Abstract
The South African wine industry has recently launched the world’s first ‘no sulphite added’ wine made from indigenous Rooibos & Honeybush toasted wood chips. This wood chip contains antioxidant properties known to protect wine from oxidation. On the other hand, SO2 as a preservative, is often perceived by wine consumers as causing headaches and migraines. Differentiated wines based on their SO2 content may be a profitable marketing avenue for the struggling industry. We interviewed more than 600 wine consumers to investigate their perceptions of wine preservatives and preference for several wine attributes. Specifically, we use discrete choice experiments to elicit willingness to pay for the innovative alternative based on Rooibos & Honeybush wood chips. In addition to wine preservatives, we also examine consumers’ preferences for organic wine attributes and wine quality measured by a 100-point quality score and cost. Based on the results from the mixed logit model, we find that consumers are willing to pay an additional €3.53 (R56.48) per bottle of wine with natural Rooibos & Honeybush wood chips, while they are ready to pay €1.22 (R19.52) more for organic wine and €0.10 (R1.60) for each point on the quality score. Consumer preferences are not statistically different between red and white wine but differ considerably across consumers. In particular, those who believe SO2 in wine causes headaches are willing to pay at least three times more for replacing sulphur-based preservatives with a natural one. Marketing implications are offered for the wine industry.
Highlights
South Africa’s wines have been progressively internationally competitive, with a viable and positive trend since 1994
When we control for differences in preferences for consumers who believe that SO2 in wine causes headaches, we find willingness to pay for natural preservatives (Rooibos & Honeybush) as well as for wine quality is at least three-times larger than for consumers who do not believe so: €5.67 vs. €1.82 for rooibos, and €0.151 vs. €0.045 for the quality score in Table 4, whilst their WTP for organic wines does not statistically differ from the other: €1.53 vs. €0.93, with Wald=1.28 and p-value=.2572)
We find that females value organic wines more than males, Africans value Rooibos & Honeybush preservatives less than Caucasians, while the preferences of Caucasians do not differ from other races
Summary
South Africa’s wines have been progressively internationally competitive, with a viable and positive trend since 1994. The wine industry is the eighth in overall volume production globally and contributes approximately 4% to the world’s wine. It exports half of its produce, and its local wine per capita consumption is estimated at 7.73 litres [1]. The wine industry generates R54.96 billion annually, contributing 1.2% to South Africa’s GDP in 2019; R7.17 billion in taxes to the South African government; and income for. The wine industry plays an important role in South Africa’s labour market providing over 300,000 jobs. The wine industry is under serious threat
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Free) 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a call
