Monday, 19 June 2017

Yellow Tail — wine imports into the USA do fit a "power law"

Some weeks ago I posted a discussion of whether sales by US wine companies fit the proverbial "power law". The Power Law is used to describe phenomena where large events are rare but small ones are quite common. I concluded that US wine sales in 2016 did, indeed, fit a Power Law, with the exception of the largest company, E&J Gallo Winery. To fit in with the rest of the wine companies, E&J Gallo should have sold c. 3.5 times as much wine as it actually did sell. Apparently, it is rather hard to dominate US domestic wine sales in the way predicted by a simple Power Law.

Power Laws are of interest because of their practical consequences. For example, the 80:20 Rule (or Pareto Principle) is one example of a Power Law, which says that for many events, roughly 80% of the effects come from 20% of the causes.

Power Laws are considered to be universal, and so there is no reason why they should not exist in the wine industry. One of the more obvious places that we might expect to find them is in wine sales — there are likely to be a few wines that sell very well and lots of smaller sales. As I showed in the earlier post, this appears to be generally true for domestic wine production in the USA; and so it is of interest to see whether it also applies to imported wines.

Yellow Tail and the Power Law

Currently, the biggest-selling imported wine in the USA is Yellow Tail (from Casella Wines, in Australia), with more than 8 million cases shipped to the US per year. This would place it at no. 9 in the current Wine Business Monthly top-30 list of wine companies in the USA. In July 2016, The Drinks Business placed Yellow Tail at no. 6 in its list of the Top 10 biggest-selling wine brands in the world, based on sales in 2015.

Unfortunately, I do not have a list of the sales of imported wine in the USA for any of the most recent years. However, in a presentation at the U.S. Beverage Alcohol Forum, which is part of the Wine & Spirits Wholesalers of America annual convention, Mike Ginley provided the US sales data for the top 25 imported table-wine brands in 2012. So, I will use this dataset for the analysis.

As I noted for for the previous analysis, one special case of the Power Law is known as Zipf's Law, which refers to the "size" of each event relative to it's rank order of size. This is what we are looking at here. For each wine brand, the "size" is the number of cases of wine sold during 2012, and the brands are listed in rank order of their sizes (largest to smallest). The standard way to evaluate the Zipf pattern is to plot the data with both axes of the graph converted to logarithms. Under these circumstances, the data should form a straight line.

Here is the graph of the 2012 sales data for the top 25 imported wine brands. Only the best-selling wine is labeled.

A Power Law fitted to the sales of wines imported to the USA

As you can see, all of the data lie roughly along a straight line, and thus do indeed fit a Power Law. That is what we would expect.

However, it is worth noting here that all of the wine brands do fit the same Power Law, including Yellow Tail. This is different from what we found for the domestic wines (where the no. 1 winery under-performed relative to the Power Law model). Indeed, the Power Law indicates that Yellow Tail actually sold 28% more cases than would be expected from the sales of the other wine brands. So, in 2012 Yellow Tail slightly out-performed the expectation from the mathematical model, whereas E&J Gallo greatly under-performed the expectation in 2016.

It is also worth noting the presence in the 2012 top-25 list of some of the best-selling wines from 30 years earlier. The data for 1980 and 1981 are provided in an article from the New York Times (Lambrusco rates high with U.S. consumers). The imported wine brands that have managed to hang on over the decades are: Riunite (no. 5 in 2012, but no. 1 back in 1980 & 1981), Folonari (12 now vs. 4 then), Bolla (18 vs. 3) and Cella (20 vs. 2). In 2012, these brands sold only 20-50% of their 1981 case sales, which is why they have dropped down the ranking.

Previous top-10 imported wine brands that have fallen by the wayside include: Zonin, Giacobazzi, Blue Nun, Mateus, Yago, and Lancers. Perhaps you remember some of them?

Monday, 12 June 2017

Why is wine often cheaper in Sweden than elsewhere?

In spite of considerable complaining by certain Swedes, a lot of wines are cheaper in Sweden than elsewhere in the European Union (EU), particularly European wines. Furthermore, Australian wines are sometimes cheaper in Sweden than they are in Australia; and occasionally even US wines can be cheaper than in the USA. This happens as a direct result of wine retail economics, and the fact that Sweden has a single government-owned retail chain for alcohol sales.

Not all wine is cheaper in Sweden, of course, but the ones I am interested in usually are cheaper; and so I thought that I would write about it.

The bottle shop / liquor store / off-licence (depending on your English idiom) is called Systembolaget (which translates as The System Company), and is wholly owned by and operated on behalf of the Swedish government. It has a monopoly on retail sales in Sweden, but not trade sales (for which there are several hundred importers), nor private imports from elsewhere within the EU.

Since I live in Sweden, I principally get my wine from Systembolaget, but I also get wine sent to me from elsewhere in the EU. I often read reviews written by people in the USA, and check up on their recommendations; and I am interested in Australian wine, since that is what I learned first. It is for these reasons that I am familiar with the prices of wines both inside and outside Sweden, and I can thus make direct comparisons of the prices of the same wine in several countries.

I therefore make the categorical statement that fine wine is cheaper in Sweden than most other places into which it is imported (see the example at the end of the post). But not cheap wine — that is often less expensive elsewhere.

Wine economics

Several people have looked at the economics of wine retail in the United Kingdom, but not so many in the USA. The latter is possibly because bottle prices can vary from state to state, due to differences in taxes, plus the economics of the three-tier distribution system. Economics in the USA is not always a simple thing!

So, as my example of the economics of wine retail sales, I will use the UK, because the situation is simpler. As far as I can tell, the basic economics are no different in most other places, although the actual percentages will vary somewhat. [Note: The UK government has recently announced an increase in excise duty on alcohol; and the Average price of bottle of wine in UK has reached a new high thanks to Brexit. Neither of these facts affects my analysis.]

The economic breakdown of the price of a bottle of wine in the UK has been dissected independently on several blogs:
The Bibendum analysis has been updated yearly, and so I will use their data for March 2017:
Their analysis breaks down the bottle cost into these components: retailer margin, excise duty, value added tax (VAT), packaging, logistics, and the wine itself. They do this for bottles with four different retail prices.

In the first graph I have plotted the percentage of the UK final bottle price that goes to the retailer and to the winery. For comparison, £10 ≈ $12 ≈ 110 kronor.

Retailer and manufacturer margins for a bottle of wine in the UK

As you can see, the margins for the retailer and manufacturer increase as the bottle price increases — neither of them makes as much money on a cheap bottle of wine as they do on an expensive wine, both in straight money terms and as a percentage profit. Furthermore, the retailer is the one making the most money on wines less than about £15 ($20).

This same economics may not directly apply to large supermarket chains, which frequently market their own-label wines. In these cases, the relationship between the manufacturer and the retailer is blurred. This also applies in the USA, where it has been noted (Reverse Wine Snob, by Jon Thorsen. 2015):
Costco's average margin (per their financial filings) is about 12 percent. Costco has stated that the highest margin they will take on a non-Costco brand is 13 percent and they strive to keep it closer to 10 percent. On private label items (Kirkland Signature) they will go up to 15 percent margin, but of course the price is still lower than other brands because they cut out the middleman.

We can now compare the UK economic model to that used by Systembolaget in Sweden. Their model has been a fixed price per bottle, which differs for different products (beer/cider, wine, spirits), plus a fixed percentage. Up to 1 March 2017, the fixed price for wine was 3.5 kr (£0.3) + 19%; from that date it has been 5.2 kr (£0.45) + 17.5%. I have plotted both of these models onto the next graph.

Retailer and manufacturer margins for a bottle of wine in the UK and Sweden

It is now easy to see why wine is cheaper in Sweden, except for the most inexpensive wines. If we define "good wine" as anything above £10 ($12), then Swedes are doing very well, indeed; and the more expensive the wine, the better off they are. The reason for this is quite straightforward — Systembolaget's stated goal is: "To minimize alcohol-related problems by selling alcohol in a responsible way, without profit motive." Needless to say, I am quite pleased with this situation, as a buyer of fine wines.

However, it is also easy to see why a lot of Swedes might complain. They are no different to wine drinkers anywhere else, and therefore a lot of wine purchases are at the inexpensive end of the market. For example, according to Systembolaget, in the first 3 months of this year 35% of wine sales were less than 80 kr (£7, $9) per bottle. At this price, wine in Sweden is not as cheap as elsewhere, and Swedes know it; and as you can see in the graph, it recently got noticeably more expensive, as well.

Systembolaget addresses this issue by virtue of being one of the largest alcohol retail chains in the world (reportedly third, behind Tesco, in the UK, and the Liquor Control Board of Ontario, in Canada). This position gives it a lot of bargaining power with the manufacturers and importers. In fact, Systembolaget puts a lot of the most inexpensive wines directly out to tender (as do their equivalents, ALKO, in Finland, and Vinmonopolet, in Norway) — you can see the current list of tenders here.

Finally, it is worth noting that most of the other bottle costs are similar in Sweden and the UK. For example, the excise duty that is imposed on alcohol in the UK is currently a fixed £2.16 per bottle of wine, while the Swedish alcohol tax is currently 26 kr (£2.30). However, the UK goods and services tax (VAT) is 20%, compared to the Swedish (moms) of 25% — this government tax significantly offsets the reduced retailer margin in Sweden. Sigh.

Note: The excise rates for alcohol in Sweden and the UK are among the highest in the EU, along with Ireland and Finland (see AAWE). On the other hand, EU goods and services taxes generally vary between 20 and 25%.


The next graph shows the advertized price (on April 14, 2017) of a single bottle of Seghesio Family Vineyards Cortina Zinfandel 2013 (from California), for eight US stores, three UK stores, and Systembolaget. The Swedish price includes delivery to the nearest service point in Sweden (438 shops plus c. 500 drop-off locations), but the others exclude delivery.

The US price depends on the store location, with the highest price being 25% greater than the lowest price. The Swedish price is equal to the maximum US price, while being 5-10% less than the UK prices.

Monday, 5 June 2017

How many 100-point wine-quality scales are there?

In the previous post (How many wine-quality scales are there?) I discussed the range of ratings systems for describing wine quality that use 20 points. However, perhaps of more direct practical relevance to most wine drinkers in the USA is the range of systems that use 100 points (or, more correctly, 50-100 points).

The 100-point scale is used by the most popular sources of wine-quality scores, including the Wine Spectator, Wine Advocate and Wine Enthusiast; and so wine purchasers encounter their scores almost every time they try to purchase a bottle of wine. But how do these scores relate to each other? Using the metaphor introduced in the previous post, how similar are their languages? And what do we have to do to translate between languages?

All three of these popular scoring systems have been publicly described, although I contend that it might be a bit tricky for any of the rest of us to duplicate the scores for ourselves. However, there are plenty of other wine commentators who provide scores without any explicit indication of how they derive those scores. This means that some simple comparison of a few of the different systems is in order.

As explained in the last post, in order to standardize the various scales for direct comparison, we need to translate the different languages into a common language. I will do this in the same manner as last time, by converting the different scales to a single 100-point scale, as used by the Wine Advocate. I will also compare the quality scales based on their scores for the five First Growth red wines of the Left Bank of Bordeaux, as I did last time.

The scales for nine different scoring systems are shown in the graph. The original scores are shown on the horizontal axis, while the standardized score is shown vertically. The vertical axis represents the score that the Wine Advocate would give a wine of the same quality. If the critics were all speaking the same language to express their opinions about wine quality, then the lines would be sitting on top of each other; and the further apart they are, the more different are the languages.

Nine different 100-point wine-scoring systems

There are lots of different lines here, which indicates that each source of scores uses a different scheme, and thus is speaking a different language. Many of the lines are fairly close, however, and thus many of the languages are not all that different from each other. Fortunately for us, they are most similar to each other in the range 85-95 points.

First, note that the line for the Wine Spectator lies exactly along the diagonal of the graph. This indicates that the Wine Advocate and the Wine Spectator are using exactly the same scoring system — they are speaking the same language. In other words, a 95-point wine from either source means exactly the same thing. If they give different scores to a particular wine, then they are disagreeing only about the quality of the wine — this is not true for any other pair of commentators, because in their case a different score may simply reflect the difference in language.

It is worth noting that almost all of the Wine Advocate scores came from Robert Parker, while most of the Wine Spectator's were from James Suckling, along with a few from Thomas Matthews, James Molesworth and Harvey Steiman (who have all reviewed the red wines of Bordeaux for that magazine), plus some that were unattributed.

Second, the line for the Wine Enthusiast always lies below the diagonal of the graph. This indicates that the Wine Enthusiast scores are slightly greater than those of the Wine Advocate (and Wine Spectator) for an equivalent wine. For example, if the Enthusiast gives a score of 80 then Parker would give (in the Advocate) 78-79 points for a wine of the same quality. This situation has been noted in Steve De Long's comparison of wine scoring systems, although it is nowhere near as extreme as he suggests.

Third, the line for Stephen Tanzer always lies above the diagonal of the graph, indicating that his scores are usually slightly less than those of the Wine Advocate (and Wine Spectator). Indeed, a 100-point Parker wine would get only 98-99 points from Tanzer.

All of the other lines cross the diagonal at some point. This indicates that sometimes their scores are above those of the Advocate and sometimes they are below. Interestingly, most of these systems converge at roughly 91 points, as indicated by the dashed line on the graph. So, a 91-point wine means more-or-less the same thing for most of these commentators (except Tanzer and the Enthusiast) — it is the only common "word" in most of the languages!

The most different of the scoring schemes is that of James Suckling, followed by those of Jeannie Cho Lee and Richard Jennings (which are surprisingly similar). Suckling is a former editor of Wine Spectator, and he actually provided most of the scores used here for that magazine — this makes his strong difference in scoring system on his own web site particularly notable, as it implies that he has changed language since departing from the Spectator.

Finally, it is important to recognize that all I have done here I have evaluate the similarity of the different scoring systems. Whether the scores actually represent wine quality in any way is not something I can test, although I presume that the scores do represent something about the characteristics of the wines. Nor can I evaluate whether the scores reflect wines that any particular consumer might like to drink, or whether they can be used to make purchasing decisions. Nor can I be sure exactly what would happen if I chose a different set of wines for my comparisons.


The short answer to the question posed in the title is: pretty much one for each commentator, although some of them are quite similar. Indeed, the Wine Spectator and the Wine Advocate seem to use their scores to mean almost the same thing as each other, while the Wine Enthusiast gives a slightly higher score for a wine of equivalent quality.

While there are not as many wine-quality rating systems as there are languages, the idea of translating among them is just as necessary in both cases, if we are to get any meaning. That is, every time a wine retailer plies us with a combination of critics' scores, we have to translate those scores into a common language, in order to work out whether the critics are agreeing with each other or not. Different scores may simply reflect differences in scoring systems not differences in wine quality; and similarity of scores does not necessarily represent agreement on quality.

Averaging the scores from the different critics, as is sometimes done, notably by Wine-Searcher and 90plus Wines, is unlikely to be a valid thing, mathematically. Given the results from this and the previous post (How many wine-quality scales are there?), calculating a mathematical average score would be like trying to calculate a mathematically average language. Jean-Marie Cardebat and Emmanuel Paroissien (American Association of Wine Economists Working Paper No. 180. 2015) have correctly pointed out that the different scoring systems need to be converted to a common score (ie. a common language) before any mathematics can be validly applied to them.

Monday, 29 May 2017

How many wine-quality scales are there?

There are a number of ratings systems for describing wine quality, which use 100 points, 20 points, 5 stars, 3 glasses, etc. Unfortunately, there is usually no "gold standard" for these systems, and so no two wine commentators use these systems in quite the same way.

That is, when critics differ in their wine scores for a particular wine, it can be for one of two reasons: (i) their opinions on the wine's quality differ, or (ii) they are expressing their opinion using different numbers. That is, when the critics produce the same score, they may or may not be assessing the wine as having the same quality, and similarly when they produce different scores. Each critic has their own personal version of the "100-point scale" or the "20-point scale".

This situation is similar to people speaking different languages. Simply looking at a word does not necessarily tell you what language is being used, because the same combination of letters can occur in different languages, with or without the same meaning. For example, the word "December" appears in both Swedish and English, and in this case it has the same meaning in both languages. However, the word "sex" also appears in both languages, but in Swedish it usually refers to the number 6, which is not necessarily related to any of the word's possible meanings in English.

So, if the Wine Spectator gives a wine 90 points, does that mean the same thing as when the Wine Advocate gives that same wine 90 points? Probably not. Just for variety, instead of using the 100-point scale to illustrate this topic, I will use the 20-point scale for wine quality — this emphasizes the need to translate the ratings systems to a common one.

20-point ratings systems

Many American wine drinkers are familiar with the 20-point scale developed in the 1950s by Maynard Amerine and his colleagues at the University of California, Davis, intended as a teaching tool for identifying faulty wines. This was, indeed, an attempt to produce a "gold standard" wine rating system. Each organoleptic characteristic of the wine is assigned a number of points based on its perceived quality, and these points are summed to produce the final score. In both theory and practice, everyone who uses the UCDavis scale should be "speaking the same language"; and therefore any differences in wine scores should represent differences in wine quality, not differences in language.

Sadly, not everyone has agreed with or used the UCDavis scale, especially as a general tool for wine tastings; this topic is discussed in detail in recommended books such as those by Clive S. Michelsen (Tasting and Grading Wine. 2005) and Andrew Sharp (Winetaster's Secrets. 2005). So, there are innumerable 20-point scales in use around the world, and they all seem to represent different languages. To illustrate the range of scales in use, we can compare the scores given to the same wines by different critics.

In order to standardize the scales for direct comparison, we need to translate the different languages into a common language. Jean-Marie Cardebat and Emmanuel Paroissien (American Association of Wine Economists Working Paper No. 180. 2015) have suggested doing this by converting the different scales to a single 100-point scale. The one they chose was the scale used by the Wine Advocate (which is not necessarily the same as that used by the Wine Spectator, or the Wine Enthusiast, etc), and I will do the same here. Furthermore, I will compare the quality scales based on their scores for the five First Growth red wines of the Left Bank of Bordeaux (as described in the post How large is between-critic variation in quality scores?).

The scales for five different commentators are shown in the first graph. The original scores are shown on the horizontal axis, while the standardized score is shown vertically. The vertical axis represents the score that the Wine Advocate would give a wine of the same quality. If the critics were all speaking the same language to express their opinions about wine quality, then the lines would be sitting on top of each other; and the further apart they are, the more different are the languages.

Five different 20-point wine-quality ratings systems

Also shown is the difference in meaning for a wine that gets a score of 18 from each of the critics. If we see a wine score of 18, then La Revue du Vin de France, Jean-Marc Quarin and Bettane et Desseauve mean a somewhat better wine than does Jancis Robinson. On the other hand, Vinum Weinmagazin is indicating a somewhat worse wine. They are, indeed, all speaking different languages; and we readers need to translate between these languages in order to get their meaning.

As another example, at the end of June 2012 Decanter magazine changed from using a 20-point ratings scale to a 100-point scale (see New Decanter panel tasting system). In order to do this, they had to convert their old scores to the new scores. They used a conversion that is precisely halfway between the scoring systems of Jancis Robinson and Bettane & Desseauve, as shown in the next graph (see How to convert Decanter wine scores and ratings to and from the 100 point scale). So, this is yet another different 20-point language.

Seven different 20-point wine-quality ratings systems

So far, I have assumed that there is a linear relationship between the scores from the different critics (ie. the graph lines are straight). However, in an earlier post (Two centuries of Bordeaux vintages) I suggested that the relationship between the Bordeaux scores from Tastet & Lawton and from Jeff Leve (the Wine Cellar Insider) is curved, instead. Indeed, The World of Fine Wine magazine explicitly indicates that their 20-point scoring system is non-linear, as shown in the second graph above. This makes for a very complex language translation, indeed.

As we shall see in the next post (How many 100-point wine-quality scales are there?), translating between 20- and 100-point scales is not straightforward, either.


The short answer to the question posed in the title is: pretty much one for each commentator. Fortunately, there are not quite as many wine-quality rating systems as there are languages. Nevertheless, the idea of translating among them is just as necessary in both cases, if we are to get any meaning.

Does all of this matter in practice? Quite definitely. Indeed, every time a wine retailer plies us with a combination of critics' scores, we have to translate those scores into a common language, in order to work out whether the critics are agreeing with each other or not. Since most of us are not doing this, we may well be fooling ourselves into seeing a false sense of agreement among those critics. The world of fine wine is more complex than most people realize, or would like.

Furthermore, this issue is at the heart of the objections that mathematicians have to simply averaging wine scores across different critics. If the critics are all using different ratings scales, then the average score has no mathematical meaning. That is, if the critics are speaking different languages, then what would the "average" of those languages mean? It would be gibberish, unintelligible to anyone, even if the combination of letters looks like it might be a real word. A classic example of this is the Judgment of Paris, from 1976, in which the "official" summed scores are meaningless, because the tasters were all using different versions of the 20-point scale (see A Mathematical Analysis of The Judgment of Paris). Note also, that the scores using the UCDavis scale are much higher than are the scores for the Judgment (see Was the Judgment of Paris repeatable?).

Monday, 22 May 2017

Lazy journalism

This week marks the first anniversary of this blog. This is an important milestone for most blogs; and I have averaged more than one substantial post per week during that time, as I approach 60 posts. By way of celebration, this post is a bit different to most of the others.

This blog usually deals with wine data in the form of numbers, but there are other forms of data that could be used instead. One of these is industry information, as presented by the media. Sometimes, this is more opinion than properly checked information.

Consider this example from The Fabulous Ladies' Wine Society:
Cumulus Wines is a true child of the 80’s. We reckon the owners must have been listening to UB40's Red, Red Wine on repeat on their walkman when they planted out over 500 hectares of vineyard in the barely known Orange region nearly 30 years ago and built a 10,000 tonne winery with storage capacity for 8 million litres of wine. But obviously they were on to something as it has definitely paid off!
Almost everything written there is nonsense, as also is much of what is said about the same winery at Just Wines.

Cumulus Estate Wines is itself very coy about the company's history, with its description giving the impression of one continuous flow of time. However, this is far from the truth, as indicated by media reports at the time of the various events, such as those from the Newcastle Herald, Chris Shanahan (of the Canberra Times), the Pierpont column (of the Australian Financial Review), the Wine Spectator and Wine Genius. The story is long and convoluted, so here goes.

The company's main vineyard area is south of a small town called Molong, which lies just inside the Orange viticultural area of eastern Australia (the vineyard actually straddles the region's border). The vineyard, called Little Boomey, was established by Peter Poolman in 1995, increasing in size to 508 hectares over the next three years. Capital for the development was raised from hundreds of small investors, with the intention that ownership would revert to Poolman’s company after the investors had leased the vines for 15 years. What was then called Southcorp Wines (Australia's biggest wine company) bought and vinified the majority of Little Boomey’s grape harvests.

The Central Highlands Wine Grape Project, as it was officially called, was actually a tax-driven investment scheme with several vineyard areas. It was merged into a new investment company called Cabonne Limited in 1998, which was publicly listed on the Australian Stock Exchange. In 2001, Cabonne took over Reynolds Wine Company (owned by Jon and Jane Reynolds), and changed its name to Reynolds Wines Limited in 2002. It set up its wine making at Cudal, south of Molong, where a high-tech 10,000-tonne capacity winery had been built.

Reynolds Wines soon went bankrupt, slipping into voluntary administration in August 2003. The problem seems to have been what is euphemistically called an "awkward corporate structure", rather than problems with either the winery or the wine business. The company owed AU$18 million in taxes — presumably, the Australian Tax Office wasn't convinced that the original vineyard schemes were truly tax-deductible (a decision that they also applied to other vineyard small-investor schemes).

At the time, the subscribers to the original tax-minimization schemes apparently still owned, as license holders, the grapevines on Reynolds' three properties (reverting to Reynolds between 2012 and 2018), and also had rights to the wine made from those vines. The wine was concurrently being sold through a joint venture with the Trinchero group, from the Napa Valley in California (currently the fourth biggest winery in the USA, by case sales). As a result, Trinchero Family Estates acquired the Reynolds and Little Boomey brand names early in 2004, but had no interest in buying either the winery's production facility or its 900 hectares of vineyards.

The bankruptcy receiver (appointed by the ANZ Bank) sold the Cudal winery, the adjacent 508 hectares of vineyard and other assets to Cumulus Wines Proprietary Limited for AU$30 million — much less than the AU$130 million that Cabonne is reported to have invested in developing the property. Cumulus agreed to underwrite the bank loan only, which means that none of the investors got their money back, neither the original grape leasers nor those later investing via stock-exchange shares (ie. the bank came out of this okay but no-one else did!).

The Cumulus Wine company had been set up in 2004 by an underwriter and insurer called Assetinsure Proprietary Limited (50% owned by investment bank Babcock & Brown), based in Sydney. Philip Shaw (former Southcorp head of production) was appointed as the winemaker to develop the new wine company, focusing on cool-climate grapes from Orange and elsewhere in the Central Ranges viticultural area. The Little Boomey vineyard was re-named Rolling. In 2005, Keith Lambert (another former Southcorp chief executive) acquired a 51% stake in the company.

A worldwide distribution network was established. However, this proved to be overly ambitious, in spite of grants from the Export Market Development Grants Scheme, from the Australian government. So, in 2007 the Berardo wine family, of Portugal, bought the 51% share-holding. The Berardo Group has extensive wine investments in Portugal, via the Bacalhôa Vinhos de Portugal group, a 33% stake in Sogrape (Portugal’s largest wine company), 25% of Henriques & Henriques Lda (of Madeira), and joint ownership of Quinta do Carmo (with Eric de Rothschild, of Château Lafite), as well as owning 50% of Colio Estate Wines (one of Canada’s major wine producers).

This partnership between Assettinsure and the Berardo Group lasted for some; and in 2013 they launched a new wine sales and distribution company, Epoch Wine Group. [Don't worry, you are now well over half-way through the saga.]

However, in 2015 Cumulus Wines was involved in a scrip-for-scrip merger (ie. shares were exchanged instead of cash) with the trading company Wine Insights Proprietary Limited. This company owns Beelgara Estate, from the Riverina viticultural area (south-west of Orange), as well as making wine from the viticultural areas of Margaret River (Moss Brothers label), Coonawarra (Riddoch Run), Mudgee (Frog Rock), Adelaide Hills (Em’s Table), Clare Valley, McLaren Vale and Yarra Valley, among othes. Beelgara Estate was formed in 2001, when a group of shareholders bought the 70-year old Rossetto Wines company, including its winery at Beelbangera, just outside Griffith. This company had then merged with Australian Wine Supply in 2004, and the Wine Insights company was created in 2012, following further acquisitions and partnerships (including contract wine-making and bottling, and bulk wine supply).

The Cumulus merger is reported to have created a joint venture producing, per year, more than 400,000 cases of wine and with a gross revenue of AU$20 million. Winetitles Media now ranks Wine Insights as the 15th largest Australian wine company by revenue (and sales of branded wine) and 20th by wine-grape intake.

However, the venture also put the Rossetto winery, at Beelbangera, up for sale, because the merged group chose to centralize its wine production at the Cumulus winery, at Cudal. This seems to mean that the Riverina grapes are now going to be transported 350 km to be processed (at Cudal), rather than being processed locally (at Beelbangera). Much worse, the Margaret River grapes would be transported 4,000 km for processing, the Coonawarra and Adelaide Hills grapes would be trucked 1,000 km, etc. Environmentally friendly this would not be (with a large carbon footprint), although the accountants must love it.

That's it, for the moment. Nothing stays the same for long in the world of Australia's large wine companies. But the next time you read a media report about some wonderful winery, you should wonder what is the reality behind it.

Monday, 15 May 2017

Opus One, and the argument for varietal diversity

The red wines from Bordeaux contain one or more of several grape varieties: Cabernet sauvignon, Cabernet franc, Merlot, Malbec and Petit verdot. (They used also to contain Carménère, but that grape is now rare in Bordeaux.) When Robert Mondavi and Philippe de Rothschild decided to make a Bordeaux-style wine from Napa-grown grapes, they naturally used these same varieties.

This wine has been known as Opus One, with its first vintage in 1979. It was the first ultra-premium wine from the USA, the California equivalent of a Bordeaux first growth, intended as a benchmark for the wines produced from cabernet grapes in the Napa Valley. It has struggled to maintain that reputation, as it has been persistently criticized for inconsistency from vintage to vintage. Certainly, other wines have surpassed it in price and/or reputation (e.g. Ridge Monte Bello has a similar Bordeaux-style aim), although they all sell considerably fewer than the 25,000 annual cases of Opus One.

This inconsistency bears looking into. I contend that it has at least something to do with the variation in grape varieties.

The wine started out as a blend of mainly cabernet sauvignon, along with some cabernet franc and merlot. Then, malbec was added to the blend in 1994, and petit verdot was added from 1997 onwards. The proportion of these grape varieties in the wine has varied from year to year, as determined by the winemakers. The winemakers were Tim Mondavi and Lucien Sionneau from 1979–1984, and Tim Mondavi and Patrick Léon from 1985–2000, with Genevieve Janssens assisting from 1991–1997. Michael Silacci has been the chief winemaker since 2001, early on with either Tom Mondavi or Philippe Dhalluin, but alone since 2004.

In this blog post I wish to look at the variation through time in the diversity of the grape varieties within the wine. A number of mathematical measurements of diversity have been developed in science, for making precisely this sort of comparison. The idea is to reduce the proportions of the various grape varieties down to a single number (for each vintage) that quantifies their diversity, from a single grape variety at one mathematical extreme to equal amounts of each grape variety at the other extreme.

The one I will use here is called the Shannon Diversity Index (see Wikipedia). This Index will be a number between 0 (for a single grape variety) and the natural logarithm of 5 (for equal amounts of each of the 5 varieties). The data for each vintage come from the Opus One web site. The variation in Shannon diversity is shown in the first graph, with the vintages plotted horizontally and the diversity plotted vertically.

Grape diversity through time for the Opus One wine

This graphs shows that there was a lot of variability between the first few vintages, while the winemakers worked out what wine style they were aiming for. Furthermore, from the early 1990s onwards the diversity has steadily increased. This has been partly the result of using five grape varieties, as opposed to the original three, but it is mainly a result of using greater proportions of the minor varieties. In the early years, there were vintages composed of >95% cabernet sauvignon, but over the past 10 years it has been closer to 80%. For the rest of the grapes, it has been c.7% merlot, c.6% cabernet franc, c.6% petit verdot, and c.1% malbec.

Having established that the winemakers have been moving towards a greater diversity of grape varieties in Opus One, we can now ask whether this has improved the wine quality in the eyes of the drinkers. There have, of course, been a number of retrospective tastings of the vintages of Opus One, which is getting closer to its 40th vintage. It therefore seems worthwhile to see whether the quality scores given to these wines are associated in any way with the particular mixture of grape varieties that have been included in the wine over the years.

The most complete vertical tasting that I have been able to find is that of Antonio Galloni, from 2013, which included all of the vintages from 1979–2010. Sadly, the best vintage of all has been suggested to be the 2013, which misses out. In the next graph I have plotted Galloni's quality scores (vertically) against the Shannon diversity (horizontally), with each point representing a single vintage.

Wine quality and grape diversity for the Opus One wine

The graph shows a general increase in quality score with increasing diversity, with four exceptions (as labeled in in the graph). Excluding these four vintages for the moment, a correlation analysis shows that 42% of the variation in the wine quality score is associated with the grape diversity score. That is, increasing the diversity of the grape varieties in the wine has generally improved the quality, which is presumably what the winemakers have intended.

The four exceptions are instructive. The 1980, 1984 and 1987 vintages consisted almost entirely of cabernet sauvignon (>95%), and this has obviously been a very erratic strategy in terms of wine quality (sometimes it worked and sometimes it didn't). Furthermore, the 1980 and 1984 vintages consisted solely of cabernet sauvignon and cabernet franc, with no merlot at all. On the other hand, the 2006 vintage had the highest proportion of merlot yet, at 12%, which is double the usual amount. This created a high diversity value but obviously not a high quality score from Galloni. The winemakers again tried such a high proportion of merlot for the 2011 vintage (11%), and Galloni's preliminary score for the resulting wine (not yet released) indicated that he didn't think it had worked then, either.

This pattern could, of course be unique to Antonio Galloni — I have repeatedly pointed out that wine critics rarely agree much with each other about wine quality (see How large is between-critic variation in quality scores?). However few of the other professional commentators have conducted extensive vertical tastings of Opus One. So, by way of comparison, let's look at the opinions of a group of non-professionals.

In 2002, Bob Henry, a wine marketer from California, conducted a group tasting of the first 20 vintages of Opus One (1979–1998). Each of the 23 tasters was asked to rank their top three wines, with 3 points being assigned to the top wine, 2 points to the second wine, and 1 point to the third wine. These scores were then summed across the tasters, in order to rank the quality of the vintages. These results are compared to those of Galloni in the next graph, with each point representing one of the 20 wines.

Quality scores for vertical tastings of the Opus One wine

As you can see, only nine of the wines scored any points (ie. was a top-3 wine for any of the tasters). Most of these wines were also high-scoring wines for Galloni, and so we can treat this as a general confirmation of his scores. However, note that the 1980 vintage, which had a low grape-diversity score but still received 95 points from Galloni anyway, was not a high-scoring wine for the tasting group. This means that only the 1987 wine scored points but had a low grape-variety diversity. Indeed, the 1991 vintage was the only high-scoring wine before the introduction of malbec and petit verdot to the mix.


In biology (including agriculture), diversity is considered to be a Good Thing. Here, the Opus One wine seems to support this idea, as increasing diversity of grape varieties is associated with higher quality wines. Furthermore, the winemakers have been steadily increasing this diversity with each succeeding vintage. This is a strong argument for varietal diversity in wines. If nothing else, this helps explain the wine's reputation for inconsistency — poor vintages have generally arisen from reliance on too few grape varieties.

Monday, 8 May 2017

The Wine Spectator prefers modern wine styles

In some recent posts I have compared the wine-quality scores provided by different commentators. While doing the data analyses, I noticed that the scores from the Wine Spectator magazine had a particular pattern that the other scores did not — there was a time trend to the scores.

For example, in the post on Poor correlation among critics' quality scores, I compared the quality scores from five commentators over 60 vintages of the Penfolds Grange wine. There was no time trend in the scores for four of the commentators, but the Wine Spectator showed a very clear upwards trend in the scores through the vintages, as shown in the first graph. [Note: most of these wine scores were not given at the time of release, but are based on subsequent retrospective tastings.]

Wine Spectator quality scores for Penfolds Grange

For comparison, the time correlation value for the other commentators ranges from 7% to 18%, versus 58% for the Spectator. So, for the Wine Spectator more than a half of the variation in the scores is associated with time, which is not true for the other commentators.

The line in the above graph is a running average (of 9 vintages), showing that the scores rise until the early 1990s, and then remain somewhat steady after that. Indeed, it was in 1995 that the Wine Spectator named the 1990 Penfolds Grange as its wine of the year.

This intrigued me, so I looked for other long-term data from the Wine Spectator. I looked for a broad range of wine types (different styles from different regions), since the Spectator has a range of different reviewers, and I wanted to include as many of these as possible. For each wine, I wanted at least 10 scores from the period 1975-2014 (40 vintages), with some of the scores before and some after the 2000 vintage. What I came up with is shown in the table, with the time correlation indicated for each wine.

Schloss Vollrads Riesling Spätlese, Rhine
Ruffino Riserva Ducale, Chianti
Schloss Johannisberg Riesling Spätlese, Rhine
E. Guigal Château d'Ampuis, Rhône
Fontanafredda Serralunga d'Alba, Barolo
J.J. Prüm Wehlener Sonnenuhr Riesling Auslese, Mosel
Viña Tondonia Reserva, Rioja
Penfolds Grange Bin 95, Barossa
Louis Latour Corton Grand Cru, Bourgogne
Viña Tondonia Gran Reserva, Rioja
Château Latour, Bordeaux
Moet & Chandon Brut, Champagne
Château Lafite-Rothschild, Bordeaux
Henschke Hill of Grace, Barossa
Château Climens, Bordeaux
Robert Mondavi Winery Cabernet Sauvignon, Napa
Château Mouton-Rothschild, Bordeaux
Château Margaux, Bordeaux
Stag's Leap Wine Cellars Cabernet Sauvignon, Napa
Joseph Drouhin Charmes-Chambertin Grand Cru, Bourgogne

As you can see, the majority of the correlations are high — in this context, any correlation greater than about 20% is unusually high. As an illustration of what a 25% correlation looks like, in the next graph I have included the data for two of the Bordeaux chateaux for the period since 1980.

Wine Spectator quality scores for Chateaux Latour and Lafite

It turns out that I am not the first person to have noticed this pattern. In a blog post entitled Fun with wine numbers, Tom Wark looked at the Wine Spectator's point scores for several hundred California chardonnays over 18 years. He summarized the data in terms of the percentage of wines with particular scores; and I have graphed his results in the next figure.

Wine Spectator quality scores for California chardonnays

The decrease in the percentage of wines with scores <80 is the result of an editorial decision to stop publishing such scores (there are plenty of wines with high scores to write about). However, the increase in the percentage of wines with scores >90 is precisely what I have shown above for individual wines.

Why has this happened?

This leads inevitably to a consideration of what is causing this time pattern. Tom Wark commented: "I honestly don't know what to make of this. It looks like point inflation taking place ... On the other hand, it just may be that CA Chardonnays got a heck of a lot better."

The Wine Spectator itself agrees with the second option. Writing in that magazine, James Laube (Wine rating inflation) noted: "It's indisputable that wines are better now than a generation ago. Vineyard management, winery technology, winemaker skill — all have progressed. And as wines have improved, ratings as reflected by scores have risen."

However, not everyone else agrees with this idea. If we take the Henschke Hill of Grace wine listed above, for which the Spectator time correlation is 26%, the time correlations for the same period from some other commentators are: Jancis Robinson 0%, Jeremy Oliver 4%, James Suckling 5%, Huon Hooke 25%, and Robert Parker 26%. So, two of the critics agree with the Spectator about increasing quality, and three don't.

It is inevitable that Parker's wine scores went up, of course. Lots of winemakers started making "Parker wines" precisely for the purpose of getting high "Parker scores", and so it is inevitable that Parker would prefer later wines to the earlier ones — they were made especially for him. In this sense, Parker is simply the victim of his own excess — his strong wine bias has helped create a wine world that suits him well, but not necessarily anyone else, including other wine commentators. The wines styles do, however, seem to suit the palates at the Wine Spectator.

This is not really score inflation, but is instead simply another example of confirming the consequent. It is a feedback loop, in which high scores encourage wine makers to produce wine styles that will generate more high scores.

To examine the idea that the Wine Spectator's scores reflect score inflation, instead of better wines, we would need data that are independent of Robert Parker, which we do not have. However, it is worth noting that the Spectator's higher scores for recent wines occur even in vertical tastings, where all of the vintages are tasted at the same time. So, the high scores do not represent a slow creep upwards through time, but are instead a clear preference for modern wines compared to older styles.

Modern wine styles are associated with the change to riper vintages since 1990 (often attributed to global warming; see Fifty years of Bordeaux vintages), which produce "bigger" wines with higher alcohol contents. If you want to read about such things, then Dan Berger has a long series of posts in his USA-syndicated wine column (thanks to Bob Henry for pointing these out to me):
Big wines
Bored with big wines?
Bigger is better?
Bigger: Is it better?
'Big' wines
Is bigger better?
High alcohol
A troubling trend?
Another look at high alcohol content
How much alcohol should wine have?
Blind tasting and alcohol
High alcohol and diminishing wine styles

Monday, 1 May 2017

Do sales by US wine companies fit the proverbial "power law"?

The short answer is: almost.

The Power Law is used to describe phenomena where large events are rare but small ones are quite common. For example, there are few billionaires while most people make only a modest income; there are few large cities but many small towns; there are few very frequent words (such as "and", "the") but many rare words.

Mathematically, Power Laws are of interest because of what is known as "scale invariance", as well as the fact that there is no well-defined average value. You can read about this in Wikipedia.

For the rest of us, Power Laws are of interest because of their practical consequences. For example, the 80:20 Rule (or Pareto Principle) is one example of a Power Law, which says that for many events, roughly 80% of the effects come from 20% of the causes. You can also read about this in Wikipedia. For a discussion of this idea, see What is the 80/20 rule and why it will change your life. [Sometimes, it is also 90/10; for example, it is usually estimated that 90% of wine consumption in the USA is by 10% of the people.]

Power Laws are considered to be universal, and so there is no reason why they should not exist in the wine industry. One of the more obvious places that we might expect to find them is in the size of wine companies. Size might be measured by amount of wine produced or by monetary income, for example. Either way, there will be a few very big companies and lots of little ones.

So, let's look at a specific example. In its February 2017 issue (p.48), Wine Business Monthly compiled its fourteenth annual ranking of the top 30 U.S. wineries by case sales (in 2016). You can see a copy of the list in Big Wine takes over.

Wine Business Monthly notes:
Though there are now 9,091 wineries in the U.S., the WBM 30 companies represent more than 90 percent of domestic wine sold by volume. The three top wine companies by themselves represent more than half of all case sales.
This sounds like a classic case of a Power Law; and so it is worth checking this possibility.

One special case of the Power Law is known as Zipf's Law, which refers to the "size" of each event relative to it's rank order of size. This is what we are looking at here. For each wine company, the "size" is the number of cases of wine sold during 2016, and the WBM 30 companies are listed in rank order of their sizes (largest to smallest).

The standard way to evaluate the Zipf pattern is to plot the data with both axes of the graph converted to logarithms. Under these circumstances, the data should form a straight line. Here is the graph of the WBM 30 data. The three largest wineries are labeled.

A Power Law fitted to the sales by US wine companies

As you can see, almost all of the data lie roughly along a straight line, and thus do indeed fit a Power Law. That is as expected; and the Power Law is thus not proverbial in this case.

However, there is one exception — the largest company, E&J Gallo Winery, did not produce enough wine to fit into the same pattern as the other 29 wineries. Indeed, to fit the Power Law, the top-ranked company would need to have sold about 260 million cases during 2016, which is c. 3.5 times as much wine as E&J Gallo actually sold.

This is an interesting finding. The Power Law suggests that the biggest US winery (and thus the biggest wine company in the world) should dominate the US industry to a greater extent than the Gallo winery currently does. That is, having one-quarter of the US wine market is not enough! The current degree of industry dominance has been held by Gallo for at least the past quarter-century, but it seems unlikely that it has ever dominated sufficiently to fit the Power Law. Apparently, it is rather hard to dominate US wine sales in the way predicted by a simple Power Law model.

This "under-performance" by Gallo may be a good thing for the consumer, of course, since Diversity is usually a better thing than is a Power Law — the Power Law actually represents a rather extreme situation.

For comparison, the biggest-selling imported wine in the USA is Yellow Tail (from Casella Wines, in Australia), with more than 8 million cases shipped to the US per year. This would place it at no. 9 in the WBM 30 list. This will be the subject of a separate blog post.

Monday, 24 April 2017

Be wary of "Second Chance Offers" on eBay

Wine cannot be advertised for sale on the English-language eBay sites without a liquor license (e.g. in the U.S.A., U.K., Australia, Canada, Ireland). However, it can be sold privately on many of the mainland European sites (eg. Austria, Belgium, France, Germany, Italy, Netherlands, Spain), except to minors. The wine can then easily be sent anywhere within the European Union. Indeed, many European wine shops use eBay as one of their online portals.

This is generally a Useful Thing for customers, because older vintage wines are widely available, usually much cheaper than in wine shops or at other auctions. However, the buyer must beware. In eBay terms, for older wines you are formally buying the bottle, not its contents, since there is no independent evaluation of the condition of the wine, as occurs for other auctions (and for which the buyer is charged a substantial premium).

I have purchased some very nice wines from 1945-2000 this way, although I have also had a few rather mediocre ones.

I have not yet been ripped off. Indeed, eBay prides itself on dealing with shonky activities by its members, although these activities still exist, and will presumably continue to do so. Last year, I encountered the following example, which I explain here for your education, because it involves a general issue with eBay.

A Milan-based seller became active selling old vintages of Barolo wine. This in itself is not unusual, but what attracted my attention was that the seller was offering free shipping, apparently worldwide. That is very unusual, because international shipping costs from Italy (even within the European Union) are often more expensive than the wine itself. How could the seller afford this? Buyer beware!

So, I decided to keep a curious eye on several of the wines. When I did so, an unusual bidding pattern appeared.

I have attached at the bottom of this post images of the final bidding results for all seven of the wines that I followed. Many more wines were offered by the seller, but I did not check their results. You will note that in all seven cases a previously unknown bidder (ie. one who had never bought anything on eBay before) put in a late bid. In six of the seven cases this newbie bidder won the auction.

This is a quite unbelievable coincidence, and I do not for one moment believe it. I occasionally see newbies bidding high prices on wine, but not seven different newbies bidding on all of the wines that I happen to be watching. If you are prepared to accept this, then I have this bridge in Brooklyn that I would like to sell you ...

Indeed, this looks exactly like shill bidding — defined as "bids on an item with the intent to artificially increase its price or desirability." Normally, the shill bidder does not win the item, but merely forces the other bidders into bidding unnecessarily high, preferably by forcing them to their maximum possible bid. This happened for one of the seven auctions shown below (the fourth one), in which an inexperienced bidder paid €151 for a wine that no-one else thought was worth more than €100. So, the shill bidder managed to extract an extra 50% of profit from the auction. This also happened for the third auction.

The other five auctions require a somewhat different explanation for their profitability.

Unfortunately, eBay has a mechanism that allows shill bidders to ostensibly "win" the item while still achieving their purpose of forcing another buyer to pay more for the item than they needed to. This is called a Second Chance Offer. After the auction, the highest losing bidder is contacted by the seller and told that they have another chance to buy the item, by paying their maximum bid amount.

So, the purpose of the shill bidding in this case is to reveal, to the seller, the buyer's maximum bid. Normally in an auction, the maximum bid for the highest bidder is not revealed to the seller, only the fact that they bid higher than everyone else. Of course, all of the losers' maximum bids are revealed.

Let's take one example from below, the sixth one. The highest bid is the shill bid (from bidder t***t), which was more than €114 — we do not know the actual bid, but one of the other examples (the fourth one) suggests that it was most likely €150. The second highest bid was €112.98 (from genuine bidder 7***8), and the third highest was €79 (from genuine bidder o***2). This means that, without the shill bid, the item would have sold for €79.50 to bidder 7***8. Instead, a Second Chance Offer is sent to 7***8 for sale of the item at €112.98, with a handsome extra profit of €33 to the seller (in collaboration with the shill bidder, who may or may not actually be a separate person).

Note that this approach to shill bidding does also deal with snipe bidders (ie. those who bid during the last few seconds of the auction — there are some examples below). Snipe bidding is sometimes considered to be immune to the actions of shill bidding (eg. How to snipe a winning bid), but it is not immune to the Second Chance Offer problem on eBay.

Caveat emptor. Be very wary of eBay's Second Chance Offers. If you want to play safe, ignore them.

Fontanafredda 1990

Marchesi di Barolo 1990

Pira e Figli Riserva 1990

Marengo Marenda Cerequio 1989

Michele Chiarlo 1988

Franco Fiorina 1955

Conterno Bricco Bussi Vigna Cicala 1990

Note: This post is modified from a post on my other blog: The Genealogical World of Phylogenetic Networks.

Monday, 17 April 2017

Was the Judgment of Paris repeatable?

A few months ago I wrote a blog post for the Academic Wino, discussing the 1976 wine tasting that has become known as the Judgment of Paris, organized by Steven Spurrier and Patricia Gallagher. Here, wines from France were tasted along with some wines from California, and the latter acquitted themselves very well in the opinions of the tasters.

Given the outcome of this tasting, it is possibly the third most important event in the social and economic history of wine in the USA, after the imposition and then repeal of Prohibition. It was certainly made much of by the media during the Bicentennial; and this has been repeated every 10 years since. World wine was henceforth taken seriously, not just the European wines.

However, one of the things that struck me most strongly about this tasting was just how variable the results were amongst the tasters — hardly any of the tasters agreed closely with each other about the quality scoring of the wines, and especially about which wines were the best among the 10 reds (bordeaux grapes) and the 10 whites (chardonnays).

This immediately calls the repeatability of the results into question. After all, only one bottle of each wine was tasted, on one occasion, by one group of people. What would happen under other circumstances?

This is particularly important to me as a scientist, because it is the ability to independently repeat an experimental result that is considered to be the only really good evidence in science. For example, if no-one else can replicate my experiments for themselves, then my results will not be widely accepted in the scientific community.

So, given that it is common knowledge that the results of wine tastings are often barely repeatable, why was the Judgment of Paris tasting not widely repeated by other people at other places? The results were widely reported, but apparently only Frank J. Prial, writing in the New York Times (June 16 1976, p. 39), warned against taking the unreplicated wine-tasting results too seriously: "One would be foolish to take Mr Spurrier's little tasting as definitive." And yet, this is what the media very much did.

A first attempt at replication

However, Robert Lawrence Balzer did partly replicate the tasting, later in the same year. Balzer was among the earliest of the wine journalists in the USA, specializing in California wines. He was the wine columnist for the Los Angeles Times, and he also wrote his own newsletter, Robert Lawrence Balzer’s Private Guide to Food and Wine. More importantly, he had previously (in 1973) organized an important tasting of French and US wines, in New York (see Wikipedia).

So, if anyone was going to try replicating the Judgment of Paris, and publish the results, it was likely to be Balzer. The resulting tasting was discussed on pages 77-84 of Volume 6 Number 8 of his newsletter. [Thanks to Christine Graham for kindly sending me a copy of this article.]

Unfortunately, Balzer explicitly stated that his tasting was inspired by the Judgment "without any attempt at exact duplication". This is a pity, because an attempt at exact duplication is what we require. So, Balzer had only 9 of the 20 wines duplicated exactly, while some of the others differed either as to vintage or producer, and some were completely different.

For the red wines, 6 wines were identical to the Paris tasting (4 from the US, 2 French), 2 had different vintages (both French), and 2 of the Paris wines were not tasted (both US). For the white wines, 3 were identical (all US), 4 had different vintages (2 US, 2 French), 1 differed as to producer (French), 1 differed as to both vintage and producer (French), and 1 was not re-tasted (US). For the French wines, it was at that time recognized that there could be big differences between wines from different producers even when harvesting grapes from the same vineyard, and also between vintages from the same producers; and so, these differences prevent those wines from being treated as repeats of the Paris tasting.

The results for the 9 repeated wines, averaged across the 9 tasters' scores, are shown in the first graph, with the red wines in blue and the whites in green. If the scores of the two tastings were identical, then the points should lie along the pink line.

The results of the Balzer tasting

The scores for the American tasting are considerably higher than those of the Paris tasting. The Americans presumably were using the UC Davis 20-point scoring system, which the French tasters were definitely not. The Davis system does not use very much of the 20-point range, as it reserves a large part of the range for faulty wines, which was an important part of its development as a teaching tool (see Steve De Long's comparison of wine scoring systems). Even today, French tasters still often use much more of the 20-point range than do Americans (eg. La Revue du Vin de France).

In spite of this, the scores from the two tastings are correlated — indeed, 67% of the variation in the Balzer scores is directly related to the Paris scores. This is quite a good degree of repeatability. However, it is not the complete picture.

First, note that the rank order of the white wines is not the same in the two tastings — the Chateau Montelena 1973 Chardonnay was ranked first in the Paris tasting, while the Chalone Vineyard 1974 Chardonnay was ranked first in the Balzer tasting. Second, the red wines form two score groups in the Paris tasting, whereas they do not in the later tasting — indeed, the Château Montrose 1970 and the Mayacamas Vineyards 1971 Cabernet had the same average score in the Balzer tasting, whereas they had very different scores in Paris.

Perhaps more importantly, however, the erratic nature of the wine preferences among tasters was repeated in the American tasting. For example, among the red wines, only one person actually chose the Stag's Leap Wine Cellars 1973 Cabernet as their top-scoring wine, in spite of the wine getting the highest average score — and even that person scored it joint top with Château Léoville-Las-Cases 1970. In fact, the 9 tasters chose 7 different wines as their top-rank! The whites were no different, with only one person recorded as picking the Montelena as their (joint) top wine.

First, but only in one out of three tastings.

So, the things that were repeatable at the repeated tasting were a lot of the "wrong" things. The unreliability of wine tastings was strongly in evidence, and the preference rankings varied (particularly the "winner" among the whites).

A second replication

The only other published tasting that was a serious attempt to evaluate the results of the Judgment tasting occurred nearly 2 years afterwards, in January 1978, at the Vintners Club. This club was formed in San Francisco in 1971, to organize weekly wine tastings (usually 12 wines). Remarkably, the club is still extant (having had only four presidents), although tastings are now monthly, instead of weekly. The early tastings are reported in the book Vintners Club: Fourteen Years of Wine Tastings 1973-1987 (edited by Mary-Ellen McNeil-Draper. 1988).

For the Judgment of Paris replication, 98-99 people tasted the wines over two evenings (white then red), "with Steven Spurrier himself in charge". The tasting allegedly "duplicated [the Paris] tasting to the last bottle", but in fact the vintage listed for the Bâtard-Montrachet Ramonet-Prudhon differs from the Paris event, leaving 19 duplicated wines. The Vintners Club has "always kept to the Davis point system" for its tastings; and so the scores were higher than for the Paris tasting, as discussed above.

The next graph shows the results for the 19 repeated wines, averaged across the 88 (red) and 55 (white) people who provided scores; once again, the red wines are in blue and the whites in green.

The results of the Vintners tasting

As before, variability of the results is the name of the game. Indeed, every red wine was placed first by at least one of the tasters, as well as being placed last by at least one of the tasters; and every white wine was placed first at least once, except for the David Bruce Winery 1973 Chardonnay, and every white was placed last, except for the Chalone Vineyard 1974 Chardonnay.

The Vintners book claims that "the results were very similar to the preceding tasting in Paris", but in fact the scores from the two tastings are not well correlated at all. For the white wines, only 35% of the variation in the Vintners scores is directly related to the Paris scores; and for the red wines it is a measly 10%. For tastings of the same wines under reasonably similar circumstances, these are very low values, and they indicate very poor repeatability.

For the red wines, the Stag's Leap Wine Cellars 1973 Cabernet was placed 1st, as it had been in the previous two tastings. However, the Heitz Wine Cellars Martha’s Vineyard 1970 Cabernet was placed 2nd, having been placed 9th in Paris. For the white wines, the Chalone Vineyard 1974 Chardonnay was placed 1st, as it had been in the Balzer tastings (3rd in Paris), with the Chateau Montelena 1973 Chardonnay placed 2nd (1st in Paris).

With one exception, the Balzer and Vintners tastings are reasonably well correlated (64% of the variation in common), although the Balzer group's scores were (on average) 1 point higher per wine than for the Vintners group. The exception is the Heitz Wine Cellars Martha’s Vineyard 1970 Cabernet, which the Balzer group scored as 14.6 and the Vintners group scored as 16.9. The Spurrier group's result is more in accord with the Balzer group, for this wine.


Neither of these two tastings inspires much confidence in the replicability of wine tastings, let alone the repeatability of the Judgment of Paris in particular. Even to this day, I still read of people expressing the opinion that the difference between Californian and French wines is "obvious". Well, it wasn't obvious to the people at any of these three tastings.

As Mike Steinberger noted in Slate (Nov. 7 2007, In blindness Veritas?): "there is a tendency to overlook the fact that wines and palates are fickle, and to read more into the results than is justified. This was certainly true of history's most famous blind tasting, the 1976 Judgment of Paris".

You will, however, have noted, I am sure, that all three tastings produced a California wine as the "top" for both the reds and whites! There is simply some disagreement about which one it is.

There seems to be little here that supports the media hoopla that ensued in 1976, at least in terms of California versus France "winners". It was the California wine industry that was the big winner, not the individual wines.

Monday, 10 April 2017

Napa versus Bordeaux red-wine prices

In a recent article on Wine-Searcher, Blake Gray addressed the question: Does Napa have too much Cab? The accountant answer is: "not if you can sell it", which is a very short-term point of view. Somebody with a longer perspective would be more interested in whether the domination of the Napa Valley vineyards by cabernet sauvignon wines is sustainable, because sustainability is related to biodiversity, not to monocultures.

Blake looks at the issue by making some comparisons between the Napa area of California and the Bordeaux region of France, whch also relies on cabernet as a principal grape. Let's look at some of the points made in the article.

First, cabernet sauvignon comprises nearly half of the vineyard area in Napa, which is certainly not a monoculture, but it is also quite a domination. How does this domination compare to Bordeaux? Actually, the comparison need to be among all of the common grape varieties, because Bordeaux has more merlot than cabernet.

A number of mathematical measurements of what is called "diversity" have been developed in science, for making precisely this sort of comparison. The idea is to reduce the various grape-variety areas down to a single number that quantifies their diversity, from a monoculture of one grape variety at one extreme to equal amounts of each grape variety at the other extreme.

The one I will use here is called the Shannon Diversity Index (see Wikipedia); and I will apply it to the vineyard area of each of the seven most common grape varieties in both Napa and Bordeaux. The Index will be a number between 0 (for a monoculture) and the natural logarithm of 7 (for equal amounts of each grape variety). The data come from Blake Gray's article for Napa, and from the Wine Cellar Insider for Bordeaux.

It turns out that Napa (1.51) actually has a slightly greater diversity of grape varieties than does Bordeaux (1.28). So, we certainly cannot yet claim that there is anything unusual about the domination of Napa by cabernet sauvignon. However, there seems to be no reason why Napa won't eventually exceed Bodeaux, if the current trends continue.

[Aside: Blake Gray makes the erroneous claim that Europe has grapes that are "disallowed" in certain regions. No grapes are disallowed anywhere in Europe; and any type of wine can be made in any region. What is disallowed is the name that can be used for those wines — names must match the definition of those names. In Bordeaux, in addition to its top seven grape types, which are Merlot, Cabernet Sauvignon, Cabernet Franc, Semillon, Sauvignon Blanc, Malbec and Muscadelle, there are also notable areas of: Petit Verdot, Carménère, Sauvignon Gris, Colombard, Folle Blanche and Ugni Blanc.]

Moving on, Blake Gray points out that Napa winemakers charge the consumer more money for their cabernet wines than do the winemakers of Bordeaux. He quantifies this claim by looking at the most popular wine searches on Wine-Searcher, for the cabernet blends of both Napa and Bordeaux. Search popularity is a convenient way to compare the wine regions, especially as it turns out in practice that the most expensive wines are the most popular searches.

Blake does not show us a picture of the dollar comparison, but we can generate one of our own. As of 18 March 2017, c. 450 of the most popular 500 searches on Wine-Searcher for both Napa and Bordeaux involve wines dominated by one or more of the principal Bordeaux red-wine grapes (cabernet sauvignon, merlot, cabernet franc, malbec). Now, that's what I call domination!

These two lots of 450 wines are the ones that I have compared in the first graph. The two lines show a running average of the Wine-Searcher average bottle price (vertically) against the Wine-Searcher search popularity (horizontally). [The running average is based on nine-year blocks.]

Napa and Bordeaux wine prices relative to search popularity

For the first 30 most-popular searches, the Bordeaux wines are more expensive than are the Napa wines, but after that the Napa wines are consistently 2–3 times more expensive than the Bordeaux wines. The exception is for the Le Pin wine from Pomerol, which is ranked 45th in search popularity but is the second most expensive Bordeaux wine. Furthermore, some rather expensive Napa wines have low search popularity, so that the Napa line on the graph goes up and down like a yo-yo.

Conclusion: a Napa cabernet will cost most of us a lot more money than will a Bordeaux wine, unless we go for the few most expensive Bordeaux wines.

It turns out that this pattern is independent of wine quality. Wine-Searcher also provides an average quality score for each wine, averaged across a number of wine critics. So, we can compare the Quality:Price Ratio for the two regions, as well.

I have done this in the second graph. Each point represents one of the 450 wines from each region, plotted with the average bottle price (vertically) and the average quality score (horizontally). Note the log price scale, which deals with the ridiculous prices of the wines from Screaming Eagle (Napa), Petrus (Pomerol) and Le Pin (Pomerol), at the top of the graph. Also, shown are the exponential price models fitted to each dataset (see the post on The relationship of wine quality to price) — this is a straight line on the graph because of the log price scale.

Napa and Bordeaux wine prices relative to quality score

The Bordeaux wines, on average, score 0.7 quality points less than do the Napa wines. However, the QPR line for Napa is consistently above the line for Bordeaux, indicating that the Bordeaux wines are generally cheaper for the same quality score. This cannot be a good thing for US wine drinkers, but is much better for the wine drinkers of France (where most of the Bordeaux wines are consumed).

Note that there is only one isolated dot below the main wines, which represents the only wine with an outstanding Quality:Price Ratio, relative to the other wines. There are, however, plenty of points above the main group, which represent poor value for money!

In other words, neither Napa nor Bordeaux has red wines that represent particularly good value for money; and it seems unlikely that this situation will change any time soon (see At what price, To Kalon?).

This odd QPR wine, incidentally, is Chateau Tour Saint-Christophe (Saint-Emilion Grand Cru), with an average score of 91 points and an average cost of US$26 — this seems to be commonly available in the USA. The property was recently renovated by Hong Kong-based entrepreneur Peter Kwok, so the wine may not remain cheap for much longer.