Abstract
This paper analysed the impact of different attributes in Spanish quality wines on United States (US) demand behaviour. A hedonic price model was estimated in order to assess the values that US consumers give Spanish wines. The main results showed that the most influential factor on sale price was aging, which had a positive impact. US consumers valued the quality ratings provided by experts, especially in the upper price categories. The year of vintage and size of the winery were considered medium importance factors in decision-making, with the latest vintages and the smallest wineries receiving the highest ratings. Geographical origin (appellation) helped to explain consumer preferences. Although colour was the least important attribute in consumers’ purchase decisions, red wines were the most highly rated in this attribute.
Highlights
The wine industry faces new market opportunities created by factors such as increasing trade liberalization and globalization, emerging competition from new market players, and declining consumption in traditional wine-producing countries (Anderson et al, 2001; Wittwer et al, 2003)
A positive relationship was found between aging and wine’s prices in all price categories, except, importantly, the ultra premium category, where crianzas had more negative impact than joven wines
The first conclusion arising from the results of this research was that all the wine attributes considered in the hedonic function were valued by United States (US) consumers and had an impact on the sale price
Summary
The wine industry faces new market opportunities created by factors such as increasing trade liberalization and globalization, emerging competition from new market players, and declining consumption in traditional wine-producing countries (Anderson et al, 2001; Wittwer et al, 2003). Increasing export volumes and added value creation through differentiation strategies are the key ways to maintain profitability in the Spanish wine industry (Albisu & Zeballos, 2014; Del Rey, 2014a). Spain’s wine exports to the US have shown significant growth rates, but Spanish market share still remains below that of many competing countries. In this context, it was relevant to analyse the way in which the various attributes of Spanish quality wines influenced demand behaviour in the US. To be aware of what factors might influence the wine prices could help producers to take decisions about where to position their product on the market (Cousido Cores, 2017)
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