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Assessing the Demand for a Functional Food Product: Is There Cannibalization in the Orange Juice Category?

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  • Yuan, Yan
  • Capps, Oral, Jr.
  • Nayga, Rodolfo M., Jr.

Abstract

The demand for functional foods has increased notably in recent years due to growing consumer interest in diet and health issues. Currently, the food industry is introducing many types of new food products with functional attributes. Consequently, cannibalization is a critical issue for firms that offer multiple products within a certain product category. The identification and assessment of cannibalization are integral factors when making strategic decisions about new product introductions. Using scanner data from Information Resources, Inc. (IRI), pertaining to a particular functional food, namely a phytosterol-enriched product for orange juice, we find that no cannibalization effects exist with respect to its introduction. We also provide estimates of own-price and cross-price elasticities of the orange juice category using a synthetic demand system.

Suggested Citation

  • Yuan, Yan & Capps, Oral, Jr. & Nayga, Rodolfo M., Jr., 2009. "Assessing the Demand for a Functional Food Product: Is There Cannibalization in the Orange Juice Category?," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 38(2), pages 1-13, October.
    • Handle: RePEc:ags:arerjl:55558
    DOI: 10.22004/ag.econ.55558
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    1. Andreas Widenhorn & Klaus Salhofer, 2014. "Price Sensitivity Within and Across Retail Formats," Agribusiness, John Wiley & Sons, Ltd., vol. 30(2), pages 184-194, March.
    2. Senarath Dharmasena & Oral Capps, 2012. "Intended and unintended consequences of a proposed national tax on sugar‐sweetened beverages to combat the U.S. obesity problem," Health Economics, John Wiley & Sons, Ltd., vol. 21(6), pages 669-694, June.
    3. Widenhorn, Andreas & Salhofer, Klaus, 2014. "Using a Generalized Differenced Demand Model to Estimate Price and Expenditure Elasticities for Milk and Meat in Austria," German Journal of Agricultural Economics, Humboldt-Universitaet zu Berlin, Department for Agricultural Economics, vol. 63(02), pages 1-16, June.
    4. Alessandro Bonanno, 2016. "A Hedonic Valuation of Health and Nonhealth Attributes in the U.S. Yogurt Market," Agribusiness, John Wiley & Sons, Ltd., vol. 32(3), pages 299-313, July.
    5. Widenhorn, Andreas & Salhofer, Klaus, 2014. "Using a Generalized Differenced Demand Model to Estimate Price and Expenditure Elasticities for Milk and Meat in Austria," Journal of International Agricultural Trade and Development, Journal of International Agricultural Trade and Development, vol. 63(2).
    6. Dharmasena, Senarath & Capps, Oral, Jr., 2010. "On Taxing Sugar-Sweetened Beverages to Combat the Obesity Problem," 2010 Annual Meeting, July 25-27, 2010, Denver, Colorado 61322, Agricultural and Applied Economics Association.

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