Burgundy School of Business Tell me a story about terroir: Analysing the appeal of different terroir stimuli for consumers Steve CHARTERS Lara AGNOLI Valériane TAVILLA Burgundy School of Business Dijon, France 11th Conference of the American Association of Wine Economists Padova, 28th June to 2nd July 2017

Terroir and the market A terroir product is a product with a story to tell ‘Terroir is used across the world as a justification for and endorsement of the quality of wine’ (Charters, 2010, p. 3) Consumers  consider terroir products as a kind of ‘refuge’ products (Guy, 2011; Batat, 2013) Food Producers  adopt the "terroir strategy" to be competitive and sell at a premium price (Elaydi and McLaughlin, 2012) Different dimensions to interpret the concept of ‘terroir product’ (Aurier et al., 2005; Spielmann and Charters, 2013)

Gaps in literature Little research is devoted to analyse terroir from a consumer perspective Few studies analyse the role of terroir in products from outside Europe Few studies are focused on terroir products other than wine Even when terroir is analysed in products different from wine, single-product approach to the topic

Objectives Analyse the appeal of different stimuli for the consumer of different terroir products coming from the New and the Old World how consumer perceptions toward terroir changes from product to product consumer preferences for the different label attesting the legal recognition of terroir different perception of terroir linked to different country of origin the cultural differences in the perception of terroir We opted for a choice experiment to explore these.

Surveyed Population and Products Surveyed Terroir Products Method Surveyed Population and Products Surveyed Terroir Products Surveyed Markets UK France Italy Cheese Stilton x Roquefort Gorgonzola Ham Carmarthen Ham Jambon de Bayonne Prosciutto Crudo di Norcia Wine Californian Cabernet Sauvignon

The hypothetical choice Method The hypothetical choice "You are going to give a dinner party for some friends who are visiting from the United States. You want to show them some of the great food that Europe has to offer, including cheese and ham. You also want to give them the chance to have some wine from their own country – so that they won’t feel too homesick."

Discrete Choice Experiment Method Discrete Choice Experiment Attributes Levels Origin 1. Country 2. Region 3. Village Collective brand 1. Shown 0. Not shown Terroir Story 1. Territory 2. Family 3. Production process 4. Climat Private label Price €/£

A pilot study in France

The experimental design 3 efficient Dz-designs 12 choice task 3 blocks  4 choice tasks for cheese, ham and wine

Data collection Convenience sample Online recruitment 209 respondents 63.6% females 71.8% is 25 years-old or less

Attribute importance: part-worth utilities From slide 13: - The PDO is more important than PGI and AVA in driving choice and provide consumers with utility The collective brand is more important than the origin when the product is national There is a kind of increase in importance of terroir story and origin when the product comes from outside your country and even more outside your continent Terroir sotory is more improtant for wine, even if the wien comes from a coutnry that is not associated to terroir byu tradition The presence or not of a private label is more important when the product is not national - but it is a negative cue for the European PGI ham!

Level importance: MNL Model   National Cheese European ham US wine Coeff. SE Origin Country (reference) Region 0.100 0.121 0.150 0.169 0.437 *** 0.132 Village 0.697 0.348 -0.331 0.209 0.223 0.357 Private label Shown 0.028 0.213 -0.265 0.114 0.127 0.200 Collective brand 0.889 0.199 0.333 ** 0.193 0.224 0.188 Terroir Story Territory (reference) Family 0.116 0.153 0.259 0.232 0.426 0.164 Production process 0.168 0.172 0.654 0.276 -0.249 0.192 Climat 0.575 0.325 -0.109 0.226 0.126 0.307 Price -0.793 0.381 -0.008 0.112 0.020 0.027 COO UK (reference) Italy - 1.298 0.120 No-choice -2.550 0.800 -0.597 -0.028 0.267 Goodness of fit Number of cases 209 Number of replications 836 Number of parameters (Npar) 9 10 Log-likelihood (LL) -453.7619 -610.6432 -818.6998 Rho square 13.3 38.1 11.7 ***p≤0.01; **p≤0.05 For the domestic product Village is the most important origin cue. For PGI ham it is COO. For American wine it is Region. Terroir story also varies according to the product.

Conclusion The role of terroir dimensions is pivotal in driving food choice They are collectively more important than price in driving choice! The terroir dimension connected to the origin of the product is the most important terroir stimuli when the product is not national The legal representation of terroir, expressed by the denomination of origin, is focal for a national product Different terroir stories drive consumer choices of different food products

Thank you for the attention! lara.agnoli@bsb-education.com