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Organic labelling, private label, and U.S. household demand for fluid milk

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  • Bo Chen
  • Sayed Saghaian
  • Yuqing Zheng

Abstract

The U.S. fluid milk market has been experiencing two trends in the recent decade: the fast growth of private label milk and organic milk. Using the data from Nielsen Homescan Panel, we estimate a censored demand system to study the demand relations among types of milk differentiated by brand types and organic status. We find that sociodemographic factors still play important roles in household choice of milk types, and fluid milk, as a whole, is an inferior good. Moreover, as income increases, households are more likely to shift from buying conventional milk to organic milk and from private label conventional milk to branded conventional milk, as indicated by the asymmetric cross price elasticities. Corresponding implications for milk producers and marketers are discussed.

Suggested Citation

  • Bo Chen & Sayed Saghaian & Yuqing Zheng, 2018. "Organic labelling, private label, and U.S. household demand for fluid milk," Applied Economics, Taylor & Francis Journals, vol. 50(28), pages 3039-3050, June.
    • Handle: RePEc:taf:applec:v:50:y:2018:i:28:p:3039-3050
    DOI: 10.1080/00036846.2017.1414936
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    Cited by:

    1. Dobkowitz, Sonja, 2022. "Redistribution, Demand, and Sustainable Production," VfS Annual Conference 2021 (Virtual Conference): Climate Economics 242417, Verein für Socialpolitik / German Economic Association, revised 2022.
    2. Lindström, Hanna, 2021. "The Swedish consumer market for organic and conventional milk: A demand system analysis," HFI Working Papers 21, Institute of Retail Economics (Handelns Forskningsinstitut).
    3. Rezgar Mohammed & Olga Murova, 2019. "Examining Demand Elasticities in the U.S. Differentiated Yogurt Market," Applied Economics and Finance, Redfame publishing, vol. 6(6), pages 69-79, November.
    4. Ghazaryan, Armen & Bonanno, Alessandro & Carlson, Andrea, 2023. "I Say Milk, You Say Mylk. Demand Separability in a Broadened Milk Category," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 48(2), May.
    5. Syed Badruddoza & Andrea C. Carlson & Jill J. McCluskey, 2022. "Long‐term dynamics of US organic milk, eggs, and yogurt premiums," Agribusiness, John Wiley & Sons, Ltd., vol. 38(1), pages 45-72, January.
    6. DeLong, Karen L. & Jensen, Kimberly L. & Upendram, Sreedhar & Eckelkamp, Elizabeth, . "Consumer Preferences for Tennessee Milk," Journal of Food Distribution Research, Food Distribution Research Society, vol. 51(2).
    7. GwanSeon Kim & Jun Ho Seok & Tyler B. Mark, 2018. "New Market Opportunities and Consumer Heterogeneity in the U.S. Organic Food Market," Sustainability, MDPI, vol. 10(9), pages 1-17, September.
    8. Jiangyuan Hou & Mingyue Du & Qingjie Zhou, 2023. "What People Talk About Multi-Channel Purchasing Behavior and What They Intend to do: Related Perspective From ESG Evaluation System," SAGE Open, , vol. 13(4), pages 21582440231, October.
    9. Abate, Gashaw T. & Bernard, Tanguy & de Janvry, Alain & Sadoulet, Elisabeth & Trachtman, Carly, 2021. "Introducing quality certification in staple food markets in Sub-Saharan Africa: Four conditions for successful implementation," Food Policy, Elsevier, vol. 105(C).
    10. Hanna Lindström, 2022. "The Swedish consumer market for organic and conventional milk: A demand system analysis," Agribusiness, John Wiley & Sons, Ltd., vol. 38(3), pages 505-532, July.
    11. Yu, Luqing & Gao, Zhifeng, 2020. "Better image for better price: how store image affects consumer’s willingness to pay for national brand in different stores," 2020 Annual Meeting, July 26-28, Kansas City, Missouri 304625, Agricultural and Applied Economics Association.
    12. Lindström, Hanna, 2021. "The Swedish consumer market for organic and conventional milk: A demand system analysis," Umeå Economic Studies 998, Umeå University, Department of Economics.

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