A Hedonic Valuation of Health and Nonhealth Attributes in the U.S. Yogurt Market

ABSTRACT The U.S. yogurt category encompasses a multitude of subcategories including products carrying health‐related attributes, some products targeting specific segments of the population (i.e., yogurt for kids), and others of recent introduction (e.g., Greek‐style yogurts). Given the numerous attributes that can be present in a product, characterizing those leading to a higher premium can help manufacturers to engage in profitable product formulation. This paper investigates the role played by health and nonhealth‐related attributes on yogurt prices in the United States, both at the national level and in different geographic markets, by means of a large scanner database of yogurt sales and a hedonic price model. The findings indicate that health‐related attributes more commonly associated with yogurts such as the presence of probiotics, specific health claims, and other credence attributes (i.e., organic and “natural”) are valued positively while others, which may lead to lower product acceptance (e.g., fibers, Omega‐3) are not. Nonhealth‐related features, such as “for kids” and Greek‐style, show a positive market value, thus helping in product differentiation. The magnitude of the implicit price of most product attributes is found to vary across markets, hinting that food manufacturers should consider market‐specific product formulation strategies to achieve product differentiation more effectively.