Once you decide to take a closer look at the fine wine market, you immediately face a crucial question: what constitutes 'fine wine'? Ask five people in the wine sector and you are likely to receive five rather different answers.
A Tale of 1001 Questions
Does it depend on a wine’s quality level – and if so, who and what defines a ‘fine quality’? Or on its ability to express terroir, and if so is every terroir-driven wine fine? Is it a wine’s reputation and accolades? Does it depend on its retail price? What about looking at its fungibility and value on secondary markets by examining the catalogues of the world’s main auction houses or by using the work of marketplaces like Liv-ex that have the objective to make “fine wine trading more transparent, efficient and safe"?
Just Icon Wines?
When looking at icon wines such as Château Latour, Domaine de la Romanée-Conti, Dom Pérignon, Sassicaia, Tignanello, Opus One or Penfolds Grange, most of us will agree that these strong brands fulfill all of the above criteria. Should the category of fine wines be restricted to icon wines then? Can it be as simple as that?
If we assume, as a starting point, that fine wines are branded products, their endeavour is to create strong and unique associations in the mind of their target group, in order to win competitive advantages and increase both their customers’ loyalty and willingness to pay. Strong and unique associations are created by generating non-imitable value for your customers.
Orientation and Trust
All strong brands fulfill an orientation and information (or lighthouse) function – must fine wines have a sense of place and be quality benchmarks for their respective regions?
All strong brands fulfill the trust function due to their notoriety, competence, and identity – must fine wines be age-worthy and reliable investments? Is it being part of a renowned classification or marketplace like the Place de Bordeaux that should be the decisive aspect of our definition?
- International recognition:
Strong brands are often distributed on a global level; must fine wines have an international reputation?
All this does not answer the question, how new, still unknown wines can fall into the category of ‘fine wine'. What if they are fine but yet wait to be discovered?
Brand, Region and Price
Not all strong wine brands are necessarily fine wines. Take Barefoot with one of the highest global wine brand values – hardly famed for being a fine wine brand. Or think of Bordeaux – evoking strong associations in many a wine drinker’s mind, and being without doubt the origin of some fine wines indeed. But the vast majority of Bordeaux’s annual production is of acceptable or good quality, neither meant for aging nor for investment, and sold below 5 EUR in discounters or supermarkets.
If an end consumer who normally pays between 3.50 and 4.99 EUR for a bottle of wine in the supermarket, is willing to pay 11.99 EUR for a bottle intended to be drunk on a special occasion, this significant markup is most likely justified by his convincement to treat himself to a bottle of really fine wine. And anyone who has ever presented his or her wines at a consumer fair in Switzerland knows to interpret the praise "that's a very fine one" as 'it tastes very good.’
Contradictory Approaches? It’s All a question of Purpose…
The different approaches as to what a fine wine is, are certainly very diverse and even seem to be quite contradictory at first glance. Yet, if you think about marketing basics, they are actually not that contradictory at all – as they reflect the needs and wants of different target groups. A wine lover (pronounce: wine geek) has other needs than someone who pursues the goal of increasing his wealth by investing in fine wine, and a Champagne prestige cuvée served at a business dinner in a high-class restaurant again serves another purpose.
The Mission of Finding Objective Criteria
Is the definition of ‘fine wine’ totally subjective then? Most of us will now resolutely shake our heads. But what exactly do we base this reaction on?
- Experience in the wine business:
Should it be based on the verdict of wine critics and the points a wine receives? What critics should then be considered to limit the level of subjectivity and again, where would that minimum be that a wine needs to achieve to be considered fine wine?
Do fine wines have a generally recognized minimum retail price? Can price bands like premium, super-premium, ultra-premium, etc. be of help then? How much would be the minimum shelf price of a fine wine bearing in mind the significant discrepancies between some regions compared to others: fifty dollars, for example, might get you very far in one region, while it might not get you anywhere near to the top shelf in another.
We have pointed out some of the difficulties in finding a common definition of fine wine, but also offered a path for rapprochement. Yet it was just the beginning of the journey. This series of articles will take a closer look at the different facets of the fine wine world, from the different wants and needs of the different target groups via La Place de Bordeaux & wine investment companies to the purposes icon wines fulfill from different producers’ perspectives. We will speak with experts sharing very different points of view: Thought leaders and decision-makers of the wine industry, luxury marketers, investment brokers, and other stakeholders of the sector.
To find out, if it is possible to define fine wine on the basis of objective criteria in such a general way that wine geeks, investors, and end consumers with low wine involvement alike can agree on.
Let’s start with YOUR opinion – click HERE for a brief survey.
To answer these questions won’t take you any longer than 5 minutes. If you find the survey useful, please send it to other people working in the wine industry: https://www.surveymonkey.co.uk/r/WhatIsFineWine