To sell wine, the wine being of good quality is not essential.
In fact, selling mediocre wine is easy; selling bad wine is easier still. Not easy in the sense that it requires no skill or moat, and supermarkets do it so well— easy in the sense that it can be sold in the same way they sell butter, tea, or soap. They put a bottle on the shelf with a simple label showing a terraced vineyard, for £5.99: “Merlot from the Chile a wonderful red from the heart of the Colchagua Valley.” Or: “Oxford Landing Pinot Grigio, made with 100% natural fermentation.” Add a sticker with a bronze medal from an unknown competition and, there you go, you’ve created a £6.99 wine — a “brilliant cherry-red Rioja.”
My sister-in-law once went to a newly opened high-street wine shop, bought a bottle of red for £15, and didn’t feel it tasted sufficiently different from the Sainsbury’s bottle she usually gets across the street for half the price, she told me. The wine shop closed down one year after opening.
That’s when I thought: it’s hard to sell good wine.
The difficult part begins when you try to sell people good, decent wine, beyond a certain price threshold — which depends on the supermarket and the person but is probably around the £10–£15 mark. It would be easy to dismiss what my sister-in-law said as the view of someone who’s not that into wine. But the fact that it takes years, decades, of training for experts to tell a truly good wine from a bad one says a lot about the challenge of selling quality.
What makes good wine hard to sell at scale is also what makes it interesting: there are hundreds of thousands of small producers, millions of wines, and it’s impossible to know them all. Once you move beyond “Merlot from Chile”, but have not yet entered the realm of cult wines, signalling quality to customers becomes difficult.
Talking in depth about the wine rarely helps. As one Reddit user put it: “Almost no one cares about wine the way you care about wine. I bet that a detailed tasting note has never gotten you laid.” People don’t want long explanations — or, more to the point, they don’t know what to do with them. What does it mean, practically, that a wine sat in 225-litre French and American oak to “shape” it? They still need a quick way to know which bottle is better while standing in the supermarket aisle.
In other words, they need a signal.
In a market where buyers have less information than sellers, the two sides can solve the problem of asymmetric information if one party sends a credible signal that reveals something relevant about the product.
This, in game theory, is called signalling.
Peacocks are the classic example, not because their tails are beautiful but because the tail acts as a handicap. If tails are costly, and a peahen knows nothing about two peacocks except tail size, she can infer that the peacock with the bigger tail has greater unobservable quality.
In wine, a cue for higher quality is the word Riserva or Reserva (and Gran Reserva), suggesting longer ageing and therefore, presumably, better wine. Exact rules differ by region — Rioja Reserva, for example, requires three years of ageing with at least one in 225-litre barrique; Chianti Classico Riserva needs 24 months with at least three in bottle — so the strength of the signal isn’t uniform. But, as with peacocks, the bigger the tail — the more ageing — the higher the cost. Because extra ageing is expensive, it only makes sense if the wine can sustain it.
Stefano Chiarlo, president of the newly founded Nizza DOCG, told me that adding the Riserva category was a deliberate strategy to send a clear message: “Nizza is a complex, structured wine with genuine longevity.” It helped shift perceptions of Barbera away from its easy-drinking image.
The exact cost depends on region and producer, but a rough estimate — based on a conversation with Sergio Bucci of Vignaioli del Morellino — goes like this:
A good barrique costs around €1,000 and can be used new or seasoned. Assume it’s used once: after losses you get 200 litres of wine, so the barrel cost is €5 per litre. Labour and electricity add €0.40 per litre. Storage costs €6 per month per barrique — about €0.40 per litre per year. Financing adds another €0.30 per litre if you borrow at 5% on €5.80 (barrel + handling + storage). That’s roughly €6 per litre, or €4.50 per bottle. If you use the barrique three times, the additional cost drops below €2 per bottle.
Bottle ageing is cheaper but still significant. Storage might cost €6 per month per pallet (600 bottles), or €0.12 per bottle per year. The real cost is the so-called opportunity cost: if a wine could sell now for €10 but doesn’t, the producer must finance that cash flow, adding roughly €0.50 per bottle in interest. The total cost for an extra year in bottle is around €0.62 per bottle.
Why mention cost at all? Because signals only matter if they’re costly to send — and those costs must show up in the shelf price if the signal is real.
As Antonio Cesari of Brigaldara notes, while “Riserva” can nudge consumers towards a perception of higher quality, “Superiore” in Valpolicella does almost nothing — because the claim carries too little weight, and the signal isn’t credible.
Strong brands don’t need these signals as much. With enough marketing — and years of consistent work — they reduce information asymmetry. Vega Sicilia doesn’t need to use the Gran Reserva on the label; everyone knows it releases some of the longest-aged reds in the world. One powerful brand can even elevate an entire region, lessening the need for formal signals.
The greatest risk to signalling is cheating. Too many “Riserva” or “Reserva” wines that aren’t actually better will collapse the signalling system. Every dishonest signal weakens its integrity and reduces its effectiveness. The same applies to vintage Champagne: if “vintage” is supposed to mean only top years, but it appears in most years, then vintage and NV will eventually be perceived as similar — and not worth the premium. And, of course, to the endless stream of meaningless medals and inflated scores. (It may already be too late for those.)
Many people doubt hierarchical systems, and with good reason! Prescriptive European rules have flaws. There’s no guaranteed link between longer ageing and higher quality; different wines — and even different vintages of the same wine — need different ageing.
It’s easy to say that good wine isn’t bought in supermarkets, or that scores, medals and hierarchies don’t matter. But few spaces are as daunting as the supermarket wine aisle. The information asymmetry there is one of the biggest sources of frustration and embarrassment for buyers, something companies like Vivino have capitalised on. In an ideal world, we’d communicate exactly what’s in each bottle without wasting anyone’s time.
Until then, we have signals: imperfect, sometimes misleading, yet still useful in guiding people towards better wine — provided they remain costly and credible.
Photo by Chinh Le Duc on Unsplash