Some like it healthy: demand for functional products in the Italian yogurt market

Despite the significant interest shown by academics as to investigating the market of functional foods, little empirical research has used market data to infer on the characteristics of functional foods’ consumers via demand analysis. Using a discrete choice (nested-logit) model and scanner data of yogurt purchases in the Italian market, this paper analyzes the demand for both conventional and functional yogurts assessing also the role of health-related demographics as shifters. The empirical results show that, in the category analyzed, while higher prices are still a deterrent for the success of some functional products, drinkable functional yogurts appear successfully differentiated, benefitting from a relatively low own-price elasticity of demand. The results suggest also that health-related consumers’ characteristics play an important role in shifting the demand for yogurts (both conventional and functional), indicating that, consistently with previous findings, consumers aiming to improve (or maintain) their health status are more inclined to buy functional products than conventional ones.