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Sunday, January 20, 2008

Study: It Tastes Better if You Spend More

A study about how people view the taste of wine based on its price conducted by researchers at the California Institute of Technology in Pasadena and published this week in the Proceedings of the National Academy of Sciences has been getting a ton of play in the media.

The basic finding is that people believe higher priced wines taste better. Even when the prices had been switched so the cheaper wines were represented to the study participants as the most expensive.

The study was conducted in California using 20 volunteers asked to taste wines with fake prices tags. The volunteers were given five different wines to try at 15 different sessions during the study. While tasting each wine they were told a price. The wines used in the study ranged from $5 to $90 a bottle. The study participants picked the cabernet sauvignons with the higher fake prices eight out of 10 times. The researchers hooked the consumers up to brain scan devices to watch activity in the medial orbitofrontal cortex and found that they were happier when given the wines that they thought were higher priced.

The researchers later replicated the study at the Stanford University Wine Club and got the same results. Then, eight weeks after the original study, participants were given the five wines to try with no suggestion of price. The $5 wine was selected by most of the participants.

So what can we learn from the 20 consumers in this study? One thing is certain: the price of wine is one of the most important elements in a vineyard's marketing plan. Is a $180 bottle of Opus One really six times better than a cabernet blend sold at another nearby Napa winery? The answer in most cases is certainly not, unless you are hosting a business dinner with an important client who has always wanted to try Opus One.

The study clearly shows that price is a key factor in how consumers perceive the quality of a wine. In my experience this holds true for spirits and beer. When looking at a big restaurant wine list with a hundred bottles or more, often two thirds of them are virtually unknown to most people. They might focus on a style or region that they enjoy as a way of making the selection. The prices on wines they do know can give them a hint about the fairness of the restaurant's pricing. However, the study by the California Institute of Technology suggests that restaurants that inflate wine pricing may actually have happier customers at the end of the meal.

The study is a reminder to all of us who enjoy wine to trust our own palates more than price tags. It is easy to believe that something must be really good if a winery, distiller or brewer is bold enough to place a big ticket on the bottle. In many cases the price does reflect costlier ingredients, extra aging, special handling and the skill of the maker. In some cases, the marketing department has decided to charge a certain price for the simple reason that they can. Discerning the difference is each of our jobs as consumers.

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