U.S. Demand for Dairy Alternative Beverages: Attribute Space Distance and Hedonic Matric Approaches

Consumption of dairy alternative beverages in the United States has been growing in the light of decreasing consumption of dairy milk. Although almond milk and soymilk are the fastest growing categories in the U.S. dairy alternative marketplace, there exist numerous other products such as coconut milk, rice milk, cashew nut milk, and hazelnut milk. These plant-based products claim to have more protein and calcium, and less in fat and calories compared to conventional dairy milk, hence perceived growth in consumer preference. Using market level weekly purchase data from 2015 Nielsen scanner panel and attribute space distance and hedonic matric approaches within Barten synthetic model, own-price, cross-price and expenditure elasticities for aforementioned beverage products were estimated. Distance and hedonic variables with regards to product attributes such as calorie, fat, protein, calcium and other nutrients (vitamins and minerals such as iron, vitamin B) are used to estimate, first an n-dimensional distance (hedonic) space based on above qualitative information available to consumers and then this information is allocated to Barten synthetic model to generate demand elasticities using qualitative factor distances. Preliminary analysis revealed following own-price demand elasticities: Soymilk -1.13, almond milk -0.5, and coconut milk -0.46.

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G11; G12

 Record created 2017-04-01, last modified 2019-08-30

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