The Loyalty Structure of Sparkling Wine Brands in Italy

Abstract

Abstract This article analyzes consumer loyalty in the Italian market for Prosecco sparkling wines. In particular, we examine the relationship among wine appellation, price, and consumer loyalty. To that effect, we run a Dirichlet model on Nielsen scan data to estimate brand performance measures and study purchase patterns in the sparkling wine market. We find that Prosecco wines benefit from high-consumer loyalty, and that this loyalty can be explained by both the appeal of the Prosecco appellation and its upper-tier price point. We conclude that promotion strategies with deep discounts, as they affect the appellation's image, might hurt consumer loyalty in the long run. (JEL Classifications: D12, L11, L66, M31)