Short answer

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.

Field: Innovation & Markets
Source: International Journal of Wine Business Research (2021)
Method: Quantitative analysis of survey data using probit and multivariate probit models.
Sample: 875 participants
Evidence: Strong effect

Consumers are willing to pay a significant premium for hard cider identified as 'locally produced,' indicating a strong market opportunity for regional brands. This innovation & markets research insight is drawn from a 2021 study published in International Journal of Wine Business Research. Using Quantitative analysis of survey data using probit and multivariate probit models. with 875 participants, researchers explored how this design variable affects real-world outcomes. The key 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.

Study

Innovation & MarketsHigh ImpactStrong effect

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

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

AimTo quantify the premium consumers are willing to pay for locally produced hard apple cider and identify the factors influencing this premium and attribute importance.

MethodQuantitative analysis of survey data using probit and multivariate probit models.

ProcedureA survey was administered to consumers to gather data on their preferences and willingness to pay for a hypothetical local hard apple cider, considering various attributes and demographic factors. Statistical models were then applied to analyze the data and derive the premium and influencing factors.

Sample875 participants

ContextConsumer beverage market, specifically hard apple cider in the USA.

Variables

IV["Product origin (local vs. non-local)","Sweetness/dryness","Sparkling/still","Presence of preservatives","Consumer preference for local foods","Urbanization level","Weekly purchases of other alcoholic beverages","Shopping venue"]

DV["Willingness to pay (premium amount)","Importance of product attributes"]

CV["Reference product price","Specific type of alcoholic beverage (hard apple cider)","Geographic location of survey (Tennessee)"]

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

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 source

Questions 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.