Thinking about Value in Wine
Value is a funny thing. When we hear value, we tend to think of lower-priced wines (many of which do not deliver value) but low-priced wine is nowhere near the whole story. While it may be hard to think of $75 bottle of wine as a value, the fact is that many (which is not to say most) are. Saying that a wine offers value means that it over-delivers at its price point. Once viewed in that light, it becomes clear that there are values – wines that over-deliver – at every price point, just as there are wines that under-deliver at every price point.
What is hard for me is to say that “this $25 wine is ‘as-good-as-that’ $75 wine” – because in the vast majority of cases, it isn’t. If it were, the market would have pushed up the price of the $25 bottle and pushed down the price of the $75 bottle. Or both. If, over the long term, both wines are stable at their price points (meaning that they have achieved market equilibrium), then, at least for those who are buying them, they deliver at least fair value at their respective price points.
While much is made of the occasional blind tasting where a cheaper wine trounces a flashier bottling, it happens less often than you might think. You hear about it because it’s so unusual and because it becomes news. An expensive wine trouncing a cheap wine isn’t news (and so is not reported) because that’s what’s supposed to (and most often does) happen. So you read about the cheap wine that won. And you wonder if it really is better.
When I read about something like that, I ask some questions:
– How where the wines tasted and presented?
– Were they tasted or drunk?
– How much time did the tasters have with each wine?
– Could they directly compare back and forth?
– Did the tasters know the prices of the two wines?
– Was there an interest in the outcome or bias on the part of whoever was conducting the tasting?