Attack of the Super-Cuvées

June 28, 2008 By Mike Veseth in critics, decanter, wine critics, wine markets, wine price, wine ratings 1 Comment

I’ve been thinking a lot recently about the different strategies winemakers use to sell their products and I find myself coming back again and again to a particularly good column by Andrew Jefford in the June 2008 issue of Decanter magazine. Jefford demonstrates how important economic factors are in shaping what gets poured into your glass.

Bordeaux, Burgundy and Super-Cuvée

Winemakers generally find themselves working with variable quantities and qualities of fruit and the individual wines made from that fruit. What should be done if some of the raw materials are much better than others as is typically the case? Blend them all together? That’s what happens sometimes, especially in the less sophisticated cooperatives in Southern Europe. The result is often a whole that does not exceed the sum of its parts. Historically, Jefford explains, there are two dominant approaches to the problem of wine quality to take into account variable wine quality.

The first is the Bordeaux strategy. The best lots are blended into the grand vin — the one that sells for a high price (in good years at least). Good wines that just don’t make the cut for the grand vin go into a second label. Lesser wines are sold off on the bulk market or even a third label. The system is transparent, relatively consumer friendly and the wines are as good as the vintage allows. In The Wine Advocate’s report on 2005 Bordeaux, for example, the grand vin Latour (96+ points, 12,000 cases) costs $1125 while the second wine Les Forts de Latour (92 points, 10,000 cases) is less than $200. A third wine, designated simply Paulliac (89 points) sells for about $60. Something for everyone, I guess, and a pretty clear hierarchy of wines, although not every Bordeaux producer listed in Parker’s guide displays such a clear link between price and apparent quality.

Burgundy provides a second model, according to Jefford. The top wines are released as individual vineyard-designated wines and the remaining wines are blended together in to an appellation-designated wine. I am not an expert on Burgundies, but I have seen this in Oregon, where some wineries release a one Willamette Valley Pinot Noir along with several vineyard designated wines. This makes the wines very interesting if you are able to taste them side-by-side, but it can otherwise be confusing. I think it shifts a bit of power to the wine critics and specialists. But that’s fine if the terroir really comes through and the wines are significantly different.

The third strategy, which Jefford links to the Rhône, is to create a tiny amount of a sort of super-wine that is made, more or less, to gain high scores from wine critics. I know that wine makers always say that they don’t make wines to get high scores, but a few have privately told me that big Parker numbers are so valuable that they don’t hesitate to make some wines to try to impress wine critics like RP. Most customers won’t have a chance to buy the Parker wine, it is true, because the production is so small, but the benefits to the winery’s reputation may extend down the line and boost prices and sales of the other wines.

Money, Taste and Power

“Let’s set aside the question of income,” Jefford writes, because he is concerned with the effect of the three systems on the quality of the wine. The Burgundy system, with its stress on terroir, makes sense when there really is terroir, but otherwise he argues in favor of the Bordeaux plan because it produces more complete wines, wines of good “disposition,” as he puts it. Wines that are good to drink.

The Super-Cuvée strategy, he fears, makes wines that are good to taste (and rate), but not to drink because they are wines of “accumulation,” monster wines, where winemakers seek high scores by adding more and more layers of identifiable attributes to the super-wine at the expense of the quality, complexity and completeness of the wines that make up the bulk of production.

On the face of it, Jefford’s critique of super-wines and the rising power of critics associated with them is based upon taste, but as the column continues it is quickly apparent that he cannot leave the wine economics out of it, because it is at the heart of the problem. The Bordeaux model doesn’t just make better wines, he suggests, but also better incomes in the long run for all producers. The simplicity of the single Grand vin strategy makes wines more understandable and a “perfect building block,” as he says for a reputation. He credits Bordeaux’s use of this system in part for their consistently strong reputation and ability to attract investment and maintain strong prices. He contrasts this with the “chaos and frenzy” of the Super-Cuvées and the “false intellectual challenge” of the many single-vineyard offerings. Pretty strong words, I would say.

The Burgundy and super-wine strategies depend in different ways on the power of wine critics (like some of those who write for Decanter). Wine critics validate the legitimacy of single-vineyard offerings and create super-markets for the Super-Cuvées. It would be interesting to study what factors lead winemakers, especially New World producers, to choose one approach over another. Perhaps it is terroir. Perhaps it is scale, training or philosophy. Or perhaps it is access to wine critics and the power they can have in the marketplace. Watch this space for more research on this interesting question.

Grubbing Up

May 6, 2008 By Mike Veseth in decanter, EU wine reforms, New Zealand, Supply and Demand 2 Comments

Grubbing up is one of my favorite wine economics terms. It means to pull the vines up by the roots and replace them with other agricultural crops. I It is a harsh term, just as it sounds, because it is the opposite of wine — it is anti-wine. Grubbing up isn’t something that a wine lover contemplates with ease, but sometimes it is necessary. The European Union’s Council of Ministers has recently finalized a grubbing up scheme for the EU and it is probably a good idea, even if it may not work.

Watering Down the Wine Lake

The problem is that EU wine production vastly exceeds demand with the result that thousands of liters of wine must be bought up by the EU each year and distilled into alcohol to prevent prices from dropping through the floor. The distillation price support only encourages continued production, waste and expense. It is a mess — a wine lake, as people say — and it has to stop.

A fairly radical plan was introduced a few years ago, one that would have paid farmers to grub up thousands of hectare of vines and introduced market reforms to allow (by deregulating) and to encourage (through supporting programs) European winegrowers to compete more effectively with New World winemakers who are taking their markets.

The package that the Council of Ministers agreed last week is significant even if it is less radical than the original initiative (Decanter magazine called it “watered-down” — never a good thing when you are talking about wine). The program called for subsidies to encourage winegrowers to eliminate up to 175,000 hectares of vines (versus 400,000 hectares in the original proposal), limit chaptalisation (the addition of sugar in the wine-making process) rather than eliminating it, and market-based reforms that encourage and enable winegrowers to compete on world makets (through varietal labeling of wines) rather than hide behind protective barriers.

I’ve been reading up on the details of the final EU plan and it is pretty interesting — the best analysis I’ve seen so far comes from the USDA Global Agriculture Information Network, which you can download in .pdf form at this California Wine Export Program website. The program includes money for grubbing up, of course, and deregulation of wine labels, removal of some vine planting restrictions (so marketable grape varieties can replace uneconomic grubbed up varietals), funds for wine promotion abroad, and so forth. Like any EU program, it is a complicated balance of economic reality, fiscal feasibility and political necessity.

The idea is to help the European wine industry transition to a new market environment, where export markets are growing, domestic markets shrinking and competition is fierce. It is not unreasonable to think that policies like this could work. They worked in New Zealand in the 1980s, for example.

Lessons from Kiwi Wine History

New Zealand today is famous as one of the great success stories in the world wine market. A small nation in an unlikely location, it punches above its weight in the global wine market, holding the title as champion exporter. Not in quantity, obviously, but in price. New Zealand has the highest average export price of any wine producing country.

But such was not the case 25 years ago. New Zealand suffered from a surplus of mediocre wine that could only be sold domestically behind high protective barriers. The industry collapsed with many failed firms from a combination of bad wine and surplus production. The government paid to grub up vines and then opened the market to international competition. Cheap but better wines from Australia flooded in to fill the domestic bulk wine market, leaving New Zealand producers only one choice — make better wine for export. They have done so brilliantly. Their success inspires the EU reforms.

It would be a mistake to think that what worked so well in New Zealand in the 1980s will work equally well in Europe today. It is unlikely that the EU would be willing to let its wine sector reach the sort of crisis that New Zealand experienced and that motivated the dramatic reforms implemented there. If big change comes from big crisis, as I believe (I wrote a book on this theme), then Europe is unlikely to see big change. The social cost of crisis is just too great. The guiding principle of EU policy is to prevent crisis, which makes change that much harder to effect.

Comparing New Zealand to Europe is problematic in other ways, too. New Zealand’s wine production is tiny — a drop in the bucket, really — whereas European producers account for well more than half of all the wine in the world. New Zealand’s grubbing up program may have been difficult, but only 1500 hectares were uprooted rather than the “watered-down” 175,000 set for the EU.

Changing the Rules of the Game

The principle of the EU wine reform scheme is sound, yet many reports that I have read are pessimistic. I think this is mainly because the final reforms are so much more timid that the initial proposal. But there are other reasons for concern.

One thing that economists have learned over the past 25 years is that institutions matter. This is another way of saying that economic forces do not always produce the same results. If the “rules of the game” are different the laws of economics will produce different results. Institutions are the rules of the game in life. Dani Rodrik, my favorite development economist, makes this point in his recent book One Economics, Many Recipes. The nature of local institutions, public and private, formal and informal, shapes the economic landscape in important ways.

This idea applies to the EU reforms in particular. Take the grubbing up scheme, for example. An incentive to repurpose large but unprofitable vineyards in Australia, for example, might well meet with an enthusiastic response because the institutions of wine growing there are different, with large vineyards and a consolidated industry. But European vineyards are much different and represent a completely different model.

Many vineyards (where much of the inferior surplus wine originates) are tiny inherited plots of a hectare or so, frequently on sites with few viable alternative uses. The rules of the game here are much different. A hectare might produce 20-30 tons if badly overcropped and, at perhaps $500 per ton at the local cooperative, gross revenues are too small for a family to live on but too great (compared to alternative uses) to give up. It’s an institutional trap that might be solved by consolidation, but making large vineyards out of these scattered small plots is necessarily costly and difficult.

Under these circumstances growers are likely to hang on to their vines for years rather than accept a modest one-time payment. Grubbing up might need to be forced, not voluntary, to have much effect.

New regulations to allow wines to be labeled according to grape variety (rather than the traditional local geographic designation) might be attractive to a large and distinctly commercial wine producer, but much wine in Europe is still produced by cooperatives that have little to distinguish their wines from others apart form the local designation. What advantage would they have as simple varietals in a world awash with good varietal wine?

A Certain Vision of Wine

It is possible to envision a future where the reforms can work, where the marginal vineyards have gone out of production, where consolidation has increased efficiency and where branded varietals can compete with the world market. (I have even seen some early attempts at EU branded varietals in the discount bins of a local store — more about this in a future posting.) I think it is possible that this vision may be realized — eventually.

But oh, it is such a big jump. The institituions of the small family vineyard and the local wine cooperative seem to me to make these reforms much more difficult. New Zealand’s success will be difficult to repeat.

What are wine enthusiasts looking for?

April 5, 2008 By Mike Veseth in brands, Constellation Brands, Costco, critics, decanter, Masters of Wine, wine critics, wine magazines, wine markets, wine research 8 Comments

The Search for Wine Drinker DNA

According to the data that WordPress collects about visitors to this website, the three most frequently viewed posts on The Wine Economist are

The World’s Best Wine Magazine?, an analysis of Decanter magazine, part of the ongoing series on wine critics and publications;
Costco and Global Wine , which examines Costco’s wine strategy in the context of the three most important global wine markets, the U.S., Great Britain and Germany, and
Masters of Wine (and Economics), which is about the prestigious Masters of Wine (MW) qualification and the importance of wine economics in its curriculum.

(Other popular posts include my discussions of global climate change, problems in Australia, rising wine prices, and the Hong Kong and Chinese markets.)

What can we learn from the fact that these three posts get the most hits? A closer examination of the WordPress data show that many visitors to this site are looking for information about the “Best” – the best wine, the best wine price, the best wine magazine and so forth. The search for the best and not just the good seems to be very important.

Wine enthusiasts also seem to be searching for credible authorities – people and publications that can guide them and tell them what to buy and drink.

Not unrelated to this is in the interest in Costco (and Trader Joe’s) and other retailers that seem to make the choice concerning good wine or good value wine a little simpler. Costco is now the largest wine retailer in the U.S., as the blog post explains, and it does this in an unexpected way – by giving consumers fewer choices than a typical upscale supermarket (about 120 different wines at typical Costco versus more than 1200 different wines at your supermarket), but also giving them more confidence in the choices that they make.

Project Genome

Visitors to The Wine Economist reflect many qualities that research by Constellations Brands (the largest wine company in the world) has uncovered. The study is called Project Genome, which suggests that it is an attempt to sequence wine drinker DNA. Wines and Vines reports that

The original 2005 study of 3,500 wine drinkers was one of the largest consumer research projects ever conducted by the wine industry. The new study examined the purchases of 10,000 premium-wine consumers–defined as those who purchased wine priced at $5 and higher–over an 18-month period. While the first Project Genome study asked online survey participants to recall their wine purchases during the last 30 days, the Home & Habits study tracked the actual purchases of Nielsen Co.’s Homescan® consumer purchase panel, which employs in-home bar code scanners and surveys to map consumer buying behavior across a demographically balance

Nielsen measured consumer attitudes and purchase behavior within multiple purchase channels, including warehouse clubs, supermarkets, mass merchandisers, drug stores, liquor stores and wine shops. The scan data were supplemented with online interviews to classify consumers by Project Genome consumer segments identified in Constellation’s original study: Enthusiasts, Image Seekers, Savvy Shoppers, Traditionalists, Satisfied Sippers and Overwhelmed.

The largest group of wine consumers are the Overwhelmed (23% of consumers). They are described as

Overwhelmed by sheer volume of choices on store shelves
Like to drink wine, but don’t know what kind to buy and may select by label
Looking for wine information in retail settings that’s easy to understand
Very open to advice, but frustrated when there is no one in the wine section to help
If information is confusing, they won’t buy anything at all.

The second largest group are Image Seekers (20% of consumers). They

View wine as a status symbol
Are just discovering wine and have a basic knowledge of it
Like to be the first to try a new wine, and are open to innovative packaging
Prefer Merlot as their No. 1 most-purchased variety; despite “Sideways,” Pinot Noir is not high on their list
Use the Internet as key information source, including checking restaurant wine lists before they dine out so they can research scores
Millennials and males often fall into this category.

Traditionalists (16% of consumers)

Enjoy wines from established wineries
Think wine makes an occasion more formal, and prefer entertaining friends and family at home to going out
Like to be offered a wide variety of well known national brands
Won’t often try new wine brands
Shop at retail locations that make it easy to find favorite brands.

The Savy Shoppers (16% of consumers)

Enjoy shopping for wine and discovering new varietal s on their own
Have a few favorite wines to supplement new discoveries
Shop in a variety of stores each week to find best deals, and like specials and discounts
Are heavy coupon users, and know what’s on sale before they walk into a store
Typically buy a glass of the house wine when dining out, due to the value.

Satisfied Sippers make up 14% of consumers. They

Don’t know much about wine, just know what they like to drink
Typically buy the same brand–usually domestic–and consider wine an everyday beverage
Don’t enjoy the wine-buying experience, so buy 1.5L bottles to have more wine on hand
Second-largest category of warehouse shoppers, buying 16% of their wine in club stores
Don’t worry about wine and food pairing
Don’t dine out often, but likely to order the house wine when they do.

And, finally, Wine Enthusiasts are the smallest group, accounting for just 12% of all wine buyers. They

Entertain at home with friends, and consider themselves knowledgeable about wine
Live in cosmopolitan centers, affluent suburban spreads or comfortable country settings
Like to browse the wine section, publications, and are influenced by wine ratings and reviews
47% buy wine in 1.5L size as “everyday wine” to supplement their “weekend wine”
98% buy wine over $6 per bottle, which accounts for 56% of what they buy on a volume basis.

The Fortune at the Bottom of the Pyramid

Not surprisingly, Wine Enthusiasts and Image Seekers account for nearly half of all wine sales while Overwhelmed consumers purchase disproportionately little wine. While wine magazines find a ready market at the top of the pyramid, retailers and wine companies probably view the Overwhlemed as the potential “fortune at the bottom of the pyramid.” There is a lot of money that can be made if wine can be simplified (or these consumers educated) so that they move up the wine buying ladder.

Visitors to The Wine Economists seem to fall into three of Constellation’s categories: Enthusiasts, Image Seekers and the Overwhelmed based upon the limited and superficial “most popular post” data reported here. It will be interesting to track further Project Genome results as they are released and to see how Constellation Brands uses this information in its wine market strategies.

The World’s Best Wine Magazine?

February 16, 2008 By Mike Veseth in British wine market, China wine, Constellation Brands, Costco, critics, decanter, globalization, Michael Broadbent, robert parker, Tesco 2 Comments

Decanter bills itself as “The World’s Best Wine Magazine” and is sometimes referred to as the bible of wine. It is probably the most influential wine magazine in the world, too, although that could be a contested claim. It is the most-read wine magazine in the world’s most important wine market: Great Britain. Founded in 1975, it is based in London and published monthly in more than 90 countries including, since 2005, China. The Chinese Decanter (click on the image to see the Chinese cover) includes about 30% special content for the growing East Asian market.

The Most Important Wine Market

How can Great Britain (and not the United States) be the world’s most important wine market? The simple answer is that the British produce little of their own wine and import quite a lot, so just about every winemaker in the world wants to compete for British sales. The German market is large, too, but it’s a cut-throat pricing environment with emphasis on discounted price. The American market is big, but it is tough for international winemakers to compete with American wines at most segments of the market (especially for popularly priced branded varietal wines).

A slightly more complex answer is that entry into the British market is relatively straightforward, because it is for all intents and purposes an integrated national market with one set of rules and distribution channels. The American market is a maze, with 50 (plus the District of Columbia) different sets of rules and regulations to understand and comply with plus the nightmarish “three-tier” distribution system (retail/wholesale/producer) that adds cost and increases the mark-up at each stage.

You want national distribution in the U.S.? Better hook up with one of the big brand managers such as Constellation Brands or Cobrands. And you’d better have a lot of product to sell. Otherwise you should settle for regional distribution and hope for the best. No wonder many international sellers focus on the British market or go there first.

Decanter is published by a company called IPC Inspire, which produces a number of lifestyle monthlies including Country Life, Horse & Hound, Rugby World, SuperBike, Shoot Monthly and Yachting World. It is Britain’s largest specialist magazine publisher.

Although Decanter really is arguably the most important wine magazine in the world, it is not as ubiquitous as Wine Spectator and Wine Enthusiast here in the United States. You won’t find it on many supermarket racks. Like Robert Parker’s Wine Advocate, it attracts a specialist audience in America.

Mrs. Thatcher and the Rise of the British Wine Market

Decanter was founded in 1975, just at the moment when the British wine market was becoming the world’s most important. Most American’s think of the British as a beer and spirits drinking nation, but this has not always been the case. The British preference for ales and whiskey was partly the result of a tax and regulatory regime that biased the system against consumption of imported wine. High tariffs made wine expensive and retail sales regulation made it inconvenient to purchase.

Britain’s entry into what is now the European Union resulted in tariff rates more favorable to wine imports. Mrs. Thatcher’s programs of retail industry deregulation opened up the opportunity for cheaper wine and more convenient distribution, especially though the supermarket chains. These supermarkets – Tesco, Sainsbury and Waitrose among them – became world’s most important wine distribution channels. The produce of the world’s vineyards are now sourced to these British stores and, having made an impact there, have passed into the global market. Costco, I have argued elsewhere, is beginning to play a similar role in the United States.

Ironically, U.S. wines are underrepresented on the British market. The U.S. and British distribution and marketing systems are so different as to represent a barrier to entry, at least for now.

Decanter was created to serve the consumer market created by the explosion of wine in Britain. As the global market has grown, Decanter’s distribution has followed (and sometimes, I suspect, leads the way).

If Decanter is so important, why doesn’t it have a stronger presence in the United States? The answer, I would argue, is that the British wine market is global and dominated in terms of volume by the large national supermarket chains selling wines from all over the world. The U.S. market is far more local (favoring American wines) with a far more fragmented distribution system and large firms like Gallo and Constellation Brands leading the way, selling branded wines from their large portfolios. Simply put, you won’t find a lot of the wines reviewed in Decanter in American stores. As vast as our selection is here in the U.S.A., it’s just a slice of what the global market offers. Really.

Uncorking Decanter

Decanter is a full service wine publication with something to offer almost any British wine enthusiast. There are interviews, topical essays and regional travel surveys (drink this, stay here, try this place for dinner). Columnists include such notables as Michael Broadbent, Steven Spurrier and Andrew Jefford. Decanter obviously includes wine investors among its readers because it contains very detailed monthly reports on wine auction sales prices. Bordeaux reds and the main focus (vintages dating back to 1961), but white Bordeaux, Burgundy and Port prices are also listed. It even publishes a wine auction index. This probably reflects Broadbent’s influence – he was for years head of the wine auction practice at Christie’s.

The monthly wine ratings are very interesting. Rather than try to sample a selection of all the new wines on offer each month as some American publications do (an impossible task in Britain, I reckon, with so many wines), one or two types of wines are chosen and about 100-150 wines from each of those segments of British market are tasted and rated.

The February 2008 issue, for example, has comparative ratings of just two types of wines, South Australian Shiraz and Loire (France) Reds (Cabernet Franc to Americans). Wines are first rating using a 20-point scale (with average scores from several tasters reported) and then grouped together into quality classes ranging from one to five stars. The five star (18.5 points or more) and four star wines (16.5-18.49 points) are listed along with photos of their bottles for easy identification in the shops. Three star wines get nice write-ups – this, after all, is where the real market is – and lesser wines are listed in appropriately grim tombstone format. It’s hard to imagine a Decanter reader buying a “fair” or “poor” wine except by accident.

How Decanter Rates Wine

I am impressed with the information provided for each wine. Besides the average 20-point rating, we learn the retail price, the degree of age-worthiness, receive brief tasting notes and find out where to buy it. Good value wines receive a gold £-sign designation. Thus, for example, the 2006 Shingleback Cellar Door McLaren Vale is rated at 14.75 points and sells for £7.99, which is a good value. Is has short term aging potential and can be purchased at Tesco. “Dark cassis jam notes. Medium body. Nice spicy notes. Fine velvet texture. Ripe and well-balanced fruit. 3-8 years.” Sounds good to me. Lots of useful consumer information here about these particular wines, although each monthly issue rates only a small slice of the British market.

The “stockist” listings are noteworthy. Wine Spectator will tell you what to buy, but not where to buy it. That would be nearly impossible in the U.S. The reason Decanter can tell you where to buy this wine is that the British wine system favors a relatively small number of national distributors and retailers, many of whom feature their own brands, much as Costco does here in the U.S. with the Kirkland label. The best value in the Shiraz tasting, for example. Was Berry’s Own Selection Elderton Australian Shiraz Barossa Valley 2006 (£8.50 and 16.5 points). “Big yet somehow seductive.” Berry isn’t a person, it is Berry Brothers & Rudd, a major British retailer.

Decanter wine critics are tough, by the way, stingy with the highest grades (the 4-5 star As and Bs) but generous in giving Cs that seem to really mean something.

Decanter and Global Wine
Decanter reflects the unique features of its main market, Great Britain, which makes me realize that this is probably true about all wine publications. Gambero Rosso has a strong regional focus because the Italian national wine market is less important there and regional identities matter more. U.S. magazines will be different because the U.S. market is so different.

Britain’s market is national in scale and global in reach so Decanter‘s strengths and weaknesses (particularly its inability to evaluate the majority of wines that are available) reflect this. I am not surprised that it would appeal to wine-drinking elites around the world, but it makes sense that it would not have a big market in the United States. The market is just too different over here.

Wine by the Numbers

February 9, 2008 By Mike Veseth in critics, decanter, Jancis Robinson, journal of wine economics, Michael Broadbent, robert parker, Uncategorized, wine critics, wine magazines, wine ratings 1 Comment

Rating the Wine Rating Systems

People turn to wine critics to tell them what’s really inside that expensive bottle (or that cheap one) and how various wines compare. Some critics are famous for their detailed wine tasting notes (Michael Broadbent comes to mind here) that provide comprehensive qualitative evaluation of wines, but with so many choices in today’s global market it is almost inevitable that quantitative rating scales would evolve. They simplify wine evaluation, which is what many consumers are looking for, but they have complicated matters, too, because there is no single accepted system to provide the rankings.

I’m interested in the variety of wine rating systems and scales that wine critics employ and the controversies that surround them. This blog entry is a intended to be a brief guide for the perplexed, an analysis of the practical and theoretical difficulties of making and using wine ranking systems.

Wine Rating Scales: 100-points, 20-points, Three Glasses and More

The first problem is that different wine critic publications use different techniques to evaluate wine and different rating scales to compare them. Click on this image to see a useful comparison of wine rating systems compiled by De Long Wine(click here to download the pdf version, which is easier to read).

Robert Parker’s Wine Advocate, the Wine Spectator and Wine Enthusiast all use a 100-point rating scale, although the qualitative meanings associated with the numbers are not exactly the same. It is perhaps not an accident that these are all American publications and that American wine readers are familiar with 100-point ratings from their high school and college classes.

In theory a 100-point system allows wine critics to be very precise in their relative ratings (a 85-point syrah really is better than an 84-point syrah) although in practice many consumers may not be able to appreciate the distinction. Significantly, it is not really a 100-point scale since 50 points is functionally the lowest grade and it is rare to see wines rated for scores lower than 70, so the scale is not really as precise as it might seem. ( Any professor or teacher will tell you, there has been both grade inflation and grade compression in recent years and this applies to wine critics too, I believe.)

The 100-point scale is far from universal. The enologists at the University of California at Davis use a 20-point rating scale, as does British wine critic Jancis Robinson and Decanter, the leading global wine magazine. The 20-point scale actually corresponds to how students are graded in French high schools and universities, so perhaps that says something about its origins.

The Davis 20-point scale gives up to 4 points for appearance, 6 points for smell, 8 points for taste and 2 for overall harmony, according to my copy of The Taste of Wine by Emile Peynaud. The Office International du Vin’s 20-point scale has different relative weights for wine qualities; it awards 4 points for appearance, 4 for smell and 12 for taste. Oz Clarke’s 20 point system assigns 2, 6 and 12 points for look, smell and taste. It’s easy to understand how the same wine can receive different scores when different critics used different criteria and different weights.

A 20-point scale (which is often really a 10-point scale) offers less precision in relative rankings, since only whole and half point ratings are available, but this may be appropriate depending upon how the ratings are to be used. Wines rated 85, 86 and 87 on a 100-point scale, for example, might all receive scores of about 16 on a 20 point scale. It’s up to you to decide if the finer evaluative grid provides useful information.

Decanter uses both a 20-point scale and as well as simple guide of zero to five stars to rate wines, where one star is “acceptable”, two is quite good, three is recommended, four is highly recommended and five is, well I suppose an American would say awesome, but the British are more reserved. Dorothy J. Gaiter and John Brecher (who write an influential wine column for the Wall Street Journal) also use a five point system; they rates wines from OK to Good, Very Good, Delicious and Delicious(!).

The five point system allows for less precision but it is still very useful – it is the system commonly used to rate hotels and resorts, for example. ViniD’Italia, the Italian wine guide published by Gambero Rosso, uses a three-glasses scale that will be familiar to European consumers who use the Michelin Guide’s three-star scale to rate restaurants.

Which System if Best?

It is natural to think that the best system is the one that provides the most information, so a 100-point scale must be best, but I’m not sure that’s true. Emile Peynaud makes the point that how you go about tasting and evaluating wine is different depending upon your purpose. Critical wine evaluation to uncover the flaws in wine (to advise a winemaker, for example) is different in his book from commercial tasting (as the basis for ordering wine for a restaurant or wine distributor or perhaps buying wine as an investment) which is different consumer tasting to see what you like.

Many will disagree, but it seems to me that the simple three or five stars/glasses/points systems are probably adequate for consumer tasting use while the 20- and 100-point scales are better suited for commercial purposes. I’m not sure that numbers or stars are useful at all for critical wine evaluation – for that you need Broadbent’s detailed qualitative notes. Wine critic publications often try to serve all three of these markets, which may explain why they use the most detailed systems or use a dual system like Decanter.

In any case, however, it seems to me that greater transparency would be useful. First, it is important that the criteria and weights are highlighted and not buried in footnotes. And I don’t see why a 20-point rating couldn’t be disaggregated like this: 15 (3/6/6) for a 20-point system that gives up to 4 points for appearance, 6 for smell and 10 for taste. That would tell me quickly how this wine differs from a 15 (4/3/8). Depending upon how much I value aroma in a wine and what type of wine it is, I might prefer the first “15” wine to the second.

Wine and Figure Skating?

So far I’ve focused on the practical problems associated with having different evaluation scales with different weights for different purposes, but there are even more serious difficulties in wine rating scales. In economics we learn that numerical measures are either cardinal or ordinal. Cardinal measures have constant units of measurment that can be compared and manipulated mathematically with ease. Weight (measured by a scale) and length (measured in feet or meters) are cardinal measures. Every kilogram or kilometer is the same.

Ordinal measures are different – they provide only a rank ordering. If I asked you to rate three wines from your most preferred to your least favorite, for example, that would be an ordinal ranking. You and I might agree about the order (rating wines A over C over B, for example), but we might disagree about how much better A was compared to C. I might think it was a little better, but for you the difference could be profound.

To use a familiar example from sports, they give the Olympic gold medal in the long jump based upon a cardinal measure of performance (length of jump) and they give the gold medal in figure skating based upon ordinal judges’ scores, which are relative not absolute measures of performance (in the U.S. they actually call the judges’ scores “ordinals”). Figure skating ratings are controversial for the same reason wine scores are.

So what kind of judgment do we make when we taste wine — do we evaluate against an absolute standard like in the long jump or a relative one like the figure skating judges? The answer is both, but in different proportions. An expert taster will have an exact idea of what a wine should be and can rate accordingly, but you and I might only be able to rank order different wines, since our abilities to make absolute judgements aren’t well developed.

This is one reason why multi-wine social blind tasting parties almost always produce unexpected winners or favorites. The wines we like better [relative] are not always the ones we like best [absolute] when evaluated on their own.

Ordinal and cardinal are just different, like apples and oranges (or Pinot Gris and Chardonnay). Imagine what the long jump would look like if ordinal “style points” were awarded? Imagine what figure skating would look like if the jumps and throws were rated by cardinal measures distance and hang time? No, it wouldn’t be a pretty sight.

Economists are taught that it is a mistake to treat ordinal rankings as if they are cardinal rankings, but that’s what I think we wine folks do sometimes. I’ve read than Jancis Robinson, who studied Mathematics at Oxford, isn’t entirely comfortable with numeric wine ratings. Perhaps it is because she appreciates this methodological difficulty.

Lessons of the Judgment of Paris

Or maybe she’s just smart. Smart enough to know that your 18-point wine may be my 14-pointer. It’s clear that people approach wine with different tastes, tasting skills, expectations and even different taste buds, so relative rankings by one person need not be shared by others. This is true of even professional tasters, as the Judgment of Paris made clear.

The Judgment of Paris (the topic of a great book by George M. Taber – see below – and two questionable forthcoming films) was a 1976 blind tasting of French versus American wines organized (in Paris, of course) by Steven Spurrier. It became famous because a panel of French wine experts found to their surprise that American wines were as good as or even better than prestigious wines from French.

A recent article by Dennis Lindley (professor emeritus at University College London – see below) casts doubt on this conclusion, however. Read the article for the full analysis, but for now just click on the image above to see the actual scores of the 11 judges. It doesn’t take much effort to see that these experts disagreed as much as they agreed about the quality of the wines they tasted. The 1971 Mayacamas Cabernet, for example, received scores as low as 3 and 5 on a 20-point scale along with ratings as high as 12, 13 and 14. It was simultaneous undrinkable (according to a famous sommelier) and pretty darn good (according to the owner of a famous wine property). If the experts don’t agree with each other, what is the chance that you will agree with them?

Does this mean that wine critics and their rating systems are useless and should disappear? Not likely. Wine ratings are useful to consumers, who face an enormous range of choices and desperately need information, even if it is practically problematic and theoretically suspect. Wine ratings are useful commercially, too. Winemakers need to find ways to reduce consumer uncertainty and therefore increase sales and wine ratings serve that purpose.

And then, of course, there is the wine critic industry itself, which knows that ratings sell magazines and drive advertising. Wine ratings are here to stay. We just need to understand them better and use them more effectively.

References:

Dennis V. Lindley, “Analysis of a Wine Tasting.” Journal of Wine Economics 1:1 (May 2006) 33-41.

George M. Taber, Judgment of Paris: California vs. France and the History 1976 Paris Tasting that Revolutionized Wine. Scribner, 2005.