An Econometric Analysis of Consumer’s Willingness to Buy Locally Produced Wine: A Study in the Mid-Atlantic U.S.

Abstract

US wine sales approached $60 billion in 2016, of which, an estimated $39.8 billion was generated from domestic wine sales and the remainder from imports. On average, 120 million Americans, age 21 and older, drink wine, which is approximately 36% of total population (330 million). Wine consumer demographic characteristics play a significant role in the wine consumption decisions. Results from a logit regression show that the following groups more likely to buy local wine than their counterparts for example: New York residents; consumers between 45 and 64 years of age old; males; those with annual household incomes between $76,000 and $200,000; participants with a bachelor's degree or higher; those who drink wine once a week or two to three times a week; those who purchase wine to consume during different occasions; those who purchase wine for everyday purposes to be consumed in their home; those who purchase wine to be added to their collections or to be consumed at a later time are more likely to buy local wine; those who often drink wine with food, when at a social gathering with family and friends, or at the end of the day to relax, are more likely to purchase local wine. The assessment of consumers' willingness to buy locally produced wine will help producers, wholesalers, and retailers target likely buyers based on segments.

Revenue Management Perspectives in Small-Farm Winery Operations

“…Participants also noted that competing against other countries in the market is getter tougher. Several countries including Argentina and Chile have steadily gained market share in the U.S. with very low-price points on their products (Govindasamy, Arumugam, Zhuang, Kelley, & Vellangany, 2018). Wholesalers increase the price of wine products typically in the 30% range over their acquisition cost when selling to retail outlets.…”