Wednesday, December 15, 2010

The Provenance Paradox

Regular readers know that I like to find wines that are “off the beaten track”. I look for wines made from lesser-known traditional varietals, unusual blends, or underappreciated regions. Apart from the delight in finding something new, I've found some of the best value in wines that aren’t as well-known, especially when compared to wines that are over-hyped.  It's something that we all know instinctively, that you can find good value if you're willing to look for it.

This month, Harvard Business Review has an interesting article entitled “Why You Aren’t Buying Venezuelan Chocolate” that validates that approach. (That sound you hear is me patting myself on the back.) As the author, Rohit Deshpandé, writes,
A product’s country of origin establishes its authenticity. Consumers associate certain geographies with the best products: French wine, Italian sports cars, Swiss watches. Competing products from other countries—especially developing markets—are perceived as less authentic. Even when their quality is on par with that of established players, the developing-market firms can’t command a fair price. The lower price, in turn, reinforces the idea that the offering isn’t as good and that the region doesn’t make premium products.
Professor Deshpandé calls it “the provenance paradox”.

Here’s a short (13-minute) video interview with Professor Deshpandé, with examples of the challenges faced by companies like Concha y Toro (one of Chile’s best wine-makers) and how other companies, like Corona beer, overcame the challenge.

For anyone who’s trying to bring lesser-known wines into the marketplace, whether a Canadian winery, an importer, or as a sommelier working with clients in a restaurant, it’s a fascinating examination of what you’re up against.

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