Analyzing the Drivers and Preferences of Functional Dairy Food Consumption: A Socio-Economic Perspective from Tamil Nadu

Abstract

In today's consumer market, individuals are subject to various stimuli such as advertising campaigns, popular magazines etc., which shape their marginal consumption propensity. However, as Economic Theory teaches us, this propensity does not necessarily translate into consumer spending. This is strongly affected by consumers’ eating habits, individual circumstances and other contextual variables. This study, conducted in the Tamil Nadu state of India explores the consumer preferences and factors moderating the consumption of functional dairy foods (FDFs) based on the data collected from 220 respondents (160 consumers and 60 sale points). Socio-economic profiles were analyzed using tabular and frequency analysis, while indices were constructed to assess consumer preferences. The Seemingly Unrelated Regression model was employed to identify factors moderating functional dairy foods consumption. The findings highlight that safety/trustworthiness was the most valued attributes among consumers, followed closely by nutritional and health benefits. Despite being in the early stages of adoption, functional dairy foods, particularly fortified milk, demonstrate significant growth potential. Key determinants of consumption include family income, price sensitivity, occupation, dietary habits, family size and geographic location.