A Hedonic Valuation of Health and Nonhealth Attributes in the U.S. Yogurt Market

Abstract

The U.S. yogurt category encompasses a multitude of subcategories including products carrying healthrelated attributes, some products targeting specific segments of the population (i.e., yogurt for kids), and others of recent introduction (e.g., Greek-style yogurts). Given the numerous attributes that can be present in a product, characterizing those leading to a higher premium can help manufacturers to engage in profitable product formulation. This paper investigates the role played by health and nonhealth-related attributes on yogurt prices in the United States, both at the national level and in different geographic markets, by means of a large scanner database of yogurt sales and a hedonic price model. The findings indicate that health-related attributes more commonly associated with yogurts such as the presence of probiotics, specific health claims, and other credence attributes (i.e., organic and "natural") are valued positively while others, which may lead to lower product acceptance (e.g., fibers, Omega-3) are not. Nonhealth-related features, such as "for kids" and Greek-style, show a positive market value, thus helping in product differentiation. The magnitude of the implicit price of most product attributes is found to vary across markets, hinting that food manufacturers should consider market-specific product formulation strategies to achieve product differentiation more effectively. [EconLit citations: Q11; Q13]. C 2015 Wiley Periodicals, Inc.

Effects of local and national advertising across brands: the case of yogurt in China

“…In addition to new flavours and tastes, health‐conscious consumers also demand yogurt with health benefits, such as the ability to improve immune system or help digestion. This trend in yogurt demand is consistent with that in the United States and Europe as yogurt is increasingly being regarded as a functional food with health benefits (Bonanno 2016; Bimbo et al . 2017).…”

“…Despite its growing importance, the demand for yogurt and other dairy products in China is understudied. As the Chinese yogurt market is increasingly differentiated, studies on the demand for yogurt predominantly focus on estimating consumer willingness to pay for some yogurt attributes (Moro et al 2015;Bonanno 2016). Little is known regarding the effect of advertising on the quantity of yogurt demand.…”

Consumers preferences on nutritional attributes of dairy‐alternative beverages: hedonic pricing models

“…These results can be possibly explained by consumers different attitudes toward these two vitamins. By analogy with Bonanno (2016)'s study which shows that fiber, a health‐related attribute in food products, is perceive unfavorably by yogurt consumers if the yogurt is enriched and fortified with fiber, even though vitamin A and vitamin D are considered as a beneficial nutrient, consumers might have negative attitude toward them when they are artificially enriched in dairy alternative beverages. Also, Willett (2013) indicates that when it comes to vitamins and minerals, the notion of “the more, the better” is incorrect since nutrients can be harmful when taken in amounts above what is considered beneficial and multivitamin is one of them.…”

“…Nepal, Rai, Khadayat, and Somanathan (2020) used hedonic pricing model to analyze the characteristics that affect consumer purchasing decisions on house units in Nepal based on sub‐sample of nationally representative household survey data from urban areas as well as primary data collected from one of the metropolitan cities. Bonanno (2016) used a hedonic price model and 2 years of weekly sales data of yogurts in eight Metropolitan U.S. markets to assess the market value of several health and nonhealth‐related attributes of yogurt, accounting also for their differences across markets. Even though hedonic pricing method has been widely applied in the area of agricultural commodities and other differentiated products, little work has been done to examine the link between the quality attributes and price differentials to explore the pricing mechanism of dairy alternative beverages and conventional milk products.…”

Valuation of nutritional and health claims for yoghurts in Spain: A hedonic price approach

“…Results from the most recent studies focused on yoghurts (Carlucci et al, 2013;Bonanno, 2015) have determined that extrinsic attributes best explain the final product price although in the markets with experienced consumers, some intrinsic attributes are significant. To determine the presence of NC and HC and the rest of yoghurt attributes, we created a database that collects information regarding yoghurt products available between July and September 2015.…”