Is expensive wine worth the price?

When talking about wine, my friends often wonder out loud if expensive wines are really better than cheap wines. Steve Levitt, co-author of the Freakonomics series, has talked about this several times, and I love retelling his findings. Given that this blog has covered a number of pricing topics, let’s discuss this one, too.

Levitt wrote about his time in Harvard University’s Society of Fellows:

On Tuesday afternoons we had wine tastings. I asked if I could be allowed the opportunity to conduct one of these wine tastings “blind” to see what we could learn from sampling wines without first knowing what we were drinking. Everyone thought this was a great idea. So with the help of the wine steward I selected two expensive bottles from the wine cellar and then I went down the street to the liquor store and bought the cheapest bottle of wine they had made from the same type of grape.
I thus had two different expensive wines and one cheap one. I tried to make things more interesting by splitting one of the expensive bottles into two different decanters. Thus, in total the wine tasters had four wines to taste, although in reality there were only three different wines, with one sampled twice by each taster. I gave them a rating sheet and each person rated each of the four wines.
The results could not have been better for me. There was no significant difference in the rating across the four wines; the cheap wine did just as well as the expensive ones. Even more remarkable, for a given drinker, there was more variation in the rankings they gave to the two samples drawn from the same bottle than there was between any other two samples. Not only did they like the cheap wine as much as the expensive one, they were not even internally consistent in their assessments.
Photo by Brandy Turner on Unsplash

The reaction to the results wasn’t positive: “There was a lot of anger when I revealed the results, especially the fact that I had included the same wine twice.”

Even more cunning was an experiment conducted at the California State Fair’s wine competition. They poured the same wine into three glasses and had a panel of trained, professional judges rate them as if they were entirely different offerings. The results were similar to those of Levitt’s experiment.

As described in The Guardian, “[A] typical judge’s scores varied by plus or minus four points over the three blind tastings. A wine deemed to be a good 90 would be rated as an acceptable 86 by the same judge minutes later and then an excellent 94.” Only about 10% of judges were consistent across their ratings.

It’s notable because “a few points … is enough to swing a contest — and gold medals are worth a significant amount in extra sales for wineries.”

One study showed that lay wine drinkers had a slightly negative correlation between price and rating. Another study showed that the ability to detect expensive wine occurs at about the same rate as correctly predicting a coin flip — which is to say, about the same as guessing.

What does this mean for your own personal wine habits? You should feel OK about enjoying affordable bottles (or boxes) if you like how they taste. If buying an expensive wine makes you feel good, then that works, too. Or you might want to decant your affordable wine into an expensive-looking bottle to make it feel fancier.

Last, it can be important to send the right signal when giving wine as a gift. You can follow Levitt’s selection technique, as he described on Marketplace: “I go in the store, and I look for the label that looks the most expensive of anything in the store. And I make sure it costs less than $15, and if it does, then I buy it.”


Originally published at shelftalk.net, where you can also read past articles. Sign up to receive updates at http://eepurl.com/cg1gkP.


Scott Sanders works with food & CPG clients on strategic topics including price, promotion, assortment, branding, and more.