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The Competition of Beverage Products in Current Market: A Composite Demand Analysis

  • Yan Heng, Lisa A. House and Hyeyoung Kim
Abstract

The beverage sector plays an important role in consumers' daily diet. Recent declines in fruit beverage and soft drink consumption may be a reflection of changing consumers' lifestyles and perceptions. This study uses recent scanner data to develop a demand analysis to examine the competition of various beverages. To obtain reliable demand and elasticity estimates, we test for valid aggregations using the generalized composite commodity theorem. Results suggest that while consumers substitute refrigerated juice with low calorie drinks, a larger proportion of consumers substitute regular soft drinks with fruit drinks.

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Copyright
This is an Open Access article, distributed under the terms of the Creative Commons Attribution licence (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted re-use, distribution, and reproduction in any medium, provided the original work is properly cited.
Corresponding author
Correspondence: Yan Heng ■ Food and Resource Economics Department, University of FloridaP.O. Box 110240Gainesville, Florida, 32611, USA ■ phone: 352.294.7686 ■ email: yheng@ufl.edu
Footnotes
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We would like to thank Dr. Lee Schulz in the Department of Economics at Iowa State University for sharing his expertise and two anonymous referees for their suggestions on earlier versions of the paper. Support for this research was provided by the Florida Department of Citrus. All mistakes are the responsibility of the authors.

The views expressed are the authors’ and do not necessarily represent the policies or views of any sponsoring agencies.

Footnotes
References
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Agricultural and Resource Economics Review
  • ISSN: 1068-2805
  • EISSN: 2372-2614
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