Project Number
UCT JS 17-01
Project title
Unlocking market value in South Africa’s old vine resources: perspectives on the challenge in exchange, competition and production.
Project leader
Steyn, J
Institution
University of Cape Town. Graduate School of Business
Team members
Botha, H
EXECUTIVE SUMMARY
Objectives and Rationale
Nascent categories like SA old vine wines (OV) raise the question of whether, to what extent, how and why value can be unlocked? We model producer price efficacy, consumer choice preferences and potential drivers behind such choices, ultimately informing purchase likelihood for such categories of wine.
Methods
1. OLS hedonic pricing model computed play of cue-variables for SA old vine wines.
2. PLS-SEM modelled significance and strength of relationship between consumer tendencies, resonance, quest and purchase probability for OV wines.
3. Explicit direct and indirect (stated and discrete conjoint), and implicit (neuro-psychological) effects on OV attribute choice.
Key Results
1. SA producers add a significant premium to OV wines according to vineyard age.
2. Consumers are more likely to buy OV wines when resonant (e.g. OV are quality), intensified by the mediation of quest (e.g. familiarity) and conforming to buying tendencies (e.g. scarcity).
3. Subconscious and explicit responses to OV cues are generally positive and correspond.
Key Conclusion of Discussion
Findings validate the worth of SA OV wines from a producer and consumer perspective.
Take Home message for Industry
These studies demonstrate that OV attributes are markers of quality, status and value. Worthy exploring longitudinal (over time), parent brand (SA country brand), upstream (production market) and global value chain effects.