Consumers Will Pay a 46% Premium for Locally Produced Hard Cider
Consumers are willing to pay a significant premium for hard cider identified as 'locally produced,' indicating a strong market opportunity for regional brands.
International Journal of Wine Business Research · 2021
Key Findings
- 01Consumers are willing to pay an average premium of $3.22 for local hard cider compared to a reference product priced at $6.99.
- 02Preferences for local foods, urbanization level, frequency of alcoholic beverage purchases, and shopping venue significantly influence the premium amount.
- 03Attributes such as sweetness/dryness and the absence of preservatives are also important considerations for consumers.
Application
Design takeaway
Designers and marketers should emphasize the 'local' aspect of hard cider through clear labeling and branding, and tailor product attributes like sweetness and ingredient lists to align with consumer preferences identified in this research.
How to apply
When developing or marketing a hard cider product, clearly label it as 'locally produced' and consider offering variations in sweetness and preservative-free options. Research the specific consumer demographics and shopping habits of your target market to refine marketing strategies.
Project actions
- 01When researching a product, consider if 'local' or 'origin' is a significant selling point.
- 02Think about how to visually communicate the 'local' aspect in your design.
- 03Investigate which product attributes are most valued by your target audience.
Method & Evidence
Variables
Strengths & Limitations
Strengths
- +Large sample size provides statistical power.
- +Utilizes established econometric models (probit) for willingness-to-pay analysis.
Limitations
The specific premium found might vary greatly depending on the type of product and the region. This study focused only on hard cider.
Reliability & validity
The use of probit models and a large sample size enhances the reliability and validity of the findings regarding willingness to pay. However, self-reported willingness to pay can sometimes differ from actual purchasing behavior.
Think critically
How might the 'local' premium differ for essential goods versus luxury or discretionary items like alcoholic beverages?
Design Principles
"Leverage perceived value and origin to justify premium pricing."
Understanding consumer willingness to pay for local products is crucial for market entry and pricing strategies. This insight can inform branding, marketing campaigns, and product development for beverage producers aiming to capitalize on the 'local' trend.
What This Means for Your Design
People will pay more for hard cider if they know it's made nearby. Things like how sweet it is and if it has preservatives also matter to them.
How to use in your project
- 1.Use this research to justify investigating consumer willingness to pay for a locally sourced or produced item in your design project.
- 2.Refer to this study when discussing market research and consumer demand for products with specific origin claims.
Add to My Project
Quick Cite
(2021). Consumer willingness to pay for locally produced hard cider in the USA. International Journal of Wine Business Research. https://doi.org/10.1108/ijwbr-06-2020-0029 Retrieved from https://designdex.org/study/34cb61fe-613d-462c-8a8d-33189a2faa30/consumers-will-pay-a-46-premium-for-locally-produced-hard-cider
Paragraph starter
Research indicates a significant consumer willingness to pay a premium for products identified by their local origin. For instance, a study on hard apple cider found consumers would pay an average premium of 46% for locally produced beverages, suggesting that emphasizing local sourcing and production in branding and marketing can enhance perceived value and justify higher price points in the market.
Source
International Journal of Wine Business Research
Consumer willingness to pay for locally produced hard cider in the USA
journal · 2021
View sourceQuestions about this research
- What does the research say about consumers will pay a 46% premium for locally produced hard cider?
- Designers and marketers should emphasize the 'local' aspect of hard cider through clear labeling and branding, and tailor product attributes like sweetness and ingredient lists to align with consumer preferences identified in this research. Evidence: International Journal of Wine Business Research (2021).
- Why does "Consumers Will Pay a 46% Premium for Locally Produced Hard Cider" matter for design?
- Understanding consumer willingness to pay for local products is crucial for market entry and pricing strategies. This insight can inform branding, marketing campaigns, and product development for beverage producers aiming to capitalize on the 'local' trend.
- How can designers apply this research?
- Designers and marketers should emphasize the 'local' aspect of hard cider through clear labeling and branding, and tailor product attributes like sweetness and ingredient lists to align with consumer preferences identified in this research.
- What were the main findings?
- Consumers are willing to pay an average premium of $3.22 for local hard cider compared to a reference product priced at $6.99.. Preferences for local foods, urbanization level, frequency of alcoholic beverage purchases, and shopping venue significantly influence the premium amount.. Attributes such as sweetness/dryness and the absence of preservatives are also important considerations for consumers.
- What research method was used?
- Quantitative analysis of survey data using probit and multivariate probit models. with 875 participants.
- How strong is the evidence?
- Evidence strength is rated Strong effect, based on a 2021 journal from International Journal of Wine Business Research.
- What should I do differently in my next project?
- When developing or marketing a hard cider product, clearly label it as 'locally produced' and consider offering variations in sweetness and preservative-free options. Research the specific consumer demographics and shopping habits of your target market to refine marketing strategies.
- What are the limitations?
- The study was conducted in a specific region (Tennessee) and may not be generalizable to all US markets. Consumer preferences can also evolve over time.
- Is there evidence that hard cider affects design outcomes?
- Consumers are willing to pay almost half again as much for hard cider if it's labeled as local, with their purchasing decisions also influenced by how sweet they like their cider and whether it contains preservatives. Understanding consumer willingness to pay for local products is crucial for market entry and pricing s Source: International Journal of Wine Business Research (2021).
- Where does this locally produced research apply?
- Consumer beverage market, specifically hard apple cider in the USA. It sits within innovation & markets research on designdex.org.
Related research topics
hard cider design research · evidence on hard cider · does hard cider improve design outcomes · locally produced studies for designers · hard cider and locally produced findings · innovation & markets research evidence