The case reading for tomorrow's class about Domaines Barons de Rothschild got me thinking about luxury wine. I could buy a bottle of Lafite, 2009 vintage right now for $1,250 on Wine.com. Yes, the scores are great, and I'm sure I could impress someone if they were in-the-know, but would it really be worth it?
I turned to the Internet with my question: Is expensive wine really that much better?
This Pricenomics piece helped me with a few interesting statistics to support two hypotheses:
- People are reaching for cheap wine ...
- Among Americans who drink wine regularly, only 12% spend >$30 on a bottle weekly or monthly
- ~90% of wine by volume is priced <$10 / bottle
- ... because expensive wine doesn't even taste better!
- In 2007, Charles Shaw was named California’s best chardonnay at the California State Fair Commercial Wine Competition. “It was a delight to taste,” announced one judge
- In 2012, top French wines (including the premier cru Château Mouton Rothschild) barely defeated wines from New Jersey in a professional tasting, which cost 5% as much
- A 2008 paper in The Journal of Wine Economics found that when consumers are unaware of a wine’s price, they “on average enjoy more expensive wines slightly less”
An expert in this Pricenomics piece is quoted as saying, "pricing is maybe 25-30% quality, 70-75% brand." The problem with brand contributing so much "value" is that people have to know a lot about the brands in order to assign value to them. It's not looking likely that my friends or others I want to impress will amass this knowledge anytime soon, so what would the value of acquiring these brands be to me? If no one knows enough about the brand to care, does the brand matter? If an inexpensive wine can masquerade as a more expensive bottle in design and in taste, does the brand matter? What if the "brand" element my friends actually care about is how cute the bottle looks?
Don't get me wrong - I enjoy my indulgences. But with each of my choices, I find a clear marginal benefit to my marginal dollar. A $300 sushi dinner is always at least 10x as good as a $30 one. A first class ticket is always better than its coach counterpart.
With wine, I just don't get it.
I'm going to keep doing what (I think) everyone else does - buy the 2nd cheapest wine.
Emily -
ReplyDeleteI really enjoyed your blog post and previously followed the same tactic. Unless I felt like doing a bunch of quick Googling at the table, I would order the 2nd cheapest wine if I had no familiarity with the wines at a restaurant. I think your last paragraph summed up my thoughts perfectly. I've had incredible expensive wines and I've had terrible (or maybe not the right taste for me) expensive wines, but I've never had a terrible expensive sushi dinner - so why risk it with the wine?
One thing that has caused me to reevaluate this tendency is that I've heard that many restaurants are aware of consumers' habits of doing this and will even reprice wine that they need to move inventory of to be the 2nd cheapest wine. This practice is highlighted in this article: https://www.atlasobscura.com/articles/second-cheapest-wine.
As such, I've become more reluctant to order the 2nd cheapest wine and have started asking the somm / waiter / waitress for recommendations based on the upcoming meal or what I'm in the mood for. Unsurprisingly, I've started to enjoy the wine I order at meals much more! I'd encourage you to try the same and see how your experience changes. Either that, or start splurging for the 3rd cheapest :)
Emily thank you for your post! I have had the same realization during class that price is only partially correlated with quality (the data is helpful!). My "splurge" on the $12 bottle instead of the $9 bottle at Trader Joe's is probably a pretty futile attempt drink better wine. As Tripp Donelan told the class, it's really just about drinking the wines you like.
ReplyDeleteIn fall quarter I attended a blind chardonnay tasting (and hosted a sparkling wine version) that perfectly demonstrated this point. Everyone tasted 8 or so different Chardonnays ranging in style and price without seeing the labels. We took notes on what we liked and tried to match the wines (identified only by number) with a list of the wines' names, region, and price point. At the end of the tasting, everyone said which numbered bottle was their favorite and guessed which of the wines it was. Sure enough, everyone (including me) thought that their favorite bottle was most expensive wine. Naturally, we were all wrong. My favorite wine was a $8 bottle from Whole Foods, lucky me!
In an effort to direct more of my wine budget based on actual preferences rather than label/price, I've resolved to use a wine app to keep track of the brands/wines I like, whatever the cost. I'm trying "Vivino" at the moment which very impressively identified both a $5 TJs bottle and a niche Birdhorse instantaneously based on a picture of the label. I want to keep up with the habit so that eventually when I'm shopping for a good wine I can choose based on preference rather than spending $4 extra and crossing my fingers.
My confusion/frustration in the face of uncorrelated wine price and quality makes me wonder whether there's an opportunity to cut through more of the noise around wine buying. The WineDirect case noted that Costco stocks a "relatively limited selection [of wines], which helped cut through confusion associated with wine buying." Until I have the disposable income and knowledge to buy wine based on region/winery, I'd love to have a wine option that was transparent about its quality differentiators and pricing. Could an Everlane-esque wine brand work, even if it meant giving up some margin?