Consumer willingness to pay for sustainability attributes in beer: A choice experiment using eco‐labels

Aaron J. Staples, Carson J. Reeling, Nicole J. Olynk Widmar and Jayson Lusk

Agribusiness, 2020, vol. 36, issue 4, 591-612

Abstract: Commercial and regional brewers are increasingly investing in environmental sustainability equipment that reduces input use, operating costs, and environmental impacts. These technologies often require prohibitively high upfront costs. One potential solution for these brewers is to market their product as sustainable and charge a premium to offset some of the costs. We undertake a stated preference choice experiment targeting a nationally representative sample of beer buyers and elicit preferences for multiple attributes related to environmental sustainability in beer. We find that, on average, beer buyers are willing to pay $0.70/six‐pack for beer produced using water and wastewater reduction technologies, $0.85 for carbon reduction practices, and $0.98 for landfill diversion practices, though water sustainability practices appeal to a largest share of beer buyers. We also find that preferences for sustainability attributes are widely distributed among beer drinkers, largely irrespective of sociodemographic characteristics. The positive price premiums across sustainability attributes suggest beer buyers value sustainable brewing, and brewers could attract new consumers by simultaneously communicating their commitment to sustainability and differentiating their product [EconLit Citations: D12, L66, M31].

Date: 2020
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https://doi.org/10.1002/agr.21655

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Persistent link: https://EconPapers.repec.org/RePEc:wly:agribz:v:36:y:2020:i:4:p:591-612

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