The Willingness to Pay for Cider Products: Results of a Survey on Habits and Consumption Behavior

Purpose

This paper aims to examine the impact of consumption habits and behavior on willingness to pay for cider (WTP) by surveying young consumers.

Method

This analysis is based on a survey distributed between December 2017 and January 2018 to 433 French business students. The questionnaire was designed to determine whether or not young consumers are willing to pay more for high-quality ciders compared to traditional sweet ciders of similar characteristics. Modeling the premium consumers will pay for organic ciders, farmer ciders, and rose ciders. The Heckman two-stage estimate is used to accommodate the fact that dependent variables have a large proportion of negative or zero premiums.

Results

The results show that young people consider cider to be a cheap, non-organic, and festive beverage. They are willing to pay more for high-quality ciders, such as rose and farmer ciders.

The conclusion of the article is:

This research has implications for both the cider market and the competitive beverage market, as well as understanding the characteristics that young consumers might prefer.

  • The following is a brief introduction to the topic:

Around the world, apple trees are grown in temperate climates. The history of cider production has been less well-documented (Watson, 2003). The majority of the world’s cider is produced in Europe, where the term “cider” refers to only fermented products. In Europe, England, Spain, France, Germany, and Ireland are the top cider-producing countries, with smaller quantities produced in Finland, Poland, Austria, and Switzerland. Cider consumption is also predominantly European, with Europe accounting for around 70 percent of the world’s cider consumption. The cider market has grown significantly since 2013. (AICV 2018). According to an IWSR report, a comparative study of the still wine, beer, and cider markets shows that the cider market is expected to grow the most in the coming years. This renewed interest by young consumers may be explained by the diversification and innovation of high-quality products such as flavored and iced ciders, cider roses, and Fabien Ouellet & Conner’s 2018. According to a Berenberg Research survey conducted in 2018, Generation Z (born after 1996) consumers drink less alcohol overall. They also prefer lower alcoholic drinks, ready-to-drink, or pre-mixed beverages.¬†[1]

  • Conceptual Framework

Like wine, cider is a beverage that offers a unique experience. It has varying characteristics that set it apart from other drinks. Unlike the wine market (Charters & Pettigrew, 2008; Fogarty, 2010), there is very little information on consumer preferences for apple cider (Sousa, 2014). Two common methods are used to estimate the consumer’s value of product characteristics. The first is hedonic pricing analysis, which correlates the price of a product with its features. This technique is used widely in the alcoholic industry, and in particular in the wine sector (Cardebat & Figuet, 2004; Lecocq & Visser, 2006; Oczkowski & Docouliagos, 2015; J.-F. Outreville & Lefur, 2020, survey) as well as non-alcoholic sectors such as water. J. F. Outreville & Le Fur (2010)apply this analytical approach to determine the price of apple cider and to emphasize the importance of high-quality products as well as geographical factors related to the region of origin.

The second way to estimate the willingness-to-pay (WTP) is by estimating the price that a consumer would pay for a unit of the product. This is the traditional economic view of reservation prices for consumers (RP). Bearden and others claim that this is the case. In 1992, WTP and RP were correlated. WTP could be considered the upper limit of RP (Kalyanaram & Little, 1994). Adaval & Monroe (2002) raise the question of stability because the measurement only applies to a specific moment in time and a particular environment. However, this methodology is widely used in the wine industry.

Didier et al. (2012) distinguish four types of consumption: basic, traditional, pleasure, and festive. Didier et al. (2012) identify four types of consumption – basic, traditional, and pleasure. They found that consumers have different preferences for certain characteristics in ciders but cannot value specific ciders or their characteristics. Tozer et al. The authors (2015) identified the craft cider characteristics that consumers value and prefer. They also developed a framework to conduct an objective analysis and determine the WTP of consumers using this framework. The WTP of cider is affected by a number of variables, including age, whether or not the participant drinks beer or cider, and sensory attributes such as taste, flavor, and aroma.

Habits are formed when consumers repeat their daily purchase and consumption behavior in familiar places. (Ji & Wood 2007) . Habits can influence future consumption (Pollak 1970, 1976). N. Barber et al. Thach & Olsen (2007) and (2006) were the first studies to examine the attitudes and perceptions of young adults towards wine consumption. Young adults think that wine is a great beverage to enjoy with food or at social gatherings with friends and family. Young adults also tend to drink alcoholic drinks outside, and they prefer beer and ready-to-drink beverages. No study has used the WTP method to determine whether young consumers’ habits and customs affect their willingness to buy a bottle of cider.

 

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