and product aggregation. There is no evidence of structural change from the tests employed in this paper.     

Drinking cheaply: the demand for basic wine in Italy

The wine market has evolved dramatically over the last three decades. The premium wine segment has expanded significantly to the detriment of basic wines. Nevertheless, in traditional wine producing and consuming countries, inexpensive wines still account for a large market share, both in volume and value. Marketing strategies for such wines are changing in an attempt to tap this increasingly crowded market segment. Despite its importance, the basic wine segment has not been studied in‐depth and is often assumed to have no product differentiation. This paper tried to ascertain the existence of a possible degree of heterogeneity within nonpremium wines and to measure, by means of elasticity computation, the relationships among categories of wines aggregated with criteria that go beyond price. A demand system (censored QUAIDS) was estimated, using a statistically representative panel of 6,773 Italian households, to see to what extent, if any, substitution occurs in home consumption of basic wines, which is the main channel of distribution of inexpensive wines in Italy. Although price is an important lever in supply policies, our results also suggest the importance of packaging, such as carton as an alternative to glass.     

Alcohol Tax,Price–Quality Proxy and Discounting: A Reason Why Alcohol Taxes May Rebound

The increasing concern about the external costs of alcohol consumption has often led economists and policy‐makers to advocate taxes to internalise the social costs and target consumption. However, in certain markets for alcoholic drinks – particularly wine – price is not only a cost but also an indicator of quality, guiding consumer choice. There is, perhaps, a higher probability of ex post satisfaction with products at higher prices in a market with potential adverse selection. The price–quality proxy interacts with discounts, where the full price of the product before discount (referred to as the External Reference Price in the marketing literature) is used as a quality reference. This study shows that an alcohol tax in the presence of discounting may increase the perceived value of the product, and therefore persuade consumers to prefer the purchase of more expensive wines with the highest discount. As a consequence, consumers could favour products with higher alcohol content – which contradicts the objectives of the policy. Consequently, for an alcohol tax to be effective discounting of alcoholic beverages (in particular, wine) should be regulated to avoid the policy backfiring.     

Label Style and Color Contribution to Explain Market Price Difference in Italian Red Wines Sold in the Chinese Wine Market

This study employs a hedonic price methodology to investigate the implicit price of individual labelling characteristics of Italian red wines sold in the Chinese market. Our results highlight the most important quality attributes (extrinsic and intrinsic) given in the label capable to explain price difference. In particular, reveal significant premium price for wine origin, identified in particular through the DOC/DOCG appellation given in the label, and for clean labels or labels with particular designs. On the contrary, a price discount has been revealed for Italian wines produced with local grape varieties and with a label characterised by warm colors. These results, partly in disagreement with other empirical evidence, contribute to enrich the existing literature in this field by providing useful suggestions both to the producers and other stakeholders operating in the wine industry.     

The Need for a Marketing Reform: The Wines of the Loire Region

ABSTRACT

This article focuses on how the French wine industry and, in particular, the wine-producing Loire region in France is affected by global and domestic factors. An overview of some of the vast regulations prevailing in the French wine industry that prohibit the wine producers to compete efficiently, especially with the wines from the “new world,” is provided. A Strengths, Weaknesses, Opportunities, and Threats (SWOT) analysis is used as the tool to study the competitiveness of the French wine industry in general and the Loire region in particular. The French wine industry is too fragmented and subjected to too many controls and, as a result thereof, is not flexible enough to respond to market opportunities. French wines have the unique blend of “historical intangibles” of romance and mystery that have been part and parcel of wine for many centuries. This advantage is no longer a major competitive advantage, and the time has come to make decisions on which of the vast range of regulations are worthwhile to maintain to contribute positively to the best interests of the French wine industry.     

In Vino ‘No’ Veritas: impacts of fraud on wine imports in China

China is one of the largest wine importing countries in the world and is poised for continued import growth in the future. Increased wine purchases throughout China have given rise to persistent fraud where fake wines are packaged and sold with counterfeit contents and labels. For exporting countries like France, counterfeit wines displace market share, damage foreign brand reputation, and cause distrust in consumers who are aware of counterfeiting problems throughout the country. We examine the impact of fraudulent wine events (as measured by negative media reports) on Chinese wine demand differentiated by supplying country. We employ the Rotterdam demand system and a switching regression procedure to estimate import demand and compare results across different media variable specifications. Results consistently show that negative reports disproportionately affect French wine regardless of how the media variable is specified. This is not surprising because most fraudulent events involve French wine counterfeits.     

Imports versus Domestic Production: A Demand System Analysis of the U.S. Red Wine Market

The U.S. wine market experienced rapid growth in all facets—production, consumption, exports, and imports—over the past decade. Red wine imports more than tripled while consumption of domestically produced red wines doubled. This research estimates demand elasticities of U.S. red wine imports from five countries accounting for over 90% of imports—Italy, France, Spain, Australia, and Chile—using the first-difference version of the almost ideal demand system (AIDS). These elasticities are compared with those for domestically produced red wine. Results for conditional expenditure elasticities indicate that the U.S. red wine industry gains over imports when U.S. consumers' total expenditures on red wine increase. However, comparing own- and cross-price elasticities reveals an increase in the price of U.S. red wine results in a decline in quantity demanded six times greater than for French and Italian red wines and over 20 times greater than other import countries, thus harming the U.S. red wine industry. Empirical results suggest that U.S. red-wine producers could increase their total revenue by decreasing prices, while Italian and French producers can increase total revenues by increasing them.     

贵州茅台酒文化分析与发展策略研究

作为三大世界名酒之一的茅台被称为我国的"国酒"。各国科学家和消费者对茅台酒也是好评如潮。茅台酒中包含着丰富的酒文化,通过研究茅台的酒文化,可以看到中华民族的发展史。因此,要特别重视茅台酒文化的传承与发展。本文主要对贵州茅台酒文化进行对比分析,为未来贵州茅台酒的发展提出一些建议。     

Who gains from Australian generic wine promotion and R&D?

The present paper estimates the distributions of aggregate returns from different types of research and promotion investments by the Australian grape and wine industry among grapegrowers, winemakers, domestic and foreign consumers, and the tax office. The results show that most of the gains from cost-reducing R&D in grape and wine production go to producers and that producers get a far larger share of the benefit from export promotion than that from domestic promotion. Foreign consumers of Australian wine also enjoy a significant share of the benefits from Australian R&D. Sensitivity analysis shows that the key results hold for a wide range of parameter values.     

Is Dry Aging for Pork Relevant to Consumers?

Introducing a new product is tricky because of potential problems with consumer acceptance. Dry aging is a technique that could make meat more tender, but at the expense of the color that would become darker. This technique is widely used for beef, but it could be useful in the pork industry since the increasing offer of lean meat has reduced its natural tenderness. We investigate Italian consumer preferences for dry aging applied to pork loin and the effect of information on consumer acceptance. A sample of 264 consumers was surveyed in June 2014 in Bologna, Italy, using a hypothetical rank-based conjoint analysis. Data were analyzed using a rank-ordered logit (ROL) approach. Results suggest that consumers preferred dry-aged pork loin to fresh pork loin. They also preferred products labeled with Italian origin and having low fat content. Factors affecting the intention to purchase dry-aged pork loin are age and information on dry aging.     

Valuing Quality Attributes and Country of Origin in the Korean Beef Market

For beef exporters, one of the important questions in the Korean beef market is why Korean consumers are willing to pay almost three times more for domestic Korean beef than they pay for imported beef. To answer this question, we surveyed 1,000 shoppers in Seoul, Korea, and conducted a conjoint analysis on consumers’ willingness to pay (WTP) for country equity of domestic vs. imported beef and quality attributes of marbling, freshness, genetically modified organism (GMO)‐free feed ingredients and antibiotic‐free production. Among all factors contributing to the price differentials, the most important factor seems to be the country of origin followed by the use of GMO feeds and antibiotics in beef production, marbling grade and freshness. This study finds that Korean consumers value origins of imported beef approximately $14/lb less than the Korean origin. Korean consumers’ valuation of beef quality and country of origin differs by some demographic groups: older vs. younger generations, homemakers vs. non‐homemakers and consumers who prefer to purchase packaged beef vs. consumers who prefer to purchase butcher shop beef. Our empirical findings suggest that the top priority for beef exporters who wish to increase sales and value of their beef in the Korean market must be to counter Korean consumers’ strong ethnocentrism by improving the value of their country of origin.     

Consumer Valuation of Environmentally Friendly Production Practices in Wines,considering Asymmetric Information and Sensory Effects

Agricultural producers and food marketers are increasingly responding to environmentally friendly cues from consumers, even though privately appropriated values associated with a range of food products commonly rank above their public‐good counterparts. Wine can be considered an ideal product to examine these issues given consumers’ highly subjective sensory preferences towards wine, and a winegrape production process that is relatively intensive in the use of chemical inputs for the control of disease and infection. Semi‐dry Riesling wines made from field research trials following environmentally friendly canopy management practices were utilised in a lab experiment to better understand preferences for environmental attributes in wine. A combined sensory and monetary evaluation framework explicitly considered asymmetric order effects. Empirical results revealed that sensory effects dominate extrinsic environmental attributes. Once consumer willingness to pay (WTP) was conditioned on a wine’s sensory attributes, the addition of environmentally friendly information did not affect their WTP; however, adding sensory information significantly influenced WTP initially based only on environmental attributes. The results confirm the idea that promoting environmentally friendly winegrape production practices would increase demand and lead to higher premiums for the products, but are only sustainable if consumers’ sensory expectations are met on quality.     

Consumer sorting and hedonic valuation of wine attributes: exploiting data from a field experiment

This article uses a novel experimental approach to measure consumer willingness to pay (WTP) for wine attributes. We invited customers of a local supermarket who had selected a bottle of wine to purchase to participate in a valuation experiment. Integrating their original wine choice into the experiment, each participant evaluated six alternative wines, generating a rich set of data on willingness to pay and consumer characteristics. The data from the experiment allow us to compare standard shelf price‐based wine attribute valuation estimates with estimates using WTP data and an increasing amount of information about individual consumers. The full model employs individual fixed effects to estimate WTP parameters without bias from consumer sorting or supply side influences. Our WTP estimates for wine attributes differ markedly from previous attribute value estimates. Consumers in our sample display clear and stable preferences for wine varieties, but less clear preferences for appellations. Our results suggest caution is needed in using market prices to estimate parameters of the consumer valuation function for product attributes.     

French Wines on the Decline? Econometric Evidence from Britain

French wines, differentiated by geographic origin, served for many decades as a basis for the French success in the British wine market. However in the early 1990s, market share began to decline. This article explores the values that market participants placed on labelling information on French wines in Britain in 1994. Results from a parametric hedonic approach indicate that both the lack of a consistently positive valuation of varietal wines and the low valuation of wines with geographical appellation help to explain the overall decline of France's role in the British wine market.     

The Importance of Geographic Wine Appellations: Hedonic Pricing of Burgundy Wines in the British Columbia Wine Market

To examine the buying habits of British Columbia (BC) wine consumers and their appreciation of French wine attributes, we estimate a hedonic price function for Burgundy wines which comprise an array of different appellations, vintages, and alcohol levels. BC ranks among the top three wine-consuming provinces in Canada and residents' wine preferences are likely linked to an emerging sophistication in tastes. This study uses weekly retail sales data and attributes of Burgundy wines reported by the BC Liquor Distribution Branch. The results confirm the collective reputation effects of the Burgundy wine region and show that the implicit values differ between white and red Burgundy wines with village designation and vintage having a relatively larger effect on white wine prices than in the case of red wines. Burgundy white wines, such as Aloxe-Corton, Chassagne-Montrachet Premier Cru, Meursault Premier Cru, and Chablis Grand Cru, were associated with larger price premia. Afin d'examiner les habitudes d'achat des consommateurs de vin de la Colombie−Britannique et leur appréciation des caractéristiques des vins français, nous avons estimé une fonction de prix hédoniste des vins de Bourgogne d'appellations, de millésimes et de degrés d'alcool variés. La Colombie−Britannique figure parmi les trois provinces canadiennes où l'on consomme le plus de vin, et les préférences des consommateurs de vin découlent probablement d'un raffinement des goûts. Dans la présente étude, nous avons utilisé les données des ventes au détail hebdomadaires et les caractéristiques des vins de Bourgogne fournies par la Société des alcools de la Colombie-Britannique (BC Liquor Distribution Branch). Les résultats confirment les effets de la réputation de la région viticole de la Bourgogne et montrent que les valeurs implicites diffèrent entre les vins de Bourgogne blancs et rouges, et que l'appellation «village» et le millésime influent davantage sur les prix des vins blancs que sur ceux des vins rouges. Les prix des vins de Bourgogne blancs, tels que Aloxe-Corton, Chassagne-Montrachet Premier Cru, Meursault Premier Cru et Chablis Grand Cru, ont présenté des primes plus élevées.     

Marketing Olive Oil Products in the Tunisian Local Market: The Importance of Quality Attributes and Consumers' Behavior

This article is, to the best of our knowledge, the first investigation of Tunisian olive oil consumer behavior by the use of the conjoint analysis technique. The conjoint experiment was based on carefully selected olive oil attributes: type, taste, color, packaging, region of origin, and price. The results have important implications to improve the marketing of olive oil in the local market by focusing on key preferred attributes. Consumers were found to prefer more extra-virgin, followed by virgin olive oil, to pomace oil. They also showed higher preference for green colored olive oil with strong flavored taste. Contrary to a common belief in Tunisia, the region of origin attribute did not show significant effect on consumers’ purchasing decisions. The results show also that Tunisian olive oil consumers are price sensitive and therefore any price strategy to introduce bottled products should take into account consumers’ preferences for bulk purchase.     

Consumer’s Preference and Willingness to Pay for Apple Attributes: A Choice Experiment in Large Retail Outlets in Bologna (Italy)

ABSTRACT

We analyze the relevant quality attributes of apples which drive and influence consumer choice in the city of Bologna (Italy). A hypothetical choice experiment was conducted to elicit Italian consumer’s willingness to pay for apple attributes and was included as a part of a questionnaire survey. A group of 301 consumers were surveyed in Bologna in July and August 2016. Data were analyzed using a multinomial logit model. Results suggest Italian consumers are willing to pay more for yellow apples and for apples harvested in Trentino-Alto Adige region, compared with other Italian areas. Furthermore, results highlight a preference for locally produced apples, whereas organic apples are only slightly preferred to the not organic alternative. Results of this study could be used to develop marketing strategies for apple differentiation or for a new product development and target the right product to the right consumer.