It’s been a bit of a slow week in the world of wine news and rather than boring you with more updates on drought or the ongoing harvest season, I am going share something I wanted to for a while.
This has become all the more urgent when I read an article recently that somewhat criticised the value of academic research in the field of wine. It contains some valid points and I equally feel that more should be done to bridge the gap between academics and the business side of things, I did not agree regarding the value of research for the sector, but I have to admit that I might be slightly biased given my current occupation as a PhD student.
Anyway, as mentioned previously, I went to Portugal in late spring to give a presentation on the application of blockchain technology in the wine sector at the conference of the EuAWE.
I also heard many other very interesting presentations during the three-day event and am happy to report that recently the book of abstracts came out.
With each abstract covering somewhere between two and five pages you’ll have to cover a lot of ground. But do not despair!
Not only is it ordered by sections, so you can easily disregard those you might not care about (mind you, there are gems in each of them though). I have also gone through the audacious task of hand picking five you really ought to look at.
Just a word of warning though, as I don’t want to you to mistake this selection as a best of list. I think I could have easily picked several other articles (if not all) that would equally merit to among them but here is my selection:
- Wine closure types and their role among quality cues for Austrian red wines
Let’s start with the what is feeling like a century old dispute between supporters of screwcaps against cork and viceversa. Screw caps are on the rise and already accounted for 30% of wine sales globally. According to this and other research, contrary to the assumption that they are particularly preferred by New World wines, this type of wine closures is increasingly embraced by traditional wine producing territories such as France, Germany and Austria. This, the researchers from Burgedland University concluded, poses for Austrian winemakers some strategic issues: as alternative wine closures and thereof screw caps become more popular, at which pricing level would their usage be apt to best meet consumers’ expectations and what is the role of wine closure types amongst a set of other attributes to assess the quality of wine?
Analysing the results from more than 500 questionnaires, the main findings were three-fold:
First, results illustrate that price is the most important attribute to judge the quality of an Austrian red wine, followed by closure, grape variety, region of origin and vintage. In the run-up to the study, it was expected that Austrian end consumers would rate the grape variety as being more important than the closure when it comes to choosing an Austrian red wine. This hypothesis is confirmed; price and closure type are rated as clearly more important.
Second, it was assumed that consumers expect a natural cork for Austrian red wines with a high price, whereas they prefer a screw cap for Austrian red wines with a low price. This assumption is confirmed as well. Natural cork is preferred by 54.49% of the participants in all price segments. In second place is the screw cap (26.15%) followed by glass cork (14.57%) and synthetic cork (4.79%). For red wines, consumers are be willing to pay EUR 15 if closed with cork, whereas they are not willing to pay more than EUR 10 if closed with a screw cap. Consequently, Austrian red wines do have the potential to achieve even higher prices if they are equipped with cork closures. However, this does not hold true from the perspective of involvement: Thus, high wine knowledge does not automatically mean a preference for natural cork.
Third, the origin of a wine does not have an influence on the preference of a closure type. Furthermore, the vintage of a wine is also not decisive for the preferred type of wine closure. Only in the case of screw caps a slight, but not significant, preference for the younger vintage can be observed.
- In Vivino Veritas? An investigation on consumers’ quality perception and wine choice determinants in the digital age
Wine ratings have always been an important instrument to solve the difficult challenge of picking the right wine from an almost endless range of options. Nowadays, this puzzle is often tried to solve by the use of technology that has somewhat replaced the traditional critics. Vivino is one of the most known smartphone apps made for that purpose. If you haven’t tried it yet, it provides customers and community members with information and consumer feedback on practically any wine on the market. Users can photo-scan a wine and quickly learn wine characteristics, origin, average price, grape varietals and how much peers have liked it—thus reducing information asymmetry.
Researchers from the University of Viterbo looked into this matter and found that the perception of wine quality – measured through users’ ratings– appears to be strongly correlated to wine prices. In other words, a more costly wine, ceteris paribus, tends to be rated more favourably by consumers. They also found that popularity – measured by the number of wine reviews received by a single wine – is positively correlated to wine quality reviews. A more popular wine tends to be graded higher on the five-star marking system of Vivino. At the same time, they analysed the effect that places of origin and wine designations (i.e. protected designation of origin and protected geographical designation) have on quality scores. The outcome was that wine origin may influence the final score, but its effect differs widely depending on the wine region.
- The role of customer and expert ratings in a hedonic analysis of French red wines prices
Sticking with Vivino, here is another piece that examined its data as whether you like the app or not, you can’t argue with its significance if someone even decides to make a documentary about it. But seriously, researchers from different French universities looked at customer ratings and compared them with those of traditional critics since the role of experts has become central to the pricing of wines.
The question whether consumers’ ratings will come to dominate expert ratings in the wine expertise market. The authors wanted to test this hypothesis and looked at 37,960 entries in the Vivino database on French red wines with vintages from 2000 onwards. The estimation of a standard hedonic price equation including the average expert score and the average consumer rating shows that peers’ ratings have a larger effect on price than experts’ scores: a 1% increase in the average consumer rating would increase bottle price by around 9.5% other things being equal (including vintage, wine area and classification by ‘cru’) compared to 5.5% for an equivalent 1% increase in the average expert score.
These are only initial results but the general conclusion seems tob e that peers matter more than experts as far as price is concerned even when they exclude the top-end wines. They also conclude that consumer ratings do not appear to be affected by the price of the wine.
- Consumers willingness to pay for organic wine certification, halo effects and premium for biodiversity claims
Organic first and foremost should be chosen by producers who believe in the value of this procedure for cultivation and the preservation of nature. However, there often comes a price premium with bottles from organic production, so you could think of it as a strategic question from a business perspective, too.
Researchers from Bordeaux Sciences Agro looked at the question whether certifications for organic wine and such actually lead to a higher willingness to pay more for wine.
They found that such elements like an excellent Biodiv-Score increases the value of a wine by 12% of the entire population, and by 53% of the most demanding ones. This also creates a halo effects of organic certification Plus, the correlation between a Biodiv-Score and ist market impact is particularly strong when the wine is initially better valued from a sensory point of view, as if a ‘good wine’ was not forgiven for not being good in all aspects.
- Sustainable water use management for viticulture through precision agriculture technologies: An Italian case study .
And since we are currently experiencing a drought that effects almost half the continent, I have to pick this one. Water is becoming a critical issue for the viticulture sector, where generally water was not considered an essential input for quality and quantity. In Europe, irrigation of vineyards is below 10% of the total area, but the tendency towards irrigation is increasing to mitigate the effects of climate change and a more stressful environment.
This paper from researchers from the Università Politecnica delle Marche proposes, through the analysis of a case study (a winery located in the Marche in central Italy), to determine the economic impact of producing wine grapes under irrigation regimes. In details, a comparison of yields, costs, and economic indices (water productivity or WP and economic water productivity or EWP) was performed over two years. Thus, vineyards irrigated by supplemental irrigation in 2021 were compared with vines grown without irrigation in 2020. All the data were collected with a questionnaire and evapotranspiration, useful for the calculation of economic indices, derived from remote e and proximal sensors connected to the digital platform.
The results are a call for action in support of innovation: the study highlights that the estimation of water balance and water stress of vineyard based on precision technologies combined with the economic analysis and sustainable indices can provide support for winemakers to optimization and programming of the use of water. In addition, from the analysis emerged that the incidence of irrigation costs can have significant relevance, but rational irrigation interventions can justify the increase in costs with an improvement of quality and quantity of production as well as the maintenance of the optimal physiological state of the plant. So, eventually, it pays off.
And that’s it. As I said, there is plenty of other works that you should check out but for the purpose of this teaser I chose to pick these. Having said that, there is, of course, a sixth you should check out if you interested and that’s mine, but I didn’t feel would have been appropriate to be included.
I appreciate that some of the information is rather academic in style but I did not want to contort any of the work of my peers, and hope that this is still useful, since the information contained in their works as well as all the other participants certainly is. So, even if you have to read something twice and are still scratching your head, I still believe it worth the effort.
Yet, if you have any questions, feel free to get in touch with the authors, details should be included in the book. That naturally is true as well if you want to know more about mu piece. So, please do get in touch!
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