Hedonic pricing model for ultra-high-temperature milk market in Juiz de Fora – Brazil

Abstract

The dairy industry stands as one of the most significant sectors within the Brazilian food industry. Ultra-high-temperature (UHT) milk has notably expanded its market presence in terms of fluid milk sales. Moreover, UHT milk is available in various options, including varying fat content, added nutrients, and diverse packaging. This study aims to estimate a hedonic price model for UHT milk in the Juiz de Fora market, Brazil, with a focus on discerning premiums associated with packaging characteristics, the presence of added nutrients, fat content, supermarket chains, and location. Data for the year 2016, collected from all supermarkets in the municipality, were used. The most robust model revealed a price premium over the baseline product, with increments of +0.44 R$/liter (+12.31%) for the screw cap, +2.38 R$/liter (+51.88%) for iron, +0.89 R$/liter (+21.06%) for calcium, +2.10 R$/liter (+46.28%) for the Lactose-free attribute, and +0.27 R$/liter (+7.22%) for semi-skimmed milk. These findings hold significant implications for the dairy industry, guiding product portfolio strategies, market share considerations, and profitability assessments.