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Evaluating the worth of nascent old vine cues for South African wines

David Priilaid (School of Management Studies, University of Cape Town Faculty of Commerce, Rondebosch, South Africa)
Jonathan Steyn (Graduate School of Business, University of Cape Town Faculty of Commerce, Rondebosch, South Africa)

International Journal of Wine Business Research

ISSN: 1751-1062

Article publication date: 31 December 2019

Issue publication date: 30 April 2020

Abstract

Purpose

In increasingly competitive markets, opportunities exist to meaningfully differentiate product offerings by cue signalling the claims of emergent categories. Therefore, and within the context of wine sales, the purpose of this study models the supply-led price importance of nascent, extrinsic old vine (OV) cues for South African wines to establish whether to what extent and how producers prioritise such nascent cues relative to more established extrinsic cues of worth.

Design/methodology/approach

A data set was compiled of 159 South African wines with OV category cues signalled on front labels, back labels or via marketing material. The play of contending cue variables was computed through an ordinary least square hedonic pricing model.

Findings

In addition to the contribution of established cues such as aggregated critic ratings, grape varieties and area of origin, this study confirms that vineyard age contributes significantly to wine price, particularly when signalled on back labels.

Practical implications

In price setting and positional models, such as brand extensions, the findings prove useful in understanding the inherent value of nascent cues and specifically vineyard age, relative to competing established wine cues of worth.

Originality/value

This study extends the wine pricing theory by validating the viability of nascent OV cues in the modelling of a wine’s value.

Keywords

Citation

Priilaid, D. and Steyn, J. (2020), "Evaluating the worth of nascent old vine cues for South African wines", International Journal of Wine Business Research, Vol. 32 No. 2, pp. 283-300. https://doi.org/10.1108/IJWBR-04-2019-0029

Publisher

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Emerald Publishing Limited

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