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Wine competitions, judging, and blind luck

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Wine competitions, judging, and blind luckOr, as the co-author of a new study told me: “Consumers should disregard results from wine competitions, because it’s a matter of luck whether a wine gets a gold medal.”

That’s the conclusion of Robert Hodgson, a winemaker and statistician whose paper (written with SMU’s Jing Cao) is called “Criteria for Accrediting Expert Wine Judges” and appears in the current issue of The Journal of Wine Economics. It says that those of us who judge wine competitions, including some of the world’s best-known wine experts, are ordinary at best. And most of us aren’t ordinary.

Because:

… [M]any judges who fail the test have vast professional experience in the wine industry. This leads to us to question the basic premise that experts are able to provide consistent evaluations in wine competitions and, hence, that wine competitions do not provide reliable recommendations of wine quality.

The report is the culmination of research started at the California State Fair wine competition at the end of the last decade. The competition’s organizers wanted to see if judging was consistent; that is, did the same wine receive the same medal from the same judge if the judge tasted it more than once during the event? The initial results, which showed that there was little consistency, were confirmed in the current study.

More than confirmed, actually. Just two of the 37 judges who worked the competition in 2010, 2011, and 2012 met the study’s criteria to be an expert; that is, that they gave the same wine the same medal (within statistical variation) each time they tasted it. Even more amazing, 17 of the 37 were so inconsistent that their ratings were statistically meaningless. In other words, presented with Picasso’s Guernica, most of the judges would have given a masterpiece of 20th century art  three different medals if they saw it three different times.

“This is not a reflection on the judges as people, and I don’t mean that kind of criticism,” says Hodgson. “But the task assigned them as wine judges was beyond their capabilities.”

Which, given the nature of wine competitions, makes more sense than many doubters want to believe. Could the problem be with the system, and not the judges? Is it possible to be consistent when judges taste 100 wines day? Or when they taste flight after flight of something like zinfandel, which is notoriously difficult to judge under the best circumstances?

When I asked him this, Hodgson agreed, but added: “But we don’t see an alternative. But it is an inherent problem. You just want to see the competitions give the judges sufficient time to do it.”

Perhaps. But my experience, after a decade of judging regularly, is that the results seem better (allowing for this um-mathematical approach) when I judge fewer wines. That means that the competition is smaller, or that the organizers have hired more judges. Maybe that’s where the next line of study should go, determining if judging fewer wines leads to more consistent results.

Big Wine: 5 companies, 60 percent of sales, 200 brands

Call it serendipity. Shortly after my blog posts about Big Wine at the end of last year, a Michigan State study offered even more data about how Big Wine works and how it has changed the business.

The paper, “Concentration in the U.S. Wine Industry,” was compiled by Phil Howard, an associate professor who studies consolidation. After doing soft drinks and beer, he told me, wine was the next logical step.

“And even I was surprised by what I found,” Howard said. “Wine was much different than what I thought. If you go to the stores, it seems like you have all these choices, because the shared ownership is not very apparent. We wanted to help consumers understand what they were really buying.”

The study consists of two parts – third-party sales data and store visits from Howard and his graduate assistants. The former, displayed in some very nifty charts on the study website, paints a fascinating picture of market share as well who owns what labels. Three companies – E&J Gallo, The Wine Group, and Constellation Brands, account for more than half of wine sales in the U.S.

This is my favorite chart. For example, you can see how important Cook’s champagne is to Constellation Brands (about as much as Robert Mondavi, believe it not), and that Bronco, which makes Two-buck Chuck, has a bigger market share than much larger companies like Diageo and Altria, which owns Chateau Ste. Michelle.

The store visit results were even more fascinating.  Howard and his graduate assistants counted wine at 20 Michigan retailers, where they found more than 3,600 unique varieties (where chardonnay was one variety, merlot another, and so forth). Those wines came from more than 1,000 different “companies,” although, as the study noted, the ”top firms each contribute to an illusion of diverse ownership by offering dozens of brands (and hundreds of varieties), many of which do not clearly indicate the parent company on their label.”

The reason for that, said Howard, is not difficult to figure out: “A company known for producing cheap wine and not quality wine does not necessarily want to be identified with a premium, high-end brand.”

Other key points:

• The only unique varieties of wine found in more than half the retailers were Clos du Bois chardonnay, from Constellation, and Cavit pinot grigio. In other words, wine has no national brands, in the way every retailer in beer carries Bud Light and Coke and Pepsi are in every store that sells soft drinks.

• Half of the stores carried the same six varieties – Blackstone merlot, Ravenswood zinfandel, and Woodbridge chardonnay, all from Constellation, and Apothic red, Barefoot chardonnay, and Ecco Domani pinot grigio, all from Gallo. What this says about retailer selection, customer preference, and distributor clout is worth a second study.

• The top six wine companies in the U.S. accounted for more than one-fifth of the varieties found in the stores. That it’s not higher speaks to retailer determination to carry other brands, something else not seen in soft drinks or beer.

• Howard said that the variety and number of wines, as impressive as it is, would probably be even more impressive in states that are less regulated than Michigan, which has one of the tightest three-tier systems in the country.

Finally, though Big Wine isn’t as top-heavy as Big Beer, it may be headed that way, said Howard. He said the wine business resembles the beer business in the 1950s, when 30 companies dominated the market. Today, just two beer producers — AB InBev and Molson Coors — account for three-quarters of all sales.

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