Friday, January 12, 2018

Medals in wine competitions allow wineries to make more money

A gold medal means more gold for the winery that wins it
Americans in the wine trade like to say that nobody cares about wine competition medals. In fact, some people do care, according to a study by two researchers from the University of Paris.

Bordeaux wine producers can successfully raise their prices by 13 percent after winning a medal, according to the study published by the American Association of Wine Economists. Gold medals are worth the most -- about 19% more than a non-medaled wine, according to the study. (PDF link here.)

But the impact is not the same for all competitions. The authors, Emmanuel Paroissien and Michael Visser, write:



When we allow the medal effect to differ across competitions, we find that only for a small group of contests there is a statistically significant effect. This group is made up of the most prestigious competitions that have been founded a long time ago. Interestingly, their judges are required to evaluate relatively few wines per day, and they grant medals by oral consensus. Next we have calculated the profit producers may expect to get from participating in these competitions. We find that that the incentives to participate in competitions is high.
Bordeaux may be a special case because it has sooooo many small wineries: more than 7,000. Nobody can keep track of them all. Moreover, they're all making the same thing -- Bordeaux blends! -- just different versions of it, which would seem to make medals an important quality distinction. I would like to see a study like this about a region or regions making a wide variety of wines.

That said, as we see more and more wineries around the world, the value of competition medals might increase, especially in a world where some people in the trade claim nobody pays attention to ratings anymore. Hmm, sounds like another study ...

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11 comments:

Bob Rossi said...

I do pay attention to medals, at times. There are certain competitions that I tend to attach more weight to. For example, the Concours General Agricole, and certain regional competitions in France. I don't think I'd attach too much weight to the competition represented by the medal in your post, although my feeling is often: Well, somebody clearly likes it.

Bob Henry said...

Walk into a mainstream grocery store chain and peruse the wine bottles on the shelf.

See any "shelf talkers" touting wine competition awards won?

Nope. They are forbidden as perceived visual clutter.

Walk into a BevMo store, and peruse the wine bottles on the shelf.

See any "shelf talkers" touting wine competition awards won?

(In the past, yes, when Wilfred Wong was the "taste maker" -- who was a perennial San Francisco Bay Area wine competition judge.)

Today, BevMo is gun shy about shelf talkers due to a class action lawsuit filed against them for "bait-and-switch."

See: https://scottglovsky.com/blog/new-class-action-liang-v-bevmo/

I suspect that Total Wine stores are equally reluctant to post shelf talkers.

Walk into a Whole Foods Markets store and peruse the wine bottles on the shelf.

See any "shelf talkers" touting wine competition awards won?

Nope. They create their own occasional talkers, based on a specific 90 points and above review.

Walk into an independent fine wine store and peruse the wine bottles on the shelf.

See any "shelf talkers" touting wine competition awards won?

Nope. They post printed shelf talkers touting Wine Advocate and Wine Spectator reviews, supplied by the wineries and their distributors.

So how are consumers learning about wine competition awards, if there are no weekly newspaper wine columns citing their results, and no retail stores promoting their results?

This is akin to the sound of one hand clapping . . .

Bob Henry said...

The Los Angeles County Fair has been the host of the Los Angeles International Wine Competition for decades.

Last year 3,001 wines from 999 wineries were submitted for judging.

There were a total of 177 Best of Class Awards, 661 Gold Medal Awards, 1,248 Silver Medal Awards and 670 Bronze Medal Awards.

Did any of this news make the Los Angeles Times "Saturday" food and wine section?

Not that I'm aware of.

Their active coverage of the Fair's judging results disappeared with the suspension of wine columns by Robert Lawrence Balzer and Dan Berger.

Most Angelenos who are wine enthusiasts are unaware that the Fair runs a low cost winetasting bar on the grounds, serving every Gold Medal-awarded wine.

Bob Rossi said...

I'll agree with most of what you said, except for the independent wine stores part. The best of those don't post such shelf talkers, or any shelf talkers at all.
As to medals, I agree that shops generally don't post shelf talkers about that, but the medals do appear as stickers on the bottles. That's one of the things I pay attention to, although I take them with a grain (or 3) of salt.

Bob Henry said...

Bob R:

Out here in Los Angeles, when I walk into a grocery store or a wine chain store (e.g., BevMo or Total Wine) or a fine wine store, I don't see bottles affixed with wine competition medal stickers.

Maybe medal awards have more sway outside of California?

~~~ Bob

Bob Henry said...

As cited last year in one of Blake's blog pieces: Wine Opinions survey on what influences wine purchases,

Exhibit:

https://1.bp.blogspot.com/-ZgHHdvhpGvg/WJvNd5wYcyI/AAAAAAAAGvU/87oXLHPBmSwICHyxOyp6dafu0EJAlReAQCEw/s1600/influences.tiff

No mention of wine competition medal awards.

Bob Henry said...

I have cited this research before, and do so again now.

A high percentage of consumers have no firm idea what brand and specific bottling wish to buy when they walk into a grocery store to buy alcoholic beverages.

Excerpt from MediaPost
(December 8, 2016):

“40% Of Alcohol Beverage Buyers Make Their Decisions In-Store”

Link: http://www.mediapost.com/publications/article/290633/40-of-alcohol-beverage-buyers-make-their-decision.html?edition=98740


“Fully 40% of U.S. consumers who buy alcoholic beverages haven’t decided what they’re going to purchase when they walk into the store, according to a new study from IRI.

“Of the 60% who do have a planned beverage purchase, 21% end up changing their minds in store, and 50% of those who change their minds ultimately buy a different brand than they originally intended.

. . .

“All of which points to ‘immense’ opportunities for alcohol manufacturers to find new pockets of growth by engaging and influencing consumers while they’re in the store, point out IRI’s analysts.

“Beer, wine and spirits manufacturers are increasingly aware of the importance of working with retailers to win over consumers, according to Robert I. Tomei, president of consumer and shopper marketing for IRI. ‘When you consider how often most shoppers are going to the store, and that 21% of them change their minds during the shopping trip, you realize the impact that in-store signage, creative labeling and other marketing could have on your portfolio,’ he stresses.”

Bob Rossi said...

Bob, I was thinking of European, primarily French, wine competition medals. Although I rarely drink California wine, I don't recall seeing medals from California wine competitions on bottles on store shelves. I'm not sure why that is, since I assume there are plenty of California competitions.

Rebecca Yeamans-Irwin said...

There was a study published last year (from a NZ group) that also highlighted the influence of medals on wine labels: http://www.academicwino.com/2017/04/wine-awards-purchase-behavior.html/

"This study suggests that while there is skepticism over putting wine awards on a bottle, everybody uses them in some way to make a decision in the wine purchasing process. However, exactly how these awards are used to influence their wine purchase decisions differ depending upon an individual’s experience with wine.

The more experienced the consumer, the more likely they are to consider only the most prestigious wine awards, and ignore all other awards. All consumers tended to think that anything less than gold was suspicious, and that a silver or bronze medal doesn’t provide any useful information regarding the quality of the wine in that bottle."

Cheers!

-Becca

W. Blake Gray said...

Thank you Becca, that study is worth noting.

I know I'm not the normal consumer, but when I see a bronze medal (not silver) I tend to think less of the wine. I judge at some competitions where a bronze denotes a wine of some merit, but if I were a winery, I would keep those bronzes in an office and not put them on the label.

Rebecca Yeamans-Irwin said...

Pretty much everyone gets a bronze for just showing up :)