“Is $10 wine the new $100 wine?” was one of the best-read posts on the blog at the beginning of the recession, explaining why cash-strapped consumers were trading down — and that they were shocked to find that wine quality at $10 was much better than they had been led to believe. Today, as we deal with a glut of overpriced and poorly-made wine, often by reputable producers, it’s my sad duty to ask: Is $15 wine is the new $8 wine?
Over the past 18 months, I’ve tasted so much junk at $15 that even I’m surprised, and I’m the one who included a section in the cheap wine book that said that the $12 to $18 range — “the province of ‘Big Wine’ marketing — offered the least value. But what I’ve tasted since the end of 2014 has been even worse than that, $8 of value dressed up in a $15 bottle.
How has this happened?
• A determined effort by producers, mostly big but also smaller, and in regions like Lodi and the less well known parts of France, to separate what they make from the so-called “cheap wine” that we’re not supposed to be drinking. They’ve done this by creating new products with flashy labels that are made the same way as their old wines and at more or less the same cost, but retail for more money. This way, they’re creating the impression that the new wine is worth the extra money, when it’s mostly the emperor’s new clothes. Or, as a boss at Treasury Wine Estates calls it, “masstige.”
• Wretched grapes. Those of us of a certain age remember when wine was made with unripe and poor quality grapes. Unripe grapes gave the wines a green, almost crab apple quality, and poor quality grapes left the wines thin and bitter. Those grapes, which seemed to be long gone, are back and particularly in whites. I’ve tasted $15 chardonnays and pinot gris that were practically gaggable, the sort of wine you spit out and wonder what the producer was thinking.
• The increase in grocery store wine sales. This means we’re buying more wine on our own, without help from knowledgeable retailers. And that means we have to depend on the front and back labels more than is good for us. And if the front label is cute and the back says smooth and chocolate, we’re sunk, and end up paying more for the wine than it’s worth.
There is a cynicism at work here that’s more depressing than anything else, and something that wine — even when it did these sorts of things — never really enjoyed doing. But those days seem to be over.
Don’t expect good news for wine prices or wine quality in 2016, and it’s more than my curmudgeonly cynicism saying so. The wine industry’s best price forecaster expects price increases next year, while a wine blogger who has been spot on about decreasing quality over the last couple of years sees more of the same.
Wine prices, says Rob McMillan of Silicon Valley Bank, will go up slightly next year, citing what looks to be a reduced harvest in California over the past three blockbusters, low gasoline prices, and producer optimism that they can raise prices. In addition, says McMillan, the numbers so far this year suggest that prices have been increasing, even though overall sales have been modest.
Interestingly, he doesn’t use the word premiumization to describe what’s going on, given that McMillan was one of the first people to identify the trend, that U.S. wine drinkers are trading up to more expensive wine. In fact, he seems almost surprised that prices will go up, given that “the the world’s economies are still struggling and our own [economy] isn’t setting any record.”
McMillan doesn’t define slightly, but my guess is that we’ll see as much as a dollar or so on a $15 bottle of wine, not that it will be that obvious. Those $9.99 wines will go up to $10.99, but there will various discounts, like case and club membership, to soften the blow. Plus, we’ll see even more new wines in the $12 to $15 category, as producers entice wine drinkers to spend a couple of bucks more for the same kind of wine they bought before.
As to quality, let me quote my pal Steve McIntosh at Winethropology. “The wine world is going to hell in a handbasket,” he emailed me, citing this post, in which he details (and it’s excruciating) how California winemakers are bastardizing wines that cost as much as $20 so they taste the way a focus group thinks they should taste.
In this, his post dovetails with what I’ve tasted over the past year, as producers focus on manipulation to push wines in the focus group direction and paying less attention to grape quality and varietal character in the process. This has been the case not just for wines from California, but from France, Spain, and Italy. A distributor friend, who has been in the business for 20 years, said he has seen wine quality go backwards, toward where it was in the late 1980s and early 1990s. In fact, so many wines have been so poorly made that I’m thinking about posting negative reviews, something I never thought would be necessary. But these wines are so dishonest that someone needs to call them on it.
I expect a wine to taste like wine, and not what Steve calls cough syrup. But apparently that’s too much to hope for these days.
Because, finally, someone has discovered a way to measure the relationship between what’s written on wine back labels and the quality of the wine.
The breakthrough came from a Harvard Ph.D. student named Mark Thornton, who took data from 75,000 wines in the Wine.com inventory, and compared what was written on their back label — and not what the words meant — with ratings from the site’s users and from wine critics.
The findings? That certain words appear on the back labels of wines of lesser quality, while certain words appear on the back labels of wines with higher ratings. Thornton told me he knows this isn’t perfect, given how scores and wine ratings work, and he wants to improve that part of the study. In addition, he wants to refine the way his software decides which words to analyze, perhaps eliminating regions and better understanding phrases, like grilled meats instead of grilled and meats.
What does matter is that Thornton’s work is apparently the first time anyone has done this kind of research, making it as revolutionary as it is helpful in deciphering the grocery store wall of wine.
Thornton, whose parents teach in Cal State Fresno, says this study interested him because it’s about wine, which he likes, and because it ties into his PhD research, which deals with how we describe things. One of the concepts this study takes into account is called “naive realism,” in which we assume that what we sense has to be true for everyone, when it obviously isn’t. Which dovetails neatly with wine.
Thornton’s findings confirm many of my suspicions about wine back labels, as well as how critics use descriptors. The word clouds on his site summarize the results; I’ve set them up so you can see them more easily here for the consumer ratings and here for the critic ratings.
These are among the highlights of the study:
? Restaurant food pairings or terms like pasta appear on the labels of the lowest-rated wines. Thornton says this may well be because the wine doesn’t have any wine-like qualities to recommend it.
? Words used to describe sauvignon blanc — grapefruit, herb, clean — show up on the critics’ lowest-rated white wines. This is not surprising, given that sauvignon blanc has always garnered less respect from the Winestream Media than chardonnay.
? A location on the back label seems to indicate lower quality white wine; “handcrafted” is in the higher quality word cloud. For reds, “value” and “soft” are poor-quality words, while “powerful” and “black,” probably used to describe black fruit, infer higher quality. Handcrafted is especially interesting, since it doesn’t mean anything in terms of wine production.
Finally, a word about prices, which is also part of the study. Thornton divided the consumer ratings into five price ranges, and there was little difference in perceived quality between the first three ranges. In other words, you get more value buying the cheapest wine. Shocking news, yes?
The critic price-value rankings were even more bizarre. The worst value came from wines that got scores in the mid-90s, while wines in the high 90s (and even 100) were less expensive, and the best value wines were around 90 points. Thornton says he isn’t quite sure why this is true, though it may have something to do with critic bias. My explanation is simpler: Wine scores are inherently flawed.
“So, Jeff,” the conversation begins, “Why don’t you like expensive wine?”
This isn’t the most common question I’ve been asked over the past eight years, but it’s common enough. These days, unfortunately, it’s not only more common, but there’s often an edge in the voice of the person asking it. As in, “So you’d rather drink crappy wine just to prove a point?”
Of course not. I love wine; why would I want to deprive myself of the pleasure it brings, regardless of price? How many times have I bored the cyber-ether with my odes to white Burgundy or Oregon pinot noir?
Because I don’t dislike expensive wine. I dislike poorly-made wine and overpriced wine, where profit is all that matters and quality is barely a consideration. I dislike dishonest wine from producers who use winemaking tricks or marketing sleight of hand to fool the consumer. I dislike pretentious wine, which we’re supposed to like because our betters tell us we should.
Cheap wine can be any of those things just as easily as expensive wine can, and I call out that kind of cheap wine all the time. Hasn’t anyone read my Cupcake reviews?
The difference, wine being wine, is that too many still assume that those qualities can’t possibly apply to the wine they bought for $24.99. After all, it came from a retailer who winked and nodded with them as if they were pals in on a big secret, and didn’t the wine get 93 points from this really smart guy who has the best palate in the world, and which we know because he tells us so?
So when I write something about their wine that they don’t like, as I am wont to do, they assume it’s because I don’t like expensive wine. Otherwise, they’d have to acknowledge that they’ve been suckered by a system as unwinnable as any three-card monte.
Allow me to quote my friend Dave McIntyre, who has said many nice things about me over the years: “Siegel doesn’t equate cheap with bad, like so many others do. He sniffs out inexpensive wines that are well made and provide exceptional value, and his passion is sharing them with the world.”
How can anyone object to that?
The answer may well be yes, according to study conducted by one of the leading wine economists in the country. New York University ?s Karl Storchmann wanted to find out if scores helped better align the price of wine; that is, do good scores boost prices while bad scores lower the price? Instead, Storchmann, Alexander Mitterling, and Aaron Lee discovered just the opposite.
The key is what Storchmann calls noise ? the publicity a good score gives a wine. ?The noise raises the quality perception of the wine, and the noise is larger for bad wine, ? he told me. In the study, cheap wine is defined as ?bad ? because it ?s less expensive than ?good ? wine, and better quality wine should cost more.
What happens, says the study, is that a high score for one cheap wine influences the perception of the entire brand, as well as for different vintages ? possibly raising the price of every wine in the brand. That means that if Winery X ?s 2011 merlot gets a 92, that score gives consumers the idea that the rest of X ?s wines, whether chardonnay or zinfandel or whether 2009 or 2010, are equally as good. Which isn ?t necessarily the case.
In a perfect world, all wines of the same quality would cost the same. That they don ?t is part of an economic theory called price dispersion, and applies to everything from computers to canned tuna. In this, reviews seem to play a significant role. Research in 2004 found that positive reviews in the New York Times increased a book ?s sales by almost two-thirds, while negative reviews cut sales by about one-third.
It would seem logical that this would carry over to wine, given how common scores and reviews are ? and how important they ?re supposed to be. Since we don’t know what a wine is like before we taste it, we rely on other people’s opinions to guide us, and ratings and scores come from the experts. So a 78, which is a bad score, should stop anyone from buying a wine. That’s the theory that Storchmann, the managing editor of the Journal of Wine Economics, was working with.
But, as regular visitors here know, wine is far from logical, and just the opposite seems to happen, says the study: “[The] largest spillover is in the low-quality bracket, resulting in significant overpricing of mediocre wines.”
Even more intriguing about the spillover effect: Assume a $6 wine gets a good score, which then allows the winery to raise the price by $2 for every wine in the brand — a 33 percent increase for what could be a dozen or more wines over several vintages. Compare that to a $100 wine getting a good score and raising the price $10. Who will come out ahead?
This explains a lot about the wine business that I ?ve never been able to understand, like why so many of the multi-nationals that make cheap wine care so much about scores. And market them so obsessively. Or why so many smaller wineries are equally obsessed with getting a good score. It ?s that damned spillover effect.
It also reinforces, once again, why scores are useless, and may well do more harm than good.
Having said all that, there is an important caveat. The wines and scores used in the study, some 41,000 of them for U.S. wine, appeared in the Wine Spectator between 1984 and 2008, so quality in the study is measured by the Spectator ratings. You can draw your own conclusions from that.