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G UES T ED I T O R I AL Viewpoint We welcome commentaries from readers on issues of current interest in the wine industry. Send your topic idea to edit@winesandvines.com, and we'll contact you. Is There a Market for Sulfite-Free Wine? By Chris Appleby C onsumers are increasingly seeking out natural food products, a trend that stems from a growing suspicion of additives and chemical preservatives. Because natural foods are commonly linked to good health and being better for the environment, products marketed in this way are often priced at a premium. Within the wine industry, these marketing campaigns are sometimes manifested through the fast-growing organic sector that, among other things, forgoes the use of added sulfites. As documented in the popular press, sulfites seem to be under more scrutiny than other chemical additives, which may stem from the common belief that they trigger a malady frequently dubbed the "wine headache." While a few individuals do have a documented allergy to sulfites, we were not able to find medical research establishing (or denying) a clear link between sulfites and the wine headache. Even so, the negative perception that many consumers seem to have—and our finding that consumers are confused about whether sulfites are added to organic wines—may imply the existence of widely unexplored niche markets for conventional no-sulfite-added wines. Producing wine without using sulfites is increasingly feasible today, given the advent of climate-controlled facilities, stainless steel fermentation vessels and new pasteurization technologies such as ultraviolet light. We recruited 223 patrons of a large retail wine store in Fort Collins, Colo., to participate in an online survey. The survey asked participants to report basic demographic information, whether they experienced headaches after moderate wine con- 98 W in e s & V i ne s AP R I L 2 013 sumption and to list likely causes of their wine headaches. It then included a series of hypothetical purchasing scenarios that included both non-sulfited and traditional wines varying in price, quality and method of production (e.g., organic, sulfite-free). Many consumers are willing to pay a price premium for wine that does not trigger the wine headache. The results clearly showed that consumers perceive sulfites negatively. Thirty-four percent of survey participants reported suffering headaches after moderate wine consumption. Of that group, we found that a potentially large marketing niche may exist, as 63% attributed their headache to sulfites and, other things being equal, were willing to pay a price premium of $1.23 per bottle for a sulfite-free wine (compared to 64 cents for the overall consumer population). However, the premise that consumers value sulfite-free wines does not necessarily mean sulfites will play a fundamental role in their purchasing decisions. Headache sufferers are only 3.4% more likely to make a wine purchase because of sulfite-free production, and other results suggest that quality and price play a much bigger role in determining purchasing intentions. For example, we found that consumers will pay $2.84 more for a fourpoint increase in a wine's quality rating (on a 100-point scale) and are 5.7% more likely to purchase the higher rated wine. Additionally, a wine priced in the $30-$35 range, all else being equal, is 33% less likely to be purchased compared to a wine in the $10-$15 range. The marketing implications may be encouraging, but vintners should carefully consider the production risks associated with low-sulfite wines and weigh them against the advantages that could be gained. Sulfite-free vinification is hardly advisable if it comes at the price of large per-unit increases in costs or to the detriment of product quality. Furthermore, it remains to be seen whether the problems of headache sufferers will be solved by sulfite-free production. If this is not the case, consumers' interest for preservative-free wines may diminish. Another important question for marketers includes understanding why the negative perceptions toward sulfites exist in the first place. Because of documented sulfite allergies, any wine containing greater than 10 parts per million of sulfites must include a "contains sulfites" statement on the label, per 27 CFR 4.32. We believe this regulation creates a "lightning rod" effect, causing consumers to attribute their wine headache to sulfites simply because sulfites are singled out on the label. Since exogenous factors can both create and shift perceptions rapidly, marketing a low-sulfite wine may be more suited to attract health and environmentally conscious customers initially, with a subsequent focus on brand loyalty and quality to retain them in the long run. Perhaps the most important finding of our research, though, is that many consumers report experiencing the wine headache, and they are willing to pay a price premium for wine that does not trigger it. Regardless of how sulfites are currently perceived, the results indicate that goodquality wines with a lower potential to induce headaches would grant access to a substantial share of the market. Chris Appleby graduated in August 2012 with a master's degree in agricultural and resource economics from Colorado State University. Appleby lives in Lenexa, Kan. This research was presented as part of his master's thesis under the supervision of Dr. Marco Costanigro.