Coming home from a Burgundy tasting, the wife and I got into an interesting conversation (read: argument) in the car about perceived value when it comes to wines that are not really “ready to drink” upon release and are expected to improve with many years in the bottle.  Certainly, in America we are  often all about instant gratification which has caused some of the techniques that wineries now employ to produce the type of homogeneous wines that are readily drinkable at release, but are maybe lacking in longevity and true representation of style, variety or terroir.  Don’t get me wrong, there are many good/great wines being made out there that are drinkable now, soon after release, and it’s the consumer’s prerogative to spend their money on something they will enjoy sooner than later.

Add to this that often some of these old world wines that age gracefully for years often come at a higher price.  The point being made is that for the money and in this crappy economy, why would one not want to spend it on something they can enjoy now or at least in the near future instead of waiting 10 years, assuming they’re not in it for investment purposes?  Helping the value equation a little bit is the fact that there are a lot of good deals out there now due to the economy and depending on vintage that you may be able to take advantage of.  This means you may be able to buy an older vintage that’s closer to the peak drinkability timeframe now and reduce that wait time for less money than in the past.  In the case of Burgundy, I understand you can find some fabulous wines with a high QPR (Quality:Price Ratio).  But, that still doesn’t fix the fact you may still have to wait a little while for some of those wines to age to truly enjoy and experience what was intended in that wine.

If you recall from Finance class, the time value of money concept showed us that money available today is worth more than that money in the future.  However, concepts of perceived value and utility come into play which include intangible benefits such as pleasure, satisfaction, or quality and everyone’s perception of these is different.  To be clear, I am talking about how a consumer who is interested in drinking this wine will value it.  Many if not most of these ageable wines do, in fact, increase in market value over time, but that’s not what I am attempting to describe here.  Essentially, Value = Benefit – Cost and there is some level of benefit for some level of cost at which the perceived value the consumer will receive is high enough to warrant the purchase today.  Time affects the benefit side of the equation both positively and negatively… in some of these wines as time increases, the resulting quality of the wine and satisfaction you receive when you drink that wine increases.  However, the fact that you have to wait for some period of time in the first place, in my opinion, negatively affects the benefit for some consumers.  Or, rather, you can categorize your time as a cost, possibly.

How does one rationalize the Value concept in their minds when deciding to purchase a bottle of wine of this type?  Does the consumer have to be educated to some extent on what they may be missing, the romance of old world tradition, style and terroir and that good things come to those who wait?