The search for the true value of a bottle of wine
A couple of years ago, one of the presenters at the WSET BACK Course received a fair amount of sympathy from the audience when he described his embarrassment at being offered a glass of Ogio by friends. He’d found out that they had paid £8.99 for what he knew was a brand designed to be sold as a BOGOF at half the price. I would suggest that his view, that such wines represent a rip-off, is not uncommon within our industry.
I found this incident and the ensuing discussion (which I try to recreate in my Diploma Marketing classes) very interesting. I believe it gets to the essence of one of the problems we face as an industry, which is that we often get too close to the product.
Inevitably those of us who work in the category are much closer to being able to judge the true value of the liquid in any bottle than outsiders. This helps us all spot bargains as well as obvious overpricing, but it has two major drawbacks.
The first is that we can believe that we have a greater understanding than is actually the case. I would suggest that even the wine experts among us fall some way short, and that’s simply because we are all inevitably prisoners of our history and of our experience.
Prisoners of history
As an example, if I presented a buyer with a good Pinot Noir at £10 per bottle, and said it was from Eastern Europe, the perception would probably be that I was pushing it at that price. If however I said that the same wine was a Burgundy, then it would likely be seen as a bargain. What is perceived as fair or appropriate pricing varies significantly by region, style, varietal, and even by producer. There isn’t some global standard.
Given experts can judge much, if not all, of the above from a blind tasting, then preconceptions must surely play a role in determining their view of a wine’s value, however much they attempt to keep an open mind.
Emperors with no clothes
As a follow on point, if we are concerned about overpricing, I would suggest that if there was a survey of the world’s most overpriced wines, nothing under £10 would come remotely close to the shortlist. Our focus would surely fall on emperors wandering around their estates without any clothes, rather than lesser mortals hanging around naked in supermarkets.
BOGOFs, however, seem to be a particular cause of irritation and I don’t fully understand it. By all means let’s criticise an excess of deep discounting as being bad news for the category (and I’m quite prepared to accept my share of the responsibility for that trend). We might also be uncomfortable with mechanics which encourage bulk purchase, but both these criticisms are not the point under discussion here.
The interesting point in the story above is surely that the consumers in this case selected Ogio from a crowded shelf, were happy to pay £8.99 and – we were subsequently informed – enjoyed the wine. If that was the case, then if anything we should be questioning why Tesco needed to discount the wine at all!
And the same point is valid all the way through the price spectrum up to fine wine. If consumers believe someone is wearing a particularly fine Armani suit, and all we can see is a pair of flip flops, then it’s the consumers’ vision that matters, not ours. By all means let’s suggest they buy stronger glasses, or point them in the direction of someone we believe more appropriately dressed. But in the end it’s their choice.
What is the correct price for a bottle of wine?
Which brings me to the second drawback. Ultimately the issue with any discussion about the true value of the liquid in the bottle, and whether or not that makes a wine overpriced, is that it’s all rather meaningless. The correct price for a bottle of wine is the price that someone is happy to pay. The consumer’s level of contentment will be determined by a number of factors and the value of the actual wine as perceived by an expert may not even feature on the list.
Consumers behave in the wine category as we (wine people) almost certainly behave in other categories: often irrationally, probably far more aware of brand imagery than we would like to admit, and generally overly influenced by factors that have nothing directly to do with the substance or function of the product.
All of which implies that there are assuredly many instances where we are all making purchases which insiders would regard as significantly overpriced. However if we do so quite happily and are inclined to repeat the purchase, and even to recommend the product to others, then surely that is the true measurement of value.