Functional Foods as Differentiated Products

Alessandro Bonanno ()
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Alessandro Bonanno: University of Connecticut

No 113, Food Marketing Policy Center Research Reports from University of Connecticut, Department of Agricultural and Resource Economics, Charles J. Zwick Center for Food and Resource Policy

Abstract: In spite of growing consumers’ interest for functional foods and strong growth of their markets, limited knowledge of the demand for these products and their profitability is available. Adapting the LA/AIDS model by means of Pinkse, Slade, and Brett’s (2002) distance metric method, this article assesses the demand, substitution pattern, and profitability of conventional and functional alternatives inside the yogurt category in the Italian market. Results indicate that functional alternatives’ demand is often less elastic than conventional ones’, that brand loyalty plays a key role, and that 25% of the profitability of functional yogurts comes from the functional attribute itself.

Keywords: Functional Foods; Differentiated Products; Distance Metric; Yogurt (search for similar items in EconPapers)
JEL-codes: L15 L25 L66 (search for similar items in EconPapers)
Pages: 39 pages
Date: 2009-04
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Persistent link: https://EconPapers.repec.org/RePEc:zwi:fpcrep:113

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