Saturday, November 7, 2009

Jorray's Theorem: How to find great value wines without tasting them first

In a previous article, I discussed the strategy that we use at Spirit of Wine to identify great wine values. In this article, I want to give you a technique to find great wine values in wines you've never even tried before!!

Sounds like hocus-pocus, right? Not quite... actually it's quite simple.

The Basics

First step: find a wine reviewer whose tastes you feel are similar to yours. So, whether it's Wine Spectator, Wine Advocate, Wine Enthusiast, or - ahem - Spirit of Wine, keep in mind any wines you might like to try which have ratings of at least 90 on a 100-point scale, or at least three stars on a five star scale.

Those wines are the quality wines. But it does not necessarily mean they are the value wines.

To find the value wines, you've got to add price into the mix. I will describe the technique for doing this in U.S. dollars, but it will work with translation to any currency.

100-Point Rating Systems

First, for 100-point rating systems, discard the leading "9" for the wine that interests you (a wine that scored at least 90 points, remember). This leaves you with the single digit to the right of the "9". So, for instance, if you like Jay Miller's scoring system, and Jay rated a certain wine 92 points, remove the leading "9" and you're left with the "2".

Now multiply that single digit by 10. So, in this example, the 2 becomes 2x10 = 20. That result becomes your target price in dollars - in this case, $20.

Now, if you can purchase your target wine in the vicinity of that target price - ie, for around $20 - it is a great value. If you can get it for less than that price, it is a screaming value.

Now add $10 to the target price. That becomes your upper limit price - in this example, $30. If you can buy your wine for somewhere between the target price and the upper limit price - in this example, for somewhere between $20 and $30 - it is a good value.

Above the upper limit price, your wine is not a particular value. It is still a quality wine; it is just not a value wine. So, using our example, a 92 point Jay Miller-rated wine selling for $35 is not considered a value wine.

Once you get the hang of this, it's easy to calculate the value equation in your head for any rating score. So, if Robert Parker is your preferred rater, a wine rated 95 points by Parker is screaming value below $50, a great value at $50, and not a particularly good value above $60.

A 90-point wine is a bit of a special case. 0x10 = 0, so your target price is around $0. It means it is impossible to get screaming value wines at 90-point scores; but at prices in the low single digit dollars, you can get great value wines, and up to around $10 you still have a good value wine.

5-Star Rating Systems

Many rating systems - including Spirit of Wine - use a 5-star rating system with very specific meanings associated with each star. You can see those ratings for Spirit of Wine here. Other 5-star rating systems may use other descriptions.

Using a 5-start rating system, your first step is to consider wines in the 3, 4 and 5- star categories. Based on these, your best value wines will be those whose categories of price are at least two categories below the number of stars. To determine the categories of price, use the Spirit of Wine price scale:

: (<$12 U.S.)

: ($12-20 U.S.)

: ($20-35 U.S.)

: ($35-50 U.S.)

: (>$50 U.S.)

Now, if the number of stars is two greater than the number of $ signs, you have a great value wine. If the number of stars is two and a half (many 5-star systems allow half-points or pluses/minuses) or three greater than the number of $$ signs, then you have a screaming value. If the number of stars is one and a half greater than the number of $$ signs , then you have a good value wine.

So, for instance, a wine that rates three stars and sells for $11 (equal to one $ in the chart above), has a star rating that is two above the price rating, and is thus a great value wine.
A wine that rates four stars and sells for $11 has a star rating that is three above the price rating, and is thus a screaming value wine. Here's an example of one of those from the Spirit of Wine system, the Hardy's Whisker Blake Tawny Port.

20-Point Rating Systems

Sometimes you run across a 20-point rating system, often with fractional scores, like 18.5. To find value wines among these, I suggest that you use this simple approach: Multiply the 20-point rating by 5, then use the 100-point system approach as described above.

So, for example, suppose you see an 18.5 point wine selling for $26. The 18.5 multiplied by 5 becomes 92.5. Dropping the "9", you get 2.5. Then, multiplying by 10, you get 25. So $25 is your target price. At $26, the wine is just about at the target price, so go ahead and call it a great value. See? Not so hard.

I hope this is useful to you as you extend your reach and consider value wines in categories you may not have had the willingness to explore before.

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