Sunday, September 19, 2010

Pinning down Value - Part 2 of 3

The ‘magical transform‘ is more elusive than I could have imagined before starting this project. Price and Rating are tied together somehow to give us a net worth or value but what this relationship is, or can be, very subjective until it's pinned down. Certainly tastes are individual and impressions of elements of a tasting that lead to a value for that tasting are an individual call. But if it’s your rating, or one from a reviewer you track, and the price is known the value you determine for a wine could be unequivocal. Idealistic you say? Let me try to convince you it‘s realistic.  

(click here for Pinning Down Value - Part 3 of 3

I should say upfront this isn’t an attempt at a universal ‘one fits all’ approach for qualifying Value. What constitutes Value for a wine could vary for each person reading this blog.  But perhaps the format will resonate and more consideration will be given to understanding Value. I’ll be using the result in my tastings so I can say this or that wine is an exceptional value, or not, and I’ll have another basis for future purchases. 

If this approach matches someone else’s need so much the better. Time to repeat - nothing replaces Tasting Notes - they put in perspective the complete wine reviewed. 

The chart in Pinning down Value Part 1 was a simplistic interpretation of a Price, Rating and Value relationship to get started. Keeping the objective of ‘simple’ and applying further consideration (mulling it over) I came up with the second chart shown here.

In the new Chart (click to enlarge), the upper Price boundary is $80CAD and the lower limit is $5. The expectancy is that for an appropriate Value range, higher priced wines will have the highest Ratings and the lowest priced wines should be allowed the lowest Ratings but with accessibility to high Ratings whether it‘s realizeable or not. Even outside a Value range a high priced wine should still be very enjoyable - this is Value not a Rating. To have Value a low priced wine will always have some enjoyable qualities, ie. not below 83/100.

Those with wealth didn’t get it by spending unwisely and usually don’t accept anything but a reasonable return for major expenditures. In the case of wines, whether its an investment in futures or for immediate consumption, mediocrity is not part of a premium wine purchase. They look for Value. An exception to this could be the purchase of a particular wine for reasons other than or in addition to consumption. In this case it would be a mistake to attribute higher Values to what was earlier referred to as ‘conspicuous consumption(1)’ so the chart is truncated at $80.

I have chosen three Value ranges, shown in colour and initially referred to, left to right, as Good/Better/Best.

This chart also plots six wines from $70 to $10 (click to enlarge). Examples top to bottom are:

$70     95/100     Better
$60     90/100     Good
$40     88/100     Good
$30     92/100     Better
$15     92/100     Better
$10     87/100     Good

Now the most difficult part - what to call the three zones. They could be ‘Got my money’s worth’ for Green, ‘Pretty smart purchase’ for Purple and ‘Running back for more’ for Red….  or, more conventionally I‘ve called them, respectively: V1, V2, V3.

  • When someone says ’This wine is great…. You should buy a ton!’  Ask the price and a rating and check its Value relative to other available wines.
  • If you’ve been consistently buying labels from one winery, check them out compared with other wineries/labels. Are you getting good value? 
  • When someone asks for a wine recommendation you can offer a Value comparison - along with your conclusions from a tasting. 

I hope you found this interesting if not useful.  Cheers, Ww

(1) Further on price/value relationship see AAWE WORKING PAPER No. 16

PS. Values for wines in this blog started August 2010

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