Testing Local Bias in Food Consumption: The Case of Fluid Milk

Khanal, Binod; López, Rigoberto A.; Azzam, Azzeddine

doi:10.2139/ssrn.3269848

Cited by 5 publications

(9 citation statements)

References 8 publications

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“…They find that local content essentially softens retail price competition, allowing retailers to earn higher margins and sell greater volumes when local content is emphasized. Khanal, Lopez, and Azzam (2020) provides the estimates of the degree of local bias in food consumption, which describes the tendency of consumers to favor local over nonlocal food.…”

Section: Introductionmentioning

confidence: 99%

Demand, challenges, and marketing strategies in the retail promotion of local brand milk

Liu

Chen

Rabinowitz

et al. 2020

Agricultural Economics

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This article addresses the demand and challenges for local brand milk and focuses on the marketing strategies for retail promotion. While federal and state government make efforts to promote local food purchases and consumption at the farm level, local foods face significant distribution challenges in grocers, especially in larger retail stores. Limited shelf space and high pricing by retailers impedes consumers’ purchases and results in weak competitiveness for local brands. Therefore, it is essential for local producers and “buy local” programs to understand what types of promotion and marketing strategies might be more effective in stimulating demand in retail outlets. Using 2010‐2011 Nielsen Retail Scanner data in the Northeast region, we estimate a random‐coefficient discrete choice model of demand to determine the effects of nutritional characteristics, price, packaging, and distribution strategies on the consumers’ choice to purchase locally branded milk. Results show that local brand milk faces significant demand challenges in addition to high prices and limited outlets in competing with lower‐priced products. Marketing strategies, such as price cut, one‐gallon package offering, and expanded presence in retail stores, can significantly stimulate the demand for locally branded milk, with one‐gallon package offering being the most effective strategy.

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Section: Introductionmentioning

confidence: 99%

Demand, challenges, and marketing strategies in the retail promotion of local brand milk

Liu

Chen

Rabinowitz

et al. 2020

Agricultural Economics

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“…Access to the Nielsen datasets was facilitated by the Zwick Center for Food and Resource Policy. This article replaces and updates a previous working paper (Khanal, Lopez, & Azzam,).…”

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confidence: 66%

Testing local bias in food consumption: The case of fluid milk

2020

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This article provides the first set of estimates of the degree of local bias in food consumption, by adapting the international trade notion of home bias, or consumers' tendency to favor domestic over imported goods, to local bias, which describes the tendency of consumers to favor local over nonlocal food. Using state boundaries to define local and household data on cow milk purchases from 2007 until 2016 in the New England region, estimates from the Armington model confirm a bias for fluid milk brands identified as local. [EconLit classifications: D12, L6, Q18].

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“…Jaenicke and Carlson (2015), for one, estimate the organic price premium for milk. In another study, Khanal et al (2020) investigate the extent to which households favor local over nonlocal fluid milk. Results reveal that non‐Hispanic whites, richer households, and household heads having at least a high school degree exhibit local bias.…”

Section: Discussionmentioning

confidence: 99%

Is competition among soft drinks, juices, and other major beverage categories responsible for reducing Americans' milk consumption?

2021

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US per capita milk consumption has been falling since the 1940s and falling at an accelerated rate in recent years. One possible reason is competition between it and other types of beverages. In this study, we determine whether changes in beverage prices are in a direction and of a sufficient magnitude for consumption trends to be explained by price competition between milk and other beverages. They are not. We also estimate a vector autoregressive model using data on households' average weekly purchases of milk and four other, major beverage categories for a very general test of whether any increase in sales of those other beverages would come at milk's expense. Results again suggest that competition between milk and the identified other major beverages is not responsible for milk's accelerated decline, and there is a need for the research community to investigate other possible explanations. [EconLit Citations: D12, Q11, Q18].

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Testing Local Bias in Food Consumption: The Case of Fluid Milk

Cited by 5 publications

References 8 publications

Demand, challenges, and marketing strategies in the retail promotion of local brand milk

Demand, challenges, and marketing strategies in the retail promotion of local brand milk

Testing local bias in food consumption: The case of fluid milk

Is competition among soft drinks, juices, and other major beverage categories responsible for reducing Americans' milk consumption?

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