Friday, December 17, 2010

Buying the label

The most recent Freakanomics Radio podcast, available on the New York Times website, poses the interesting question: "Do More Expensive Wines Taste Better?" It's worth listening to the entire story, but in a nutshell, the answer seems to be: yes, but only if you know they're expensive. When people know the price, they overwhelmingly prefer more expensive wines. But in blind taste tests, cheap wines actually do slightly better than pricey vintages. And that holds true across all groups of people, from wine-club newbies to highly trained sommeliers.

Now, I'm not a wine drinker, so I can't comment on this story from personal experience. But I have seen similar studies that highlight the same phenomenon for other products. For example, as I observed back in September, tap water is just as good, objectively speaking, as bottled water—it's just as clean, if not cleaner, and it does as well or better in blind taste tests. Yet bottled water drinkers consistently claim that bottled water in general, and their brand in particular, tastes better than tap water. In an episode of "Penn and Teller: Bullshit!" (which you can see here on YouTube) patrons in a fancy L.A. restaurant discourse at length about the differences in taste among bottled waters, even though each made-up brand is really the same L.A. tap water in a different bottle. (Amusingly, one of the varieties is called "L'Eau Du Robinet"—French for "tap water." You'd think at least a few of those highbrow diners would have been tipped off by that.) Also, Vance Packard reported sixty years ago in The Hidden Persuaders that most cigarette smokers are loyal to a specific brand, yet the majority of them can't correctly identify their own brand in a blind taste test.

And when you think about it, this same kind of misplaced brand loyalty really applies to all kinds of products, not just the ones you can taste. The Mercedes first became a status car because old-money types chose it for its reliability (eschewing the flashier models that were status cars at the time). But the Mercedes models of today no longer have a particularly good reliability record, yet people continue to buy them just for the name. And I've already mentioned how little premium in you get in terms of style or quality by buying designer clothes.

So what's the moral of this story? Well, there are probably all sorts of conclusions you could draw from it about social class, how expectations influence experience, the nature of brand loyalty, and the dangers of putting too much faith in of so-called experts. But for me, the most useful lesson for us ecofrugal folks is: the best snobbery is inverted snobbery. It's a lot cheaper than the other kind, and just as much fun. So if you're a wine fancier, I urge you to go pick up one of the best cheap wines and serve it at your next party. Depending on your inclinations, you could put it in a decanter and wait to surprise your guests with the name, or openly flaunt the cheap bottle (or box) and chat about how remarkable it is what a great wine 12 bucks will buy. "I just don't understand why some people pay hundreds of dollars for a bottle of wine," you can muse as make the rounds with the bottle, dressed in your best thrift-shop togs. "I mean, it's really just the label they're buying, isn't it? People who really appreciate wine only care about the taste."

11 comments:

  1. Well, not exactly. You said yourself that people tend to prefer the more expensive wine if they know that it is more expensive. So if you serve the cheap wine in the original bottle, people will not like it. You have to serve it in an unlabeled container. Or, better, transfer it into a bottle of very expensive wine!

    Twinerik

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  2. Hmm. I guess this is one more reason why lying can be a good policy. My friend Tree (for those of you who know her) would be ashamed of the universe.

    Twinerik

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  3. Ah, but that's just the point. Instead of giving in to the assumption than an expensive wine *must* taste better, you're deliberately countering it, forcing your guests to think about the flavor and not the label.

    Of course, if you were feeling puckish, you could disguise the wine and let your guests assume it's a more expensive vintage. Then you could see how that assumption affects their reaction to it, only letting them in on the joke at the end. But you're more likely to piss them off that way, as Steven Levitt of Freakanomics discovered when he tried it on the Harvard Society of Fellows.

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  4. P.S.: If you do it the second way, you make your guests feel dumb, because you've tricked them into accepting a cheap wine as an expensive one. But if you do it the first way and serve the cheap wine openly, you make your guests feel smart by putting them in the category of "people who *really* care about wine" and judge the flavor rather than the label. So you see, honesty really is the best policy.

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  5. The Las Rocas that the review site links to is nice. The problem is that it is nicer than a lot of other 11$ wines. (My price point is around 10-12$ though I like to try under 10$ and can be influenced to pushing 20$) I haven't hard the Yellow Tail, so I can't comment there. One of the things you are supposedly getting in buying a higher than basement price wine is an increased chance that it is good. Since there are bad wines out there -- though I suppose that is subjective -- signaling has at least some value.

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    I tend to think there is a bit of "overshoot" in that type of study. Basically, if the freakenomics people found that pricy wine was judged better, it wouldn't be news and you wouldn't have read it. I'm not saying they are misleading, just that no news is not news.


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    Different wines do taste different, so there is an amount of subjectivity. If you really don't care -- you are looking for something pleasant, social and with a bit of alcohol -- I certainly wouldn't spend much. (I'm generally in that category.) I know that there are people out there who can detect more subtle scents and flavors than I can. So maybe for them some of the higher priced wines are worth it? I can't really say.


    All of which is basically saying I don't believe in a race to the bottom. Everclear and cool-aide is not wine. Millar Lite is not beer. Nescafe and hot tap water is not coffee. A pop-tart is not pastry. All will do the trick is what you want is alcohol, caffeine or calories, but the better label versions are better.

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  6. Interesting. Your timezone seems to have moved west.

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  7. "I know that there are people out there who can detect more subtle scents and flavors than I can. So maybe for them some of the higher priced wines are worth it? I can't really say."

    Perhaps, but when Steven Levitt tried the trick on the Harvard Society of Fellows—all folks who claimed to be connoisseurs—they not only couldn't tell the expensive wine from the cheap wine, they couldn't recognize the same wine when it was served to them in two different decanters. So it does seem like for most people, even those who think they know a lot about wine, there's no point in paying more for an expensive wine when there are plenty of decent inexpensive wines out there. I'm not saying you should just buy the cheapest wine you can find—just that a good wine and an expensive wine are not the same thing.

    "Interesting. Your timezone seems to have moved west."

    I *think* I've fixed that...

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  8. I'm not really disagreeing with the study, just the conclusion.

    I don't doubt that many people -- including many people who consider themselves connoisseurs -- can't distinguish different wines in a blind test.

    I am saying that I think I can distinguish differences in some products (including wine) at some times, e.g. Nescafe and good coffee. So then the question is -- like so many other things -- picking your place on the price-quality scale and finding the good-cheap stuff.

    I totally agree that most people buying pricey wines (and many pricey cars) are doing it for the status aspects. For them, trickery with labels is probably not worth it because the loss of status is too much if exposed.

    Of course, it could suggest a strategy by the winery of focusing on exclusivity, marketing and image at the expense of actually making exceptional wine. :)

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  9. "I'm not really disagreeing with the study, just the conclusion."

    Well, the study's conclusion, so far as I can tell, was simply "In blind taste tests, expensive wines don't taste better than cheap wines, on average." My own conclusion was, "If you like wine, choose your wines based solely on taste and ignore the label."

    "So then the question is -- like so many other things -- picking your place on the price-quality scale and finding the good-cheap stuff."

    My point is simply that the price-quality scale isn't linear. It isn't a simple trade-off between cost and taste, because in many cases the lower-priced wine actually tastes better. So the question isn't "How much are you willing to spend for a better-tasting wine?"; it's "How little can you spend and still get a wine that tastes great?"

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  10. I didn't listen to the Freakonomics podcast, but I think that the general conclusion from most of these wine-tasting studies is that wine connoisseurs can identify the more expensive wines as better. But the rest of us (and I guess that includes the Harvard Fellows) can't. This inability may be fairly recent -- not because ordinary folk have lost their powers of taste but because cheap wines have gotten a lot better in the last 30-40 years. On the Freakonomics blog, Dubner relates the anecdote about Raymond Oliver taking a sip of California wine and thinking it French. The conclusion to draw is not that Oliver (and by implication all French restaurateurs) are phonies, but that California vintners (probably with a lot of help from UC ag departments) had figured out how to make good wines.

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  11. "The conclusion to draw is not that Oliver (and by implication all French restaurateurs) are phonies, but that California vintners...had figured out how to make good wines."

    Probably true, but it does sort of imply that Oliver and his colleagues didn't get the memo (that is, they haven't adjusted their expectations of domestic wine to reflect its vastly improved quality). And it also implies that if today's California wines are good enough for Oliver and co., they certainly ought to be good enough for the average casual wine drinker.

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