Editorial

Citation

Bruwer, J. (2016), "Editorial", International Journal of Wine Business Research, Vol. 28 No. 1. https://doi.org/10.1108/IJWBR-01-2016-0001

Editorial

Article Type: Editorial From: International Journal of Wine Business Research, Volume 28, Issue 1

Welcome to IJWBR’s first issue of 2016.

In this bumper issue, International Journal of Wine Business Research (IJWBR) provides five articles focusing on six wine countries: Germany, South Africa, France, Italy, Spain and Australia. These articles make theoretical and applied contributions and fit nicely together to contribute to greater understanding of wine business management, wine marketing and wine consumer behaviour in general.

The first article, authored by Dressler, investigates how strategic management helps to create a reputational profile for German wineries. The study examines three different wine guides to assess reputational effects of German wineries for two endogenous proxy variables: quality and price. The research includes 826 wineries with ratings for three consecutive years (6,229 quality ratings) and explored 4,713 prices resulting in achieving coverage of about 10 per cent of German wine estates with direct sales to consumers and covering all German wine regions. Descriptive and regression analyses examine individual and collective reputational effects for jury grades as proxy for quality and price as the dependent variables. Assessing the jury grades of the renowned German wine guides as quality proxies using an ordinary least squares (OLS) regression model delivers strong support for reputational effect. More specifically, for collective reputation, region and cooperative memberships strongly matter, whereby region can be a competitive disadvantage and membership shows superior impact. Being a private but managed winery and belonging to a closed quality circle maximizes quality reputation. Germany specificities and illustration of the obstacles of free-ridership are also provided.

Next, the article by Priilaid, gives IJWBR a rare opportunity to publish an article on an alcoholic beverage other than wine, in this instance, spirits. Although whisky is largely regarded as a luxury good, within South Africa the product is typically sold in large-volume discount stores. This luxury-product-to-discount-store juxtaposition presents certain problems, not least of which is how best to competitively promote this premium product without degrading its value in the process. An OLS regression model is developed from a data set of 122 whiskies drawn from the catalogues of two large South African discount retailers. It was found that age effects as they relate to single malts and mass produced grain whiskies offer the greatest explanation of price, whilst scarcity effects are observed, along with the claims of retail exclusivity which are found to reduce product value significantly. Country-of-origin and packaging however have low to negligible effects. This research extends our understanding of how whisky attribute cues explain their underpinning prices; a form of analysis that could also be extended to other aged high alcoholic content drinks such as port, sherry, rum and bourbon.

In the third article, Cardebat and Livat discuss the rather contentious issue of whether experts’ ratings of (French) wines is merely a function of their personal taste, or not. Grade equations are estimated for five well-known wine experts and a range of 62 Bordeaux fine wines over a nine-year period. The appellation of origin is considered a measure of the typical taste of the wines, while the experts can be viewed as assessing the objective quality of a wine and/or expressing their own idiosyncratic preferences with respect to the type of wine. The study finds that when controlling for objective factors, expert opinions vary systematically in terms of their preferences for various appellations of origin. Ratings vary among experts, such that some statistically significantly favour wines produced in specific areas, indicating their own taste preferences. Thus, preferences matter in expert ratings and would seem to suggest a continental variance. The lack of consensus among wine experts should not necessarily be viewed as market inefficiency. If consumers find the “right expert” reflecting their own tastes, as in the case of cultural goods, they may not necessarily experience a welfare loss because of expert opinion heterogeneity.

In the fourth article, Sellers-Rubio, Alampi-Sottini and Menghini attempt to estimate the productivity change of companies operating in the Spanish and Italian wine sector between 2005 and 2013, and to decompose these into efficiency changes (catching-up effect) and changes because of frontier shifts and interpret these as technical change or technological progress. The findings are based on the estimation of the Malmquist productivity index for a sample of 622 Spanish and 609 Italian wineries (n = 1,231). The results show very low efficiency levels for the wineries under study. Spanish and Italian wineries show a decrease in their average annual productivity for the period of time analysed. The results show high levels of inefficiency in the Spanish and Italian winery sectors and a slight decrease in the average annual productivity among the firms analysed. Efficiency improvements may be achieved if the inefficient firm is able to learn better production routines, develop new processes or adopt new technologies into their production process. From a practical viewpoint, managers should think about the methods and processes available to improve production without worsening quality.

The final article by Sjostrom, Corsi and Lockshin makes a unique contribution by comparing three product categories (wine, spirits and perfume) in terms of what characterizes luxury products. Using a sample of 431 Australian consumers, it uses best-worst scaling to measure the associations between different attributes and the concept of luxury, while the pick-any or check-all-that-apply method is used to measure the association of different attributes to different price points within each product category. Another element this research investigated is the price points at which consumers begin to consider a product to be luxury/premium. The findings are consistent across the three categories investigated, i.e. “premium quality”, “authentic/trustworthy brand” and “good brand reputation/status”, which are much more associated with luxury than with regular brands. “Luxury”, “premium”, “antique/old vintage”, “limited production/edition” and “premium price” consistently cluster around the highest price point in each category, while the other attributes tested did not. The research also added two attributes to the list of the 21 attributes that previous scholars have noted to be associated with luxury/premium products in the wine and spirits categories.

Johan Bruwer

Editor-in-Chief, School of Marketing, University of South Australia, Adelaide, Australia