Due to the decrease in fluid milk consumption as a beverage in the United States, the importance for dairy industry stakeholders to understand attribute preferences for consumer segments has increased. This paper uses a representative sample of U.S. residents to determine shopping behavior and a Best-Worst experimental design to examine consumer preferences for select milk attributes. The Random Parameters Logit model revealed the largest preference shares were for price (19.1%), fat content (17.6%), and humane handling (16.1%). Segmentation of the respondents was analyzed using a Latent Class Model, and the demographics of segments were analyzed by probabilistic assignment. This contribution, which may be applied to other products, allows for a detailed understanding of consumer preferences for fluid milk. Demographics such as gender and age were not statistically different across the five classes for this topic, unlike shopping behavior. Class 2 was named "The Balancing Act" due to respondents' balance between animal welfare aspects and the physical characteristics of milk. Class 5 was dubbed "Value and Volume" due to large preference shares for price and container size. A lower percentage of respondents in "The Balancing Act" (12.2%) reported purchasing fat-free skim milk when compared to the percentage of respondents in "Value and Volume" (18.6%). Due to the large preference shares for traditional milk attributes, Class 3 was named "Traditional Milk Shoppers." A higher percentage of respondents in "Value and Volume" also reported always reading the information on meat, egg, or milk products when compared to "Traditional Milk Shoppers" (12.2%). Although price is still important to many consumers, certain segments have preferences or demand for other attributes that may be satisfied by producers to increase market share or price premiums.
Keywords: Best-Worst Scaling; Consumer preferences; Dairy milk.
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