Paying for the Brand

There aren’t many product categories with the price variance of wine. Offers range from top-of-the-line bottles which sell for a couple of thousand dollars through to scrapping the bottom of the wine barrel with bottles for a few dollars. So what is the determinant of the price? This week’s Sydney International Wine Competition has proven that, surprisingly, it is not quality, it is branding.

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I have never been a big fan of wine. No matter what the bottle cost I would generally just prefer a water, orange juice or soft drink. So I am not really in a position to decide upon the quality of this popular beverage. Luckily, I don’t have to.

The Sydney International Wine Competition brought together 14 well-renowned local and international judges to decide upon the best selection of wines currently on the market. As they worked their way through a blind tasting of 2000 different bottles of wine, they came up with some rather surprising results. While you would imagine that most of the award winning wines from this blind tasting were only available at the most exclusive cellar doors, they are actually a little bit more accessible.

In fact, they are a lot more accessible. They are specially made for and stocked at your local Aldi.

Taking out the award for Best Red Table Wine was the Tudor Centre Victorian Shiraz available for $12.99. And if that is still a bit pricey, Aldi’s Cabernet Savignon blend ($6.99) and Tempranillo ($4.99) were ranked among the top 100 wines.

So if these wines have been declared some of the best in the world, then why are they being stocked in Aldi? It comes back to the brand.

We often use brands as a shorthand for determining expectations. If you are given a Target shirt, you would have a rather different expectation of the product compared to a shirt from Ralph Lauren. Same with cars. If you were to drive a Toyota, there would be a markedly different expectation in the product compared to a Rolls Royce.

The same thing happens with wine.

Unlike this blind tasting, consumers see the brand when they drink wine. That brand creates a certain expectation in the consumers’ heads as to the quality of the product and this can sway the overall experience. Being provided with an incredibly high end branded bottle of wine would result in the expectation that the product is wonderful – and this can create an experience that is already skewed towards being wonderful. On the converse, drinking a very cheaply branded bottle of wine could already convince the consumer that it will not reach any of the lofty standards of its better quality competitors.

Brands are important across every category, but this recent blind tasting proves the extent that they play in the wine industry. While the products may be of comparable quality, an Aldi brand significantly cheapens the product while a high end brand adds thousands of dollars.

 

 

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