CONSUMER PREFERENCES FOR CSR WINES:

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1 CONSUMER PREFERENCES FOR CSR WINES: AN EXPLORATORY ANALYSIS IN ITALY AND GERMANY Marco LERRO a Jeanette KLINK-LEHMANN b Ching-Hua YEH b Riccardo VECCHIO c Monika HARTMANN b Luigi CEMBALO c a Dept. of Law, Economics, Management and Quantitative Methods, University of Sannio, IT b Institute for Food and Resource Economics, University of Bonn, DE c Dept. of Agricultural Sciences, AgEcon and Policy Group, University of Naples Federico II, IT Prof. Luigi Cembalo (Ph.D)

2 Background of the study Problem area Pressures by consumers due to their awareness and interest in environmental and social impact of productions (Corbo et al., 2014; Ginon et al., 2014). The number of labeling claims on new food products doubled from 2009 to Most of the growth comes from claims: low or no allergens; gluten free; Kosher; GMO free; no additives or preservatives; organic logos promoting ethical or environmental friendly packaging (USDA 2017)

3 Background of the study Problem area Increasing number of standards CSR like (some examples)

Background of the study Problem area Consumer associations with credence characteristics generate sensory expectations due to external cues, affecting perception and

4 Background of the study Problem area Consumer associations with credence characteristics generate sensory expectations due to external cues, affecting perception and hedonic ratings Effect of credence on consumers experienced sensory quality of food Source: F. Fernqvist, L. Ekelund (2014). Food Quality and Preference. 32,

5 Aims Research questions The current study addressed the following research questions 1 Does the relationship between credence attributes and consumers perceived quality hold for wine (when credence attributes are not linked to methods of production)? 2 Do consumers express preferences, expressed in WTP (willingness to pay), for credence attributes not linked to methods of production? 3 Are there any interaction between WTP and hedonic liking?

Methodology Empirical strategy - Data collection Non hypothetical, incentive compatible artefactual field experiment Sample: 200 regular wine consumers (at least once a month) 100 in Italy and 100 in

6 Methodology Empirical strategy - Data collection Non hypothetical, incentive compatible artefactual field experiment Sample: 200 regular wine consumers (at least once a month) 100 in Italy and 100 in Germany (both living in wine producing area) Product: Aglianico Campania PGI ceteris paribus: vintage 2016, alcohol content 13%, bottle shape, production area Stimuli: 4 different CSR certifications Carbon footprint, Vignaioli Indipendenti, VIVA sustainable wine, Organic, and 1 conventional wine

7 Methodology Empirical strategy - Multiple Price List (MPL) One product and one price randomly selected; participants committed to buy

8 Methodology Experimental procedure Within design - endowment 10 e 10 sessions with 10 participants each (per country)

9 Results WTP and HL Round 1 (blind testing) No statistical significant differences in WTP among wines, neither for Italy nor for Germany No statistical significant differences in HL among wines, neither for Italy nor for Germany It confirms the substantial equivalence of selected wines detected by experts (panelists)

10 Results Premium prices (Delta WTP) - Round 2 (information)

11 Results WTP and HL - 1st (blind) and 3rd (taste+info) rounds

12 Results Delta WTP and HL - 1st (blind) vs 3rd (taste+info) rnds

13 Results Trends - from 1st to 3rd round

14 Results Model results Obs no. 712; F(7,704) = 3.60, Prob>F : 0.000

15 Concluding remarks Take home messages Current study results evidence a significant Halo Effect: wine is, overall, deemed by consumers as several other food products Credence attributes on wine have been mostly linked to methods of production. The take home (new) message is that it seems there is room to point on (credence) attributes not related to the process itself It was also detected the presence of a distinctive hierarchy in consumers mind about the different certifications. A premium price for social and ethical products suggests a payoff for CSR initiatives Study limitations Several/few/many/some/... None related to internal validity!

Klink-Lehmann, C.H. Yeh, R. Vecchio, M. Hartmann, L.

16 Questions Questions and Comments CONSUMER PREFERENCES FOR CSR WINES: AN EXPLORATORY ANALYSIS IN ITALY AND GERMANY M. Lerro, J. Klink-Lehmann, C.H. Yeh, R. Vecchio, M. Hartmann, L. Cembalo Questions, suggestions and comments are very welcome

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