Paolo Dinis, Richard Sagala Kedge, Larry Lockshin UNISA Importance of eco-logo and closure types on consumer expectations, price perception and willingness to purchase wines in Canada AAWE,Conference Bordeaux 2016 Richard Sagala, presenter In Vino Veritas Wine School, Montréal, Canada

Introduction Increase in eco-consciousness worldwide Consumers are integrating eco values in their lifestyle choices (Smith and Marsen, 2004) Producers, retailers and others use sustainability to support their brand and develop products offers to generate competitive advantage (Straughan and Roberts, 1999)

Introduction Wineries motivation: personal and satisfaction, regulation, product quality, market demand (Gabzdylova et al., 2009) Gatekeepers are the main drivers : improve market power, increase efficiency of logistic s and enhance their eco-friendly image Availability increase consumer awareness and therefore consumer demand for eco-friendly food & wine (Remaud et al., 2010)

Introduction Environmental friendly products are credence goods (Crespi and Marett, 2005) Packaging acts as eco-labeling, providing information about the eco credentials of the product (Leire and Thidell, 2005) Several packaging attributes need to be combined for effective eco-label Leire (2004) Can closure enhance or disrupt the eco-friendly brand image?

Aim To understand the relative importance of the different extrinsic wine attributes such as closures types and eco-label logos in price and purchase intent of bottled wines in two Canadian provinces (Québec & Ontario)

Self-administered internet based questionnaire assessed Methodology Self-administered internet based questionnaire assessed Characteristics Québec 50,1% (n=299) Ontario 49,9% (n=298) Total respondents 100% (n=597) Gender female 54% 51% 52% (n=312) male 46% 49% 48% (n=285) Age L.A*- 24 9% 8% 9% (n=51) 25 - 40 32% 37% 34% (n=204) 41 - 54 34% 30% 32% (n=191) 55 - 64 16% 13% 15% (n=87) > 64 12% 11% (n=64) Wine consumption More than once a week 44% 23% 34% (n=202) Once a week 19% 24% (n=146) Once or twice per month 24% 28% 26% (n=155) Less than once per month 16% (n=94) The data for this report was collected in third week of May 2011 Data was gathered via web-panel provider (GMI - Global Market insight Inc., Paris, France) Response rate of around 40% Respondents were required to have purchased wine in the last three months and be above the legal drinking age (18 and 19 years old in Québec and Ontario, The survey is representative of Canada regular wine drinkers in terms of age, gender and state

Methodology Traditional Conjoint Analysis (CVA) Scenario: Purchase in retail of an eco-labeled wine to drink by themselves or with other people at home

Key findings Importance of the closures and eco-label logos in likelihood to buy (%) bottled wines in two Canadian provinces Claims Québec (n=299) Ontario (n=298) Natural cork Synthetic Screw cap Natural cork No claim 69 (20)a 61 (22)bc 59 (22)c 64 (21)ab 58 (20)c Organic 63 (22)a 59 (23)b 60 (22)ab 61 (22)a 57 (21)b 59 (21)b Biodynamic 65 (21)a 59 (20)b 63 (21)a 56 (21)b 58 (21)b 100% E. friendly 66 (21)a 65 (23)ab 61 (21)bc 63 (22)b 62 (21)bc 59 (21)c Values represent mean values and standard deviations (within parenthesis) obtained from responses based upon the likelihood of buying the wine bottle on a scale from 1= no chance, to 5 = about a 50% chance to 10 = 100% likely to buy Values with different subscript letter in each row are significant different at 95% confidence level Similarly in both provinces, natural cork increase likelihood to buy vs alternatives closure, regardless of the eco-label logo

Overall likelihood of buying = 61% Key findings Importance of the closures and eco-label logos in likelihood to buy (%) bottled wines in two Canadian provinces Overall likelihood of buying = 61% 100% Eco-friendly claim increase respondents’ willingness to buy, while organic and biodynamic generated a negative effect Corks boosts 4.6% on respondents’ willingness to buy, while screw caps and synthetic closures generated a negative effect of 2%

Key findings Importance of the closures and eco-label logos in the price (CAD$) of bottled wines in two Canadian provinces Claims Québec (n=299) Ontario (n=298) Natural cork Synthetic Screw cap Natural cork No claim 16.1 (5.3)a 15.3 (6.9)ab 14.3 (5.5)b 15.8 (7.9)a 15.2 (9.1)ab 14.6 (8.4)b Organic 15.9 (6.4)ab 15.2 (5.8)b 14.9 (6.4)b 16.7 (11)a 15.5 (9.3)ab 15.6 (10)ab Biodynamic 16.2 (7.6)a 15.1 (5.7)b 15.0 (6.1)b 16.2 (9.1)a 15.3 (9.2)ab 15.7 (10)ab 100% E. friendly 16.0 (5.9)ab 16.1 (6.3)ab 14.8 (5.8)b 16.5 (9.8)a 15.5 (8.4)ab 15.2 (8.9)ab P value? Values represent mean prices values and respective standard deviations (within parenthesis) obtained from responses. Values with different subscript letter in each row are significant different at 95% confidence level. Ontario and Québec wine drinkers are willing to spend more in wines sealed with natural cork closure, regardless of the eco-label logo

Overall average value= CAD$15.53 Key findings Importance of the closures and eco-label logos in the price (CAD$) of bottled wines in two Canadian provinces Overall average value= CAD$15.53 Respondents are willing to pay more for 100% Eco-friendly; while organic and biodynamic are quite neutral Natural corks give a pricing advantage of CAD$1.69 and CAN$1.39 per bottle compared with screw caps and synthetic closures

Key findings Importance of the closures and eco-label logos in the purchase intent (%) of bottled wines in two Canadian provinces Claims Québec (n=299) Ontario (n=298) Natural cork Synthetic Screw cap Natural cork No claim 85% 78% 88% 81% Organic 72% 75% 73% 76% Biodynamic 79% 80% 74% 100% E. friendly 77% 82% 84% Values represent the percentages of respondents that stated that they would you realistically purchase the each wine bottle with different environmental claim and type of closures for the price they wrote. In general, bottles sealed with natural corks were most chosen within each province than those sealed with synthetic closures and screw caps

Key findings Importance of the closures and eco-label logos in the price and purchase intent (%) of bottled wines in two Canadian provinces Overall purchase intent = 78% Overall average value= CAD$15.53

Conclusions Canadians did not display a greater interest in bottles carrying eco- friendly claims even if they have marginally valued some of it; Claims which includes words such as “eco-environmental friendly” seems to be easier to understand and are more meaningful and appealing than “organic” or “biodynamic”; Consumers were most likely to buy, and would pay more for wines sealed with natural corks, compared to the same bottles sealed with synthetic or screw cap closures; Closures and eco-claims were not perceived having a combined utility to respondents’. (Closures do not enhance or disrupt the brand image)

Thank You for your attention! AAWE,Conference, Bordeaux 2016 Richard Sagala In Vino Veritas Wine School, Montréal, Canada