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Saving “Value” from the Scrap Heap of Meaningless, Bastardized Words

In the realm of words that are in danger of becoming utterly meaningless, “value” is right up there next to “strategize” and “authentic.”

Every year it seems more and more words take on a subjugated role in our daily lexicon and in the process they get used with mixed meaning to the point where the word loses all relevance as an individual contributor in the English language.

That said, the word “value” in wine is on the cusp of becoming utterly meaningless.

While true, I do feel like I’m doing a Jerry Seinfeld stand-up routine, all rhetorical questions:  What does “value” even mean?

And, whose “value” is it?

Is it intrinsic value?

Is it real value?

Is it perceived value?

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And, by what criteria is this “value” conveyed?

What is the “value equation?”

No comedy routine, trying to make sense of this value equation is The Wine Blue Book.

In doing so, they use the notion of Quality-to-Price Ratio – a value indicator that is seldom seen outside the wine world – the notion of a baselined, good bottle of wine at a lower price than its peers.

Using Quality-to-Price Ratio (QPR) based on an aggregation of wine points ratings, The Wine Blue Book is essentially a peer review process based on price and based on major critic scores.

Thus, if a Napa Cab scores 95 points and costs $30, it would have an off the charts positive QPR as measured against other Napa Cabs that may score less and likely cost more—thus representing good value.

I wrote about The Wine Blue Book a little over two years ago when they had a name changeover in a branding exercise—you can read my previous post here.

With the current mania (née focus) on “value” this and “value” that in the wine world, I caught up with Neil to see how business is going.

In that conversation (excerpted), Neil raises several interesting points:

Good Grape: Do you have any thoughts on this “value” push in wine?  Do you think that the term “value” is bastardized with no true meaning?  What’s your definition of wine value?

Neil / The Wine Blue Book: Value isn’t just an inexpensive wine.  Value is when the wine is the same or better quality and costs much less than average.  The 2008 Chateau Pontet-Canet Bordeaux from Pauillac region costs $80 but it received an average score of 95 points.  Well the average price for a 95 rated Bordeaux is $245, so $80 is 33% of that cost… a “value” in my book.  You can buy a bottle of 2006 Chateau Margaux for $537 but it only received 94 points.  I would rather pass on the 06 Margaux and buy a six pack of Pontet-Canet for $480.

For the numbers aspect of defining value, if the price of the wine is 25% below the average cost of a similar scoring wine then we call it a “value”.  At 50% or below it is a “Great Value” and 75% or below it is an “Outstanding Value”.  In the June 2009 issue we had five “Outstanding Value” wines, 91 “Great Values” and 230 “Value” wines out of the 1,197 wines that were included in the issue.

Good Grape: Have you seen an uptick in your business over the last few months with people wanting to be savvier with their wine spending dollars?

Neil / The Wine Blue Book: Yes, we have seen an uptick in new subscribers; I think the excessive spending mentality is frowned upon because of the economy.  Spending money wisely is now “in fashion.”

Good Grape: Since you and I last talked, have you seen an increase in the use of points as a scoring mechanism?

Neil / The Wine Blue Book: Yes.  Some folks continue to dismiss the 100 point system but they choose a 10 point system and then score wines 8.9 or 9.6 which just translates to an 89 and 96.  The 20 point system is the same but just 20% of the 100 points.

The folks who dismiss the system advocate “trust your retailer” but since a retailer’s income is dependent on the wine the consumer purchases, I would rather trust the scores the critics provide since their income isn’t dependent on the consumers purchase.

Good Grape:  Do you have any growth plans for the business that you can share?

Neil / The Wine Blue Book: Based on our subscriber survey and non-renewal survey we conducted earlier this year, we confirmed some of our current policies:

- 86% want us to continue with our policy of only listing wines that have been scored by two or more sources.
- 71% indicate the price we show is “accurate”.

We are working on adding another varietal within the next two months to bring the total to 19 varietals tracked. 

We now include Outstanding and Great Value wines, by varietal, from the past 12 months, in each issue.  This allows subscribers to walk into a wine shop with a list of great values by varietal.

Good Grape:  Thanks, Neil

No doubt, the notion of value and all of its subjective meaning creates a flashpoint in the wine world, particularly when combined with the equally contentious use of wine scores.

However, points aren’t going away, critics aren’t leaving the wine scene and a truly valuable aggregator of these scores provides a meaningful service to those that want to spend their wine money in a way that is more reliable and less crap shoot. 

For $25 bucks a year and a QPR rating on thousands of wines, it seems to me that Neil and The Wine Blue Book are providing consumers a tremendous service and, yes, value.

Photo credit:  B2B Knowledge Sharing

 



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Posted in, Free Run: Field Notes From a Wine Life. Permalink | Comments (5) |


Comments

On 06/29, .(JavaScript must be enabled to view this email address) wrote:

Interesting discussion about QPR. I had a momentary epiphany when reading the answer that Neil gave regarding points-based ratings.

He says:

The folks who dismiss the system advocate “trust your retailer” but since a retailer’s income is dependent on the wine the consumer purchases, I would rather trust the scores the critics provide since their income isn’t dependent on the consumers purchase.

But doesn’t it also follow that the retailer is much more accountable when they sell a wine based on their customer’s trust. If you buy a wine that a critic loved but tasted poorly, what is your recourse? Critics are completely unaccountable for their opinions and are therefore much less trustworthy because their livelihoods specifically do not ride on the accuracy of their ratings.

But I guess it would be hard to attach a value to something as ephmeral as “trust your retailer” to divide a wines price by so that it probably works better for QPR to use even suspect points ratings because they are comparable and quantifiable.

On 07/01, Dylan wrote:

Another personal favorite is “break through the clutter,” while the sentiment remains true the phrase is dog-eared beyond recognition. Ironically, it adds to the clutter by saying that now. Don’t get me started on “unique.”

As for the fleeting definition of value, it’s still around as much as people toss the term without much thought. Value will always be that feeling of exceeding expectation. In this model the expectation is price, and the quality will take you from there.

On 12/27, Gain Six Pack Abs Fast wrote:

Another personal favorite is “break through the clutter,” while the sentiment remains true the phrase is dog-eared beyond recognition. Ironically, it adds to the clutter by saying that now. Don’t get me started on “unique.”
  I agree with that, and must say that the older the wine the greater the price.

On 12/27, Home making money | Work at home jobs wrote:

Good post’s guys, i have pure Serbian wine since 1991 and i can say that’s taste very sweet smile

On 01/18, income tax software wrote:

Can I transfer income related to the business that i personally received before starting the LLC into the LLC so that the business would be taxed on it, and it would not be applicable towards my personal tax?
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