Higher prices imply better quality for consumers who drink Drink Local
Don’t worry that local and regional wine tends to cost more than comparable national brands, which is something that has been hurting Drink Local’s growth. That’s because a 2019 study has found that consumers are happy to pay more for local wine, beer, and the like.
“We have not studied whether local wine and beer is now on a par with local food in terms of consumer acceptance,” says Ashok Lalwani, PhD, one of the report’s co-authors and an associate professor of marketing at Indiana University’s Kelley School of Business. “But, based on our results, I would speculate that consumers would be more likely to infer higher quality from higher priced wine and beer that is locally produced, but not as much for wine and beer that is positioned globally or not locally produced.”
This is huge news for Drink Local. First, it has always lagged behind local food in acceptance, the idea that it’s worth buying just because it’s local. Second, that consumers perceive a quality difference between local wine and Big Wine may be even more important, since Drink Local has been fighting the quality battle for as long as it has been around.
In fact, says Lalwani, the study results hint that consumers are less likely to associate price with quality for national brands, and are more likely to buy cheaper products since they all seem the same regardless of price. But the reverse seems to be true for local wine; that is, consumers equate higher price with better quality.
Again, an amazing development given all that Drink Local has had to overcome in the past couple of decades. It’s also not clear what’s driving this change in attitude. Lalwani says the study didn’t look at age or other demographics, but my guess is that the explanation lies in younger consumers and their distrust of multi-national brands and their preference for local.
Finally, the study quotes several multi-national marketing executives, none in the alcohol business, who sort of see this local thing, but are baffled by it: The “executives considered local or global communities in their pricing decisions, [but] none knew when such strategies were effective or why.”
Who knew those of us who believe in Drink Local knew more than lots of people with MBAs?
Photo courtesy of skeeze via Pixabay using a Creative Commons license