Wine Prices Research Articles

Market segments and pricing of fine wines over their lifecycle

Is the fine wine market segmented? The literature shows that this is the case for ordinary wines, and this has significant implications for hedonic analysis. We apply a finite mixture model to a 20-year dataset of auction prices. Our results reveal the existence of five segments in the fine wine market that differ in both their composition and the effects of scores, age, and market conditions on prices. This segmentation helps reconcile the divergent findings in existing research: some wines are highly sensitive to market conditions and have yielded significant returns (investment wines), while prices of other wines are primarily influenced by age (collectible wines) or quality (drinking wines). Our findings enhance the understanding of fine wine pricing and offer new insights into the age-price relationship, which is generally linear but varies by segment and vintage quality.

Commercial, Cultural and Social Aspects of Related to the Winegrowing Sector

Objective: The objective of this review study is to investigate the trends and preferences of wine consumers globally, evaluating social and cultural aspects, marketing strategies, sensory perceptions, in addition to studying pricing and marketing linked to winemaking. Theoretical Framework: To understand the aspects of the desired objectives, research was carried out in several academic works addressing the aforementioned themes that, for better organization and understanding, were divided into three interrelated categories: consumer behavior, multisensory perception and wine pricing. Method: The methodology adopted for this research comprises the literature revision from 1995 to 2024, taking into account the key words wine princing, wine consumers, willingness to pay, wine attributes, wine quality, sensory drivers. Results and Discussion: By evaluating publications from various geographic regions and synthesizing them, it was possible to understand the regional nuances and particularities and the weight they present in the global winemaking framework. Consumer behavior is seen as being a consequence of social and cultural aspects, influenced by sensory perceptions, price, brand and expertise, among others. The studies evaluated indicate that multisensory perception is related to sensory stimuli and the way they interact, enabling a sensorial experience for the consumer, adding up to another important parameter influencing the consumer in their choices. Regarding the issue of wine pricing, studies point to conceivable factors such as vintage, origin, bottle design, quality assessments by experts, being factors that impact wine pricing. Research Implications: The practical and theoretical implications of this research are discussed, providing insights into how the results can be applied or influence practices in the field of wine sector. These implications could encompass the main sensorial attributes that drives the wine pricing. Originality/Value: This study contributes to the literature by bringing the main aspects related to willing to pay for wines. The relevance and value of this research are evidenced by anthropological and psico social. This study brings a synthesis of several academic studies related to winemaking and its social and cultural aspects, covering consumer behavior, sensory perceptions and wine pricing, perceptions that guide the production chain and consumers from experts to beginners in order to expand the knowledge of all aspects involving winemaking.

Verseny és előny – A Decanter World Wine Awards magyar vonatkozású eredményei és azok összefüggése a borok árával

This study examines the relationship between Hungarian wine prices and the results of the 2023 Decanter World Wine Awards (DWWA). The study analyses the relationship between the DWWA and the prices of medal-winning Hungarian wines and the impact on the Hungarian wine sector. An analysis of the correlation between the Decanter World Wine Awards and Hungarian wines shows the price-shaping effect of wine competitions on the Hungarian and international wine market. By taking advantage of the recognition and credibility provided by the DWWA, Hungarian winemakers have the opportunity to position their wines in higher market segments, serving discerning consumers seeking premium and award-winning wines. Three regions seem to be best suited for this: Tokaj, Eger and South Pannonia (Villany and Szekszard). The winning wines will contribute to the economic viability and sustainability of the Hungarian wine industry, providing access to new sales channels, international recognition and promoting the unique and diverse Hungarian terroir. The medals achieved in this prestigious competition will facilitate market entry in competitive markets and foster cooperation with distributors and importers seeking quality-driven wine portfolios. Continued investment in quality development, sustainability practices and market diversification will be essential for Hungarian winemakers to capitalise on the success of the competition for long-term growth. In the future, the authors aim to conduct a study of the results of several years of competition, incorporating new perspectives.JEL Codes: E2, E3, F1, M2, M3

Finding the Wise and the Wisdom in a Crowd: Estimating Underlying Qualities of Reviewers and Items

Abstract Consumers, businesses and organisations rely on others’ ratings of items when making choices. However, individual reviewers vary in their accuracy and some are biased—either systematically over- or under-rating items relative to others’ tastes, or even deliberately distorting a rating. We describe how to process ratings by a group of reviewers over a set of items and evaluate the individual reviewers’ accuracies and biases, in a way that yields unbiased and consistent estimates of the items’ true qualities. We provide Monte Carlo simulations that showcase the added value of our technique even with small data sets, and we show that this improvement increases as the number of items increases. Revisiting the famous 1976 wine tasting that compared Californian and Bordeaux wines, accounting for the substantial variation in reviewers’ biases and accuracies results in a ranking that differs from the original average rating. We also illustrate the power of this methodology with an application to more than 45,000 ratings of ‘en primeur’ Bordeaux fine wines by expert critics. Those data show that our estimated wine qualities significantly predict prices when controlling for prominent experts’ ratings and numerous fixed effects. We also find that the elasticity of a wine price in an expert’s ratings increases with that expert’s accuracy.

How do wineries price their wine experiences?

PurposeThis paper aims to model the price of cellar tours using a hedonic pricing approach. The authors analyze the complex relationship between the price of an add-on (here, cellar tours) and the price of the reference product (here, wine).Design/methodology/approachThanks to a large database containing information on about 1,000 winery experiences, the authors regress the price of cellar tours on wine prices and on a broad set of objective characteristics that are (1) tour specific and (2) common to all tours offered by the winery. These exogenous controls include the type and style of experience offered, amenities and winemaking characteristics.FindingsThe authors show that the price of cellar tours follows the price of the most expensive wine sold by the winery, which is a proxy for reputation. The authors find that one of the main determinants of cellar tour prices is visit length: wineries charge more for longer experiences. The number of wines tasted during the visit also increases the price. Prices are higher in places where there is a high level of wine tourism activity, which might be a sign of authenticity.Practical implicationsWine producers in different countries need to gain insights on how to price cellar tours, which are composite goods. The results can help practitioners price their winery experience according to common practices in different wine regions. The results may also be of interest to professionals in the tourism sector who are in charge of the pricing of by-products (e.g. tee-shirts, books, etc.), or for luxury fashion labels extending their brand in the catering industry with cafes and restaurants.Originality/valueTo the best of the authors’ knowledge, this paper is the first empirical analysis that examines the complex relationship between the price of an add-on and the price of the reference product in the context of wine tourism.

Factors influencing wine ratings in an online wine community: The case of Trentino–Alto Adige

Abstract Consumers often struggle to make their choice in the highly diversified wine market. With wine being an experience good, consumers must rely on extrinsic characteristics, e.g., information on the label. Thus, easily available quality signals like consumer ratings have become an increasingly useful and widespread tool. Vivino is one of the largest online wine communities with over 60 million users, which have more than doubled since 2018. Hence, users have easy access to peer ratings, while established wine expert ratings are being challenged. This study analyzes data from Vivino to explore factors affecting consumer ratings at different price points, considering several wine attributes like geographical indications, brand, and the so-called “community effect.” We show that there is a small but significant community effect on wine's perceived quality related to its popularity among users of the Vivino community, as well as effects from specific wine attributes. Moreover, we estimate a hedonic quantile model on similar price ranges to compare the effect of the same regressors on wine prices. Results contribute to a better understanding of how different factors affect consumers’ wine evaluations, allowing to compare their effect on the “pure” consumer preference (i.e., consumer ratings) and market value.

Decoding the Italian Wine Market: A Quantitative Macro-Economic Examination of Price and Expert Rating Influences

This quantitative analysis explores the key determinants affecting the price per bottle and expert ratings within the Italian wine market. It posits that collective reputation, as signified by Geographic Indicators (GIs), Protected Designation of Origin (PDOs), and certification, primarily drive these factors. The study presents a comprehensive contextual backdrop and literature review to address this hypothesis. This conceptual overview is followed by a novel research design, incorporating significant elements influencing wine pricing and expert evaluations. The investigation employs dual multivariate regression models, thereby corroborating and enriching existing literature on the impact of collective reputation in the wine industry. Key findings reveal that PDO ratings and specific certifications such as classico, reserva, millesimato, or organic production significantly influence Italian wines’ price and expert ratings. The analysis further quantifies these impacts, suggesting that specific certifications can predict notable increases in wine prices and expert evaluations, underlining the importance of geographic origin and diverse certifications in shaping the market dynamics of the Italian wine industry.

Point and interval forecasting for wine prices: an approach based on artificial intelligence

PurposeWith the rise in wine consumption, accurate wine price forecasts have significantly impacted restaurant and hotel purchasing decisions and inventory management. This study aims to develop a precise and effective wine price point and interval forecasting model.Design/methodology/approachThe proposed forecast model uses an improved hybrid kernel extreme learning machine with an attention mechanism and a multi-objective swarm intelligent optimization algorithm to produce more accurate price estimates. To the best of the authors’ knowledge, this is the first attempt at applying artificial intelligence techniques to improve wine price prediction. Additionally, an effective method for predicting price intervals was constructed by leveraging the characteristics of the error distribution. This approach facilitates quantifying the uncertainty of wine price fluctuations, thus rendering decision-making by relevant practitioners more reliable and controllable.FindingsThe empirical findings indicated that the proposed forecast model provides accurate wine price predictions and reliable uncertainty analysis results. Compared with the benchmark models, the proposed model exhibited superiority in both one-step- and multi-step-ahead forecasts. Meanwhile, the model provides new evidence from artificial intelligence to explain wine prices and understand their driving factors.Originality/valueThis study is a pioneering attempt to evaluate the applicability and effectiveness of advanced artificial intelligence techniques in wine price forecasts. The proposed forecast model not only provides useful options for wine price forecasting but also introduces an innovative addition to existing forecasting research methods and literature.

Message in a bottle: Forecasting wine prices

AbstractCan we predict fine wine and alcohol prices? Yes, but it depends on the forecasting horizon. We make this point by considering the Liv-ex Fine Wine 100 and 50 Indices, the retail and wholesale alcohol prices in the United States for the period going from January 1992 to March 2022. We use rich and diverse datasets of economic, survey, and financial variables as potential price drivers and adopt several combination/dimension reduction techniques to extract the most relevant determinants. We build a comprehensive set of models and compare forecast performances across different selling levels and alcohol categories. We show that it is possible to predict fine wine prices for the 2-year horizon and retail/wholesale alcohol prices at horizons ranging from 1 month to 2 years. Our findings stress the importance of including consumer survey data and macroeconomic factors, such as international economic factors and developed markets equity risk factors, to enhance the precision of predictions of retail/wholesale (fine wine) prices.

Recognising wine quality – examining demographic influences and consumer preferences

The globalisation of the market, the entry of new wine countries on the wine world map and changes in consumer lifestyles have led to a change in the perception of wine consumers. These circumstances lead to the need to identify and analyse the factors influencing consumer preferences and wine recognition. This study aims to identify the factors influencing wine quality recognition. The empirical research is based on a survey conducted during the WineRi wine fair in Rijeka in June 2021. A total of 169 people gave valid answers, which form the sample for this study. Based on the collected data, the authors developed a binary logistic regression model in which the participants’ perception of whether they recognised differences in the quality of wines was used as a dependent variable, while socio-demographic, wine consumption variables and variables connected to the wine selection and purchase process were used as independent variables. The results show that age, education, relationship status, household income and frequency of consumption influence the perception of the recognition of the quality of wine, as well as factors such as the perceived relationship between wine price and quality. The conclusions resulting from the analysis carried out might be helpful not only for scholars but also for wine producers when developing a wine product list and marketing strategy.

The grapes in Italian wines: assessing their value

The goal of this work is to assess the impact of grape varieties on the prices of Italian wines. As an important share of this wine is exported worldwide, we look at international markets. We gauge this influence by estimating a hedonic price model based on a sample of 2315 Italian still wines reviewed in Robert Parker’s Wine Advocate. The work expands results offered in literature so far as it considers quite a large number of international national and autochthonous varieties used for producing both red and white wines. Moreover, we propose an original perspective by exploring the different impacts of ageing on wine prices according to the different grape varieties utilized. Results show that, besides the well-known Italian geographical divide, many grape varieties significantly associate with different price levels. Overall, this impact is larger in the case of red wines than for the white ones. Furthermore, for the formers there are few well known varieties associated with positive price premiums, while for white wines, less widespread autochthonous varieties gain higher prices. Last, we found that successful ageing process involve both native varieties of northern and southern Italy as well as international ones.

Wine prices in economics: A bibliometric analysis

AbstractThis article presents a literature review and a bibliometric analysis of academic research on wine prices in economics. The study comprises a review of 180 articles published in journals between 1992 and 2022. Bibliometric and science mapping methods apply indicators identifying the most prominent journals, authors, countries, institutions, topics, most published and cited articles, co‐authorship, bibliographic coupling, cited references, and keywords. This approach highlights the importance of four clusters in the literature: determinants of the wine prices, demand and consumption of wine, fine wine as an alternative investment, and quality and brand reputation of Bordeaux wines. This study shows many areas for further research within and outside these clusters.

The role of customer and expert ratings in a hedonic analysis of French red wine prices: from gurus to geeks?

ABSTRACT Wine experts’ ratings provide quality information and reduce the information asymmetry for the consumer. We hypothesize that consumers’ ratings will come to dominate expert ratings in the wine expertise market. We employ a hedonic regression framework on the attributes of 36,970 French red wines to determine the relative impacts of expert and Vivino community ratings on wine prices. Average consumer ratings are found to have a larger effect on price than expert scores. These results are found to be robust to outliers and the general conclusion that peers matter more than experts holds when we exclude the top-end wines.

Comparison of Conventional and Organic Wines Produced in Kutnohorsk Region (Czech Republic)

A healthy lifestyle and environmental protection play a big role in today’s modern society. The production of organic wine, as with other organic commodities, is therefore becoming increasingly popular with consumers. The selling price of organic wine is higher than that of wine that is not declared organic or BIO, so the question arises from consumers as to whether these wines contain more bioactive compounds and substances beneficial to the body. From a general point of view, it is known that grapevines contain a wide range of natural phenols and polyphenols. These substances affect the sensory properties of wines, especially color and taste. The most phenolic substances are found in red wines, slightly less in orange wines, and the lowest amounts are found in white wines. However, the representation of individual substances and their ratios differs based on the varieties and age of the wines. Therefore, this study aimed to compare the profile (chemical, physical, and sensory) of organic wines compared to wines created from nonorganic grapes, which are grown in a selected wine region—Kutná Hora. The analyzed wines were created from the same grape wine cultivar in the Kutná Hora area. The following analyses were performed on the wine samples: the phenolic and antioxidant profiles, the content of sulfites (free and total), alcohol, sugars, vitamins, density determination, and also sensory evaluation. The present study showed exact differences between samples of wines produced from the same cultivar and the same region, but declared as organic wines and wines from conventional production. Although a higher number of bioactive substances is expected in wines from organic production, in most cases it did not show a statistically significant difference in the sense of a higher amount in BIO wines; on the contrary, in many cases, the content of these substances was higher in wines from integrated production.

The Puzzle of Wine Price in Restaurants

There is large variation amongst food service operators in pricing wine, and many questions remain about how wine is priced and what objectives are used to determine wine price in restaurants. In this essay-style article, we examine the practices that the industry have adopted when pricing wine in restaurants. Beyond the basic rule of thumb – applying proportionally smaller mark-up to higher-priced wines –, pricing can be driven by the market, customer or competition. The restaurant’s characteristics as well as institutional and environmental factors can influence the price of wine at restaurants.

The language of wine reviews

ABSTRACT Expert wine reviewers have a niche skill set, with a particular lexicon, that facilitates their evaluation of wines. Novice consumers may find wine reviews intimidating and confusing. In this paper, we use a dataset of nearly 130,000 reviews from expert reviewers at Wine Enthusiast to explore the lexical dimension of wine reviews and determine to what extent reviewers systematically use language differently across various wine price points. Trends reveal that the information needed to make informed wine purchases are provided through the language of wine reviews. Our analysis shows that wine selection does not require a technical understanding of the wine-specific vocabulary of wine experts. We present a review of the literature on wine reviews and form four hypotheses under the theoretical framework of Kahneman’s two systems of thought—suggesting the linguistic properties of wine reviews reveal the price of wine. We examine how the lexical categories; emotional and logical linguistic content; social; and somatic experiences used in wine reviews relate to price. We then suggest the applicability of this analysis to other commodity domains in future research.

Correlation Between Stock Returns of Wine Corporations and Weather Conditions

Among determinants of wine spot prices, the weather is one of the most influential factors. Previous studies have confirmed the spot price of fine wine is correlated with some weather variables, such as the air temperature. Also, much research illustrates some weather conditions are related to the stock market. In this paper, we focus on the correlation between some weather variables as main determinants of wine prices and the stock returns of wine companies which are listed on NYSE. We have several conclusions: (1) return of equity of wine companies has a negative correlation with the level of precipitation; (2) results are more significant when controlling years; (3) the level of precipitation has greater negative impact on returns during planting season of grapes; (4) the odds of having positive returns in planting season is lower than non-planting season.

Message in a Bottle: Forecasting Wine Prices

Message in a Bottle: Forecasting Wine Prices

Persistence in the passion investment market

Research on the passion investment market is still limited, especially on the issue of persistence. This paper is the first to investigate it using both R/S analysis and fractional integration in the case of 3 fine wine price indices, 10 diamond price indices, 15 art price indices, and 1 stamp price index at the daily, monthly and quarterly frequency. The results can be summarised as follows: wine prices are found to be highly persistent, whilst stamp prices appear to be only weakly persistent, though they can still be characterised as a long-memory process; as for diamond prices, they can be persistent (Diamonds & Gems), anti-persistent (Diamonds Carat indices) or even random (Polished Prices Diamond Index). The dynamic R/S analysis also shows that persistence is time-varying and tends to fluctuate around the average. These findings can be explained by the different degree of liquidity of the assets examined and have implications for both academics investigating market efficiency and practitioners interested in forecasting prices.

Prediction of the Wine Price Purchased Using Classification Trees

The wine market is expected to recover and growth in the following years. Although the market size of this market is small in Mexico; efforts are being made to promote national wines. To support these actions, the current study aims to explore consumers’ decision to pay for a low versus high priced wine according to wine attributes and external influences. A total of 290 wine consumers, knowledgeable about wines, participated in an online survey that took place in the Northwest part of Mexico. The relevance that eleven attributes have on the wine price was assessed through the application of classification trees, a method that has not been previously applied to explore wine purchase decisions. The result indicate consumers are mainly driven by price than the wine attributes. However, relevant attributes for consumers of low-priced wines (less than 20 USD) include “label information” “awards” and “previous tasting”. By contrast, purchase decision of consumers of pricey wines are mainly driven by “country or region of origin” and “vineyard recognition”. The study findings offer provide suggestions on the wine attribute wineries and marketers should focus on to meet the current consumers’ preferences depending on the price-sensitivity and wine knowledge of target segments.