The U.S. is predicted to be the largest wine consumer by 2008. The driving forces of globalization have significantly altered the competitive landscape of wine industry. While the demand for wine in the U.S. is growing, U.S. wineries continue to lose domestic market share. In order to counter foreign competition as well as grow in this volatile environment, they must evolve by adopting a stronger market orientation. That is, consumers should be at the core of any plan. This shift in orientation requires a solid understanding of consumption behavior of wine drinkers in the U.S. To this end, this paper offers a fresh perspective on the consumption behavior of wine drinkers in the U.S. In this study, we estimate econometrically the determinants of wine consumption. One of the goals of this study is also to provide a roadmap to identify and quantify determinants of wine consumption by employing an econometric procedure called Categorical Regression Estimation for non-numeric response variables. In empirically testing such effects, we used 122 survey responses and found significant positive relationship between knowledge and consumption of wine. Although age and race appear to influence consumption of wine, knowledge remains the most important determinant in wine consumption. The results imply that U.S. wineries need to better educate and connect with consumers by developing compatible positioning strategies and marketing programs that are as informative as entertaining. The results provide further managerial and theoretical implications and directions for future
research addressing consumption behavior of drinkers in the U.S.

Keywords: Wine marketing, consumer behavior, categorical regression, wine consumption.


Mahmood Hussain, 
Ph.D. Assistant Professor of Marketing
Richard Castaldi, Ph.D.
Professor of Strategic Management
Susan Cholette, Ph.D.
Assistant Professor of Decision Sciences
College of Business
San Francisco State University
1600 Holloway Avenue
San Francisco, CA 94132, U.S.A.
Contact: Mahmood Hussain, Ph.D.
Email (preferred): hussain@sfsu.edu
Phone: 1-415-338-6290
Fax: 1-415-338-0501