Making the Right Choice: Wine Pricing and Perceived Quality

As a novice wine lover, how much can one rely on price as an indicator of quality in wine? I know that when I am at a loss in the face of endless options at a wine store or when staring at a wine list (read: book), I often resort to price as a filtering mechanism.

                                             source: Wine Folly

While some of this is simply a function of practicality (each consumer has an individual willingness to pay for wine depending on their purchasing power, the occasion, and a variety of other factors), differentiating on price in the super and ultra-premium bands $20-$50 is tricky. Additionally, given the 3 -tier system and the truth behind markups, how does one know what they are paying for? To what extent is the price due to supply chain and distribution vs the quality of the wine. Furthermore, after learning about grand crus and its impact on pricing, despite variability in quality and improvements/degradation over the decades, I find myself wanting guidelines for how to interpret what is signaled by price and how to make a smart choice.

Price and quality must be connected in some way, for example, if a wine originates from a small winery on another continent, the markup probably reflects something special about the wine (e.g. that it was hard to obtain, was produced with care and expertise in small batches/from low yield vineyards). However, how does one take the next step to understand the association between price and quality/taste? To what extent can a bottle's price be used as a proxy for how much someone might like the wine?

This next note "culled from the collective wisdom of sommeliers and other wine professionals", did not help to clarify the situation:

""Restaurants will likely jack up the price by two to three times the retail price, but the more expensive the wine, the less the mark up," Soltani told INSIDER. "So even if you are on a budget, don't pick the cheapest wine on the list. I would go for the second cheapest. Also, one bottle of wine equals about four glasses. But if you pour tasting pours (two ounces), the wine will go a lot further."
(Our experts disagreed on whether or not the cheapest or second-cheapest was the worst option to order on a wine menu. If you're on a budget, it's safe to go with a cheaper mid-range bottle.)" - How to Order Wine Without Looking Like an Idiot, Serious Eats

It pays (no pun intended!) to recognize how complicated this question is given the psychological factors that feed into human satisfaction and perception of value. "Value", "quality", cheap/expensive, and what is considered to be a valid substitute for a "good" wine is all at least somewhat subjective, and therefore varies from person to person. As an example, someone who doesn't place a high premium on rare wines or the story behind a wine might be upset by a higher price, particularly if they are able to identify a lower-priced (better value) substitute.

It is difficult to ascribe "rules" to guide making wine purchasing decisions based on price. It is hard to hold anything constant given the compounding complexity of consumer perceptions and preferences, and the many ways in which the products of the wine industry can be cut and examined. To be continued!

Wine Refrigerators

Professor Rapp mentioned that she was a fan of Subzero wine fridges during the last class, so I decided to do a little research on the cost and quality of different fridges.

On Amazon, the best seller listed was a 24" $849 Kalamera model, but there were several well-rated, similarly-sized models in the ~$200 range. The "Amazon's Choice" option was a $190 Ivation model. However, that model is slightly smaller than 24".

On the Subzero website, the 24" model retails for about $4,000. That's almost a bigger brand premium than we see in the wine itself!

Finally, I took a look at some of the recommendations on the Wine Enthusiast website. They offered a couple of Wine Enthusiast-branded refrigerators for ~$500, and a couple of N'Finity options for about ~$1,000.

I looked for more information on the Wine Enthusiast website to understand refrigerator quality. It seems that under-counter units require front vents, and tend to be slightly more expensive. These are the refrigerators that can "blend into" your kitchen cabinets, rather than being standalone. Having two temperature zones (to store red vs. white wines) also increased price. Overall, I didn't see much information to justify a large brand premium -- but if any Subzero fans out there want to make their case, please comment below!

How to Order With Confidence (or) Never Choose the 2nd Cheapest Bottle

I thoroughly enjoyed Alder Yarrow’s perspective. I found his approach accessible and particularly appreciated two takeaways: first that assessing and interpreting wine is entirely subjective, and second that the importance ascribed to a given wine is largely derivative of the story/influencer reading of the juice. I came out of the talk feeling that- if I were to expose myself to enough wine- I could develop a valid opinion/taste.

However, for the time being, Alder’s talk brought up one tactical (and possibly pedestrian) question: if interpreting/describing wine is so subjective, how would you accurately order wine to your taste at a restaurant, or ask for a recommendation per your personal preferences?

Of course, if you are an expert or are well-versed in your preferred wines it may be easy to spot a wine on the list or to generalize the taste you are going for, but as a beginner, this seems challenging. It is (admittedly, sometimes) embarrassing to ask the sommelier/waiter’s recommendation for “a dry white.” 

Maybe I have a bad memory, but I generally struggle with wine lists (even with Vivino’s help). As a result, when it comes to selecting a red wine I often resort to the cabernet sauvignon on the ‘by the glass’ list or ask the somm for the most “full-bodied” red- which I generally enjoy (though that’s probably the vaguest description, confirmed by Alder’s detailed tasting card). When it comes to white wines I am lost (aside from requesting a “dry” or “minerally” white). Should I instead say that I prefer “ocean air” over “butter”? I have a feeling that wouldn’t go over well.

The words that I have used to describe my taste preferences when ordering wine differ somewhat for red and white wines but have resulted in inconsistent outputs and overall varied success (measured by whether I like the wine I ordered, how closely the taste matched what I was attempting to put into words, and the somm’s reaction to my amateurish requests). Based on some of the reactions that I have received when ordering it is entirely possible that the descriptions I have attempted may have even been contradictory (e.g. is it possible for a full-bodied red to be earthier rather than fruit-forward? I hope so…).

After class I did a quick “how to order wine” google search and found that, in-line with Alder’s comments, lack of confidence around ordering wine plagues many. There are countless articles with step by step instructions on how to order wine, including Wine Mag’s “How to Order Wine in a Restaurant: 14 Alternatives to Panicking.” While this article certainly wasn’t foolproof, I found a few tips to be encouraging, including:

·      -  “Lesser known wines (usually) mean greater value.”

·       - “Skip the second cheapest bottle.” (we also covered this in our microeconomics class) - this has inspired me to look into pricing for my next post!

·       - “Know what you like and be honest with yourself.”

·       - “New World (fruit-forward) or Old World (earthy)” - this seems like a helpful break down…but is it really this generalizable?

I will continue to look into this, and will let you know if I find anything particularly ground-breaking!

Session #4 The Grapevine

I bet you’re wonderin’ how I knew? ‘Bout your plans to make me blue.

Historians segment marketing history into two primary categories. Marketing practice which many believe emerged in conjunction with the rise in consumer culture following periods such as the industrial revolution. This involves the typical product differentiation, market segmentation, positioning, insight and communications strategies. The history of marketing thought is a broader field of work, with evidence dating back as far Pompei and a manufacturer of fish sauce. Although in this case the fish sauce was used to corroborate the date of the destruction of Pompei, artifacts displaying a personal brand and claims of quality of his product are an insight into early historic consumer marketing thought.

Fast forward to 2018, and although we live in the age of social media and influencers, as evidenced by Terry Wheatley’s talk, much of the core principles remain the same. People often refer to an advanced grasp of subject matter expertise as an ability to make complex things seem easy. I have no doubt that there are complex systems, networks, and know-how below the surface of the nonchalant charismatic Terry, that created a perception of simply being able to walk down the street, see an inspirational photo, attach a provocative name, source some great wine, and voila, a new successful wine brand.

Furthermore, part of the unseen machinery, I believe there is a very strong network of word-of-mouth advertising and networks. Creating decent wine is one thing. Creating an interesting brand is another. But launching it successfully into the politics of the beverage, hospitality, and retail industries, requires a little something more.

That said user empathy design practice has taught me to appreciate the root emotions behind actions and perceptions. They are stronger than we can imagine, and if harnessed in the right way, are more powerful that any narcissistic Instagram influencer’s ability to shape public thought.

I know a man ain't supposed to cry. But these tears I can't hold inside. Losin' you would end my life you see. 'Cause you mean that much to me.

Rose cider is here and it could be the millennial pink drink of this summer

I just finished reading multiple articles about how rose cider is finally in production and is going to take over with millennials and to be honest, I am surprised it took this long to happen. As one of the articles discusses, rose cider is inspired by the light and fruity elements of a rose wine and made with red fleshed apples that give it a bright taste and color. It is not just from one company either - Angry Orchard, MillerCoors, Strongbow and Bold Rock are just a few of the brands seeking to capitalize on the rose trend with their ciders, but it seems to all be happening at one, which, once again, is shocking that it took so long for them to get on board. By combining trends like rose and cider is one way liquor companies hope to reignite sales, especially amongst the millennial population. These ciders are also including ingredients like pears and rose petals to differentiate amongst a soon-to-be saturated market. 

While rose only represents about 1.5 percent of the total table wine category, it's growing at a massive rate, according to data from Nielsen Rose sales climbed nearly 40 percent in the year in 2017, according to the market researcher.

Has anyone tried this yet? What is the review? Or does anyone know other trends that have started in wine and transitioned to beer/cider?

One of many articles over the past few days:  https://www.cnbc.com/2018/02/23/angry-orchard-taps-into-rose-millennial-pink-trends-with-new-cider.html

Wine Directors

Our class has made me think a bit about the role that wine directors at restaurants play in the wine industry.

In reading this piece on Jeff Kellogg of Quince, I realized the end consumer is still really driving a lot of his wine sourcing. Dom is their 2nd highest selling wine, even though it seemed that it wasn't his personal favorite champagne. The article says that this is driven mainly by consumer request - people want to drink Dom when they're celebrating, and there's a tech executive who dines there frequently that only drinks Dom. Consumer preference is also guiding his choice of Chardonnay. Apparently folks that come in prefer one of two types of Chardonnays, either a big Napa chard or a lighter one to pair with the food (although as we learned in class...ABC...).

The second factor that seemed to drive his buying besides his own opinion of the wine and how it pairs with the food was the quantity that was available. It seems that he needs to have a wine with enough quantity to keep stocked for a busy restaurant.

Interesting read that shed some light on these other factors in the wine industry!


https://www.wineandspiritsmagazine.com/people/restpoll-entry/jeff-kellogg-of-san-franciscos-quince-and-cotogna-on-extreme-chardonnays-an

Good / Bad Vintages - What Are They?

In class last week we briefly talked about "good" and "bad" vintages in Bordeaux - but what does it mean to be good or bad? I did a little research to address the factors that impact vintage, the consequent flavor profile, and ways winemakers can cope with less desired vintages.

According to Denis Dubourdieu, professor of oenology at the University of Bordeaux, there are five main criteria for a great vintage (1):

"1. An early and rapid flowering and a good fecundation assuring a sufficient yield and the hope of a homogenous ripening
2. Sufficient hydric stress at fruit-set to limit the growth of the young berries and determine their future tannic content
3. Cessation of vegetative growth of the vine before colour change, imposed by limited hydric stress and therefore allowing all the goodness from the root to flow into the grapes and not unproductive growth
4. Complete maturity of the grapes (sugar content among other factors) assured by the optimum functioning of the canopy (leaves) up to harvest time without further vegetative growth (point 3)
5. Good weather during vintage without dilution or rot, allowing full maturity of all grapes including late ripening varieties"

Translating the winespeak back to English, the key points are 1) early and rapid flowering, 2) lack of water when grapes start to grow in early summer, 3) vine shoots stop growing before grapes change color, 4) adequate heat and sunlight for full maturity of grapes, and 5) not too much rain. As you have probably guessed, the key to a "good" vintage is conducive weather conditions that help grapes grow and concentrate their growth in the ripening of the grains (i.e., not waste energy on growing the vines). 

So how does vintage quality affect how a wine would taste? Well, in poor vintage years, the grapes would not get enough energy and nutrition during its growth months in the summer to fully develop, or weather conditions in the fall become too harmful and the grapes need to be harvested prematurely. Therefore, wines made in poor vintage years generally lack intensity and complexity that one would find in better years, and the flavor profile has less potential to develop as the wine ages. 

However, there is also a different school of thoughts. Prof. Roman Weil at the University of Chicago conducted an experiment where 270 wine tasters were asked to judge bottles from various vintages that are accessible to the general market (~$20/bottle), and interestingly, the tasters couldn't tell the good vintages from the bad ones except for Bordeaux wines (2). The outcome corroborates with the popular belief that Bordeaux wines are more subject to weather conditions due to the volatility in its climate, but vintage might not matter that much for other regions, especially for wines that are not meant for long-term collection.

Finally, it's intriguing to think about what a vintner could do when the weather fails to cooperate. A common strategy in a bad vintage year for winemakers is to be more selective during harvest and reduce yield. A famous Tuscan wine maker named Piero Talenti was quoted saying "there are no bad vintages... there are just vintages in which we make less wine." (3) Another strategy, surprisingly, is to convince merchants that a bad vintage can improve with time. A Wine Folly article quoted US 2011 vintage as an example: it was considered a very cool and therefore unimpressive vintage, but the wines made in that year turned out to have higher acidity, and those made from prestigious winemakers were believed to have superior aging potential as a result. (4) 

In conclusion, vintage is probably more helpful for wine collectors, especially those who focus on regions like Bordeaux that are more susceptible to volatile weather conditions. Meanwhile, the $20 bottle of 2015 Bordeaux (a great year) we got from Costco might not taste that different from the 2012 one (a mediocre year). 

Sources: 

(1) http://www.decanter.com/learn/what-makes-a-great-vintage-276820/

(2) https://www.huffingtonpost.com/2015/03/03/wine-year-important_n_6784400.html

(3) http://www.boulderwine.com/wine-blog/why-bad-vintage-good

(4) http://winefolly.com/update/the-anatomy-of-a-bad-vintage-for-wine/