Château de Turnpike, anyone?
I used to attend a great get-together of economists and money managers held each August in remote northeastern Maine called Camp Kotok. Comparisons with Jackson Hole or Davos may have been hyperbole, but it’s safe to say that I and the few other reporters invited seriously brought down the average net worth of the group.
Other than revealing my ineptitude as a fisherman, the most stressful aspect was filing my expense report when I got back to the office. It wasn’t cheap. To save money I’d fly to Portland (costs less than Bangor) and drive a rental car for five hours, giving others a ride, while better-off guests landed right on the lake in a seaplane. The cash tips for the fishing guides were sometimes a bone of contention with our not-so-flexible bean counters, as was the requirement that each attendee ship a half case of “good wine” to the fishing camp for the three-day event.
Each year I’d dispatch Mrs. Jakab to our local liquor store to buy some wine with the instructions that it “look expensive” but not be expensive. I was nervous the first time around that the proprietor would be insulted or that some of the attendees would turn up their noses at what I brought.
I needn’t have worried. The guy at the liquor store knew exactly what I meant and after the first year I didn’t even notice which ones were my bottles among what I’m told were some very pricey ones. More to the point, I don’t think the other guests did either–they drank it all with gusto. Of all the people one could assemble who might have felt short changed or gravitated toward one of the other bottles on offer, it should have been a bunch of oenophiles brought together because they knew all about money and how to spend it.
Have you heard about the Judgment of Paris? I don’t mean the mythical one that started the Trojan War but the infamous wine tasting in the French capital in 1976. At the time California wines were considered to be plonk and French ones the best. The result of the blind taste test by a group of the foremost wine experts showed that a wine called Stag’s Leap, vintage 1973, beat out Château Mouton Rothschild, vintage 1970, and several other noted French wines. The test was the subject of the 2008 film “Bottle Shock” starring Alan Rickman as the sommelier who hosted the contest.
More convincing to me than that episode that there’s less than meets the eye to fine wine, though, is The Judgment of Princeton. A meeting of The American Association of Wine Economists held at Princeton University in 2012 invited wine tasters to sample unmarked bottles of fine French wines versus those from The Garden State.
Now I will be the first person to stand up for New Jersey, my home for the past 21 years and a place that is way better than the reputation it gets from Snooki, The Sopranos, and the refinery-lined “what’s that smell?” stretch of the New Jersey Turnpike that so many people just passing-through associate with the state. But wine? If someone came over as a guest with a local bottle I might chuckle, but I wouldn’t say “you really shouldn’t have” unless I meant it literally.
Surprisingly, though, most New Jersey bottles were statistically indistinguishable from their French counterparts. Similarly, other studies have shown that removing the prices of bottles of wine made ordinary people unable to judge their relative quality. And those people who sniff a glass and comment on its “full body” or detect “hints of” chocolate or cinnamon or whatever? Almost certainly bullshit. While wines do have an aroma, an experimenter at The University of Bordeaux asked 54 experts to taste two glasses of wine, a white and a red, and they described them differently. The red had a “jammy” taste of crushed fruit. But it was the same wine with a flavorless red dye added.
I know all this, and even before I knew it I strongly suspected it, yet when we go to someone’s house and bring wine I still feel awful choosing a budget option. And if eating out for some special occasion and asked to pick, I scan the wine list, nod knowingly, and then always point to the second-cheapest bottle (apparently this is commonplace), or the closest one I can best pronounce, to not look like a skinflint or a rube in front of a waiter I’ll never see again.
In other words, I knowingly spend a bit extra for no reason other than to avoid embarrassment. That’s some powerful snob appeal. I often think about a humorous email that went around years back about Walmart coming out with its own line of wine. It said it went equally well with white meat–opossum–and red meat–squirrel. They were:
10. Chateau Traileur Parc
9. White Trashfindel
8. Big Red Gulp
7. World Championship Riesling
6. NASCARbernet
5. Chef Boyardeaux
4. Peanut Noir
3. I Can't Believe It's Not Vinegar
2. Grape Expectations
1. Nasti Spumante
Pretty funny. Fast forward a little more than a decade, though, and Walmart is laughing all the way to the bank after it really did launch its own brand of wine. Its quality is probably about the same as bottles in a slightly higher price range, and they clearly still make money selling it. The key might have been coming up with a name not associated with Walmart—and having practical customers.
There are people who will keep quiet about the fact that they saved a few bucks by buying the Walmart brand and then some who will be sort of proud of it, but far more of the former. I still get ribbed from time-to-time about the fact that I bought Kirkland champagne (from Costco) to serve at my oldest son’s bar mitzvah 12 years ago. It was very well reviewed–here’s a more recent writeup by Wirecutter–and it can’t legally be called champagne if it isn’t from that tiny region in France. It was a third the price of Veuve Clicquot and, sorry close friends and family, I don’t think your palates would have been refined enough to tell the difference if I had been able to paste on fake labels.
I should confess that I really don’t like wine or know much about it. I only drink it if it’s in a social situation where many other people do too. I’m not naive enough to think there is no such thing as bad wine, but the difference between pretty good and really good seems to be subtle and out of proportion to the price. Clearly expensive wine can cost more to make – terroir and oak barrels create supply bottlenecks – but that’s a function in part of people willingly paying a premium for it.
When a sommelier brings out a bottle in a fancy restaurant, how rare is it for someone to send it back? Rarer than the percentage of fancy bottles that have turned to vinegar because of some defect, I bet. I remember watching a hidden camera show in the UK in which literal vinegar was served as white wine and the woman tasting it for the table nodded sagely after swirling it around her glass.
Yet that wine you drink in a restaurant has an average markup of 200%-300%. Running a restaurant costs money, but, unlike cooking your food well, there is virtually no value added by uncorking that bottle. It is the most profitable thing for a restaurant to sell. I can detect the disappointment as our waiter at a nice place hears that Mrs. Jakab and I won’t be ordering any. We’re not big drinkers, but we are big eaters and I guess we’re basically economic free riders on the people who keep good chefs employed by overpaying for wine. Thank you, and here’s to your health!
Wine isn’t the only product where the low-end is a commodity and the high end is subsidized by snobs and chumps. People pay a third more for a Lexus than a mechanically-similar Toyota, or often a bigger effective premium than that because they stretch financially for the luxury car and incur finance charges. For wine, though, the power of clever marketing is supercharged by fancy French names, rare vintages, and the fact that alcohol is consumed in social situations. More for a woman than a man, ordering a Budweiser instead of a glass of white wine at a bar or a business reception is déclassé.
Obviously wine has been around for a long, long time and many people love it and are really into it. They also really care what people who might have better taste than them think about wine, though. Remember the film Sideways with Paul Giamatti as an uptight wine snob? It unleashed something in the wine industry called “The Sideways Effect” because he dissed Merlot and gushed about Pinot Noir.
“No, if anyone orders Merlot, I'm leaving. I am not drinking any f*cking Merlot!”
Sales of Pinot Noir surged and those of Merlot slid for years because of a fictional character’s opinion. Giamatti, in an interview, said he was at a fancy restaurant and “the wine guy–what is it the sommelier?” came out and said he had been waiting 10 years to present a wine list to “the Merlot guy.” And then Giamatti told him: “I don’t know sh*t about wine.”
Don’t be a Stu Pedasso.