AAWE, Economics Dept, New York University, 19 W 4th St, 6Fl., New York NY 10012aawe@wine-economics.org

AAWE Working Paper No. 200 – Economics

Importance of eco-logo and closure type on consumer expectations, price perception and willingness to purchase wines in Canada

Paulo Lopes, Richard Sagala & Larry Lockshin

Abstract

Product differentiation, competitive advantage and increased sales could be achieved by wineries through the adoption of environmentally focused practices (Nowak and Washburn, 2002). However, a competitive advantage can only be gained in the marketplace if firms are able to communicate to consumers’ about their environmental focus (Bisson et al., 2002). Environmentally sustainable products are credence goods; consumers cannot ascertain their environmental qualities during purchase or use (Crespi and Marett, 2005). Consumers are not present during the production process of the product and therefore cannot assess environmental friendliness of production. Therefore, extrinsic cues such as packaging has an important function of eco-labeling, being used to reduce information asymmetry between the producer of sustainable products and consumers by providing credible information related to the environmental credentials of the product (Leire and Thidell, 2005). Eco-label logos and claims are the most used extrinsic attributes to signal the environmental attributes of wines to consumers. While organic and biodynamic are the most successful eco-claim at this stage, it is by no means the only sustainable claim. Environmental responsible, made with sustainable practices, 100% eco-friendly, carbon neutral, greener planet are other environmental sustainable claims that can be found on wine bottle labels (Zucca et al., 2009). Because the eco- label/claims are the first line of communication to entice the consumer, it seems therefore extremely important that other extrinsic packaging attributes can also meet the “information” that environmental friendly claims try to convey.

An important attribute of wine packaging is type of closure that by its sealing properties can directly influence the intrinsic attributes of wines. Moreover, closures are also an important extrinsic packaging attribute. Various types of closures such as cork stoppers, screw caps and synthetic closures can be considered by consumers to be a direct reflection of the wine quality and in some extent influence their purchase decision. (Chaney, 2000; Reidick, 2003; Toubia et al., 2005; Barber and Almanza, 2006; Barber et al., 2008; Marin et al., 2007a; Barber et al., 2009b). Although ample research has been conducted on the importance of wine bottle closures in quality perception and purchase decisions of consumers in different countries, however, little is known about how type of closure affects consumer expectations, price and willingness to purchase eco-labeled wines.

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