Abstract
Purpose The objective of the paper is to investigate the impact of habits and consumption behavior on the willingness to pay (WTP) for cider by surveying young consumers. Method The analysis is based on a questionnaire distributed to a group of 433 French business students from December 2017 to January 2018. Specifically, the questionnaire is designed to test whether young consumers would pay a premium price or not for quality ciders with respect to a traditional sweet cider with similar characteristics. We are modelling the premium that consumers are willing to pay for an organic cider, a farmer cider and rosé cider. To accommodate the feature of a significant proportion of zero or negative premiums in dependent variables, the Heckman two-stage estimation procedure is performed. Results Results show that the young generation consider cider as a cheap, festive and non-organic beverage and is willing to pay a premium for quality ciders like specifically rosé and farmer ciders. Conclusion The results from this research have useful implications not only for the cider market but also in the understanding of the characteristics of competitive beverages that young consumers may prefer and value.
Highlights
Cider production is popular around the world in temperate regions where apple trees grow
Out of 433 respondents in our sample, 54 participants (13 percent) are not willing to pay a premium for a quality cider compared to the traditional sweet cider
We find that price habit significantly predicts WTP and cider brand familiarity, the effect of drinking experience on the willingness to pay a positive premium is not statistically significant
Summary
Cider production is popular around the world in temperate regions where apple trees grow. Evidence along the banks of the Nile River can be found dating back to about 1300 B.C., but the historical development of cider production is less clear (Watson, 2003). The bulk of production of cider occurs in Europe where the term cider refers strictly to fermented products. Within Europe, the main cider-producing countries are England, Spain, France, Germany, and Ireland, while smaller amounts are produced in Finland, Poland, Austria, and Switzerland (AICV, 2018). Diversified and high-quality products and innovations such as cider rosé, ice cider, and flavored ciders may explain this renewed interest in cider by young consumers (Cloutier & Détolle, 2017; Fabien-Ouellet & Conner, 2018). Generation Z consumers (born after 1996) drink less alcohol in general according to a 2018 survey by Berenberg Research (Pepper, 2018) and focus on lower alcoholic beverages, new ready-to-drink, or pre-mixed beverages (Craigs et al, 2011; Foster et al, 2003). 1
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