Abstract
AbstractThe American Viticultural Area (AVA) allows designated wine regions to be created, marketed, and protected. But many of the now 248 AVAs may be meaningless to consumers. Are AVAs thus meritless? Can AVAs affect consumers despite low recognition? A choice experiment examines three appellations that are applicable to the same wine: New Jersey, USA; Pilesgrove, New Jersey; and Outer Coastal Plain (OCP)—a New Jersey AVA. The results show that consumers prefer OCP wines over the former alternatives, affirming the marketing potential of AVAs that omit state names. Nevertheless, AVA may have exploited consumers’ lack of information.
Highlights
The number of wineries and vineyards in the United States has rapidly expanded
There are 248 American Viticultural Area (AVA) nationwide, noteworthy given that the first prestigious U.S wine region, Napa, was relatively unremarkable until the 1960s (Alcohol and Tobacco Tax and Trade Bureau, 2020a; Taber, 2006)
With the goal to highlight the value created by a not-well-known AVA, this study investigates the effect of a New Jersey AVA on consumer preference
Summary
The number of wineries and vineyards in the United States has rapidly expanded. There were 9,654 wineries in 2018, up from about 1,000 in 2001; about 25,000 farms are engaging in viticulture (Bureau of Labor Statistics, 2018; Statista, 2019). Vintners and winemakers in these lessprestigious regions have used the American Viticultural Area (AVA) to establish designated wine regions (Chace and Smith, 2013). There are 248 AVAs nationwide, noteworthy given that the first prestigious U.S wine region, Napa, was relatively unremarkable until the 1960s (Alcohol and Tobacco Tax and Trade Bureau, 2020a; Taber, 2006). Among the established AVAs are Fennville, Lancaster Valley, Bell Mountain, and High Valley—a dizzying array of names that hold little hints about their true geographical origins (Alcohol and Tobacco Tax and Trade Bureau, 2020a). Nine of the most expensive wines, averaging from $4,975 to $19,327, are from Côte de Nuits—a wine region in France; all American wines above $500 per bottle originate from the Napa Valley (wine-searcher.com, 2018). Many studies have observed that wines’ regions of origin generate price premium. The evidence that the place of origin is an important consideration in wine purchases is convincing
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