Abstract
Dairy alternative beverage market in the United States has been growing over the past decade. Although almond milk and soymilk are the fastest growing categories, there exist numerous other products such as coconut milk, rice milk, cashew nut milk, hazelnut milk, etc. There are well-known national brands as well as not-so-well-known private label and store brands that compete among dairy alternative beverages. These firms compete strategically for market share by differentiating their products by brand, price, advertising, promotion, positioning and merchandising. Using market level weekly purchase data from 2015 Nielsen scanner panel, price cost margins and market power of different brands is estimated assuming the presence of pure strategy Bertrand-Nash equilibrium in prices. Demand parameters are estimated using attribute space hedonic metric approach within the Barten synthetic demand model. Hedonic variables with regards to product attributes such as calorie, fat, protein, calcium and other nutrients are used to estimate demand elasticities using qualitative factor distances within the hedonic matrix of parameters associated with attributes. Preliminary analysis revealed own-price demand elasticities of soymilk, almond milk, and coconut milk at -1.13, -0.5, and 0.46. These are used to calculate price cost margins under various industry structures (such as in Nevo, 2000).
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Disclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.