Is wine a perishable commodity?

WINE TALK
1

I am working up some thoughts on ultra-premium wine pricing, but first I would like to get this question clear in my head. In terms of consumer goods classifications, I have always thought of wine as a ‘perishable’ item … do you agree or disagree?

2

Disagree. The term “perishable” is usually relagated to a shorter life span than wine.

3

if a bottle of wine is a living thing then like all living things it is perishable.

4

Not if it is poorly stored.

5

I started to write up the reasons why I don’t consider wine perishable, but it occurred to me to check with the FDA*. Here’s their guideline:

FDA defines perishable food as food that is not heat-treated, not frozen, and not otherwise preserved in a manner so as to prevent the quality of the food from being adversely affected if held longer than 7 calendar days under normal shipping and storage conditions.

6

Thanks Melissa. I was about to write that I’m sure there is a definition out there.

Most things we would consume do not have an indefinite shelf life. Even the cheapest of wines will sit on a shelf for months before going bad assuming no huge temp swings or extremes. Something like a carton of milk is clearly different as is a can of Chef Boyardee to the other extreme.

7

Melissa, that definition is precisely why I am asking, or reviewing, the concept. The FDA, to put it bluntly, is mainly concerned with expiration dates, ingredient lists and calorie charts (all of which we may be required to put on wine labels soon … an exercise of which I have a jaundiced view). But there are several wider definitions of “perishable” in the economic landscape. Most references I currently find define a “perishable good” as one that declines in value and quality over time. Which, undeniably, all wines do. They may reach a state of gustatory perfection for some consumers, like fermented shark fin, but undeniably, all wines chemically deteriorate.

However, I was taught initially that another reason wine is considered a “perishable” food item is because it is good for one use only. I remember being confused by this because I thought “consumables” were, well, consumed. But the economic definition of consumable goods spans items that can be used over and over again, like clothing, watches, and cars. I was told that a head of lettuce was considered “perishable” not just because it has the propensity to rot into slime in your crisper, but because once you chop it up into a salad and eat it, it has “perished”.

Wine is certainly not a “durable” like real estate or jewels.

Is there some commodity classification for one-use items with extended longevity, like art, perfume, and wine?

8

Mary, have you tried to look at EU commodity classifications? The EU’s wine regulations might be a place to start.

9

Melissa, as always, you are fast on the draw … what are the guys doing this Sunday morning? Clearly not thinking about economics… [boredom.gif] (Dan just took a 6-unit perishable stabilizer down to the crushpad.)

The EU link concerns classifications within wine. I am curious to know what classifications, if any, apply to wine as part of a luxury goods market in a shrinking economy. What classification does wine fall in when people are looking to commerce in fine goods and/or grocery-market consumables? Because this is an ingestible product that spans both markets. Unlike most luxury goods which at least have a semi-durable life–clothing, cars, watches, shoes, leather accessories, jewelry–wine can only be actually consumed and used once. It can be admired and traded, like a work of art, based on its rarity, artistic reputation, and interest. But it can only be used once.

It can be more valuable than a head of lettuce (though in many cases worth less than a fine artichoke, and certainly worth less than truffles), but it can also be an object attractive to collectors and traders. In the context of overall consumer buying and spending, into what category does ‘fine wine’ fit?

10

I spent ten years growing 26 types of organic vegetables for four different farmers markets a week, as well as meeting a truck on Wed. to ship specialty heirloom tomatoes to shee shee restaurants in the bay area. So many times we would truck back hundreds of dollars worth of beautiful lettuce, squash, basil, and tomatoes from the markets, only to back up to the compost heap(HUGE) and dump it. Granted, it all went back in the field, but I found it a huge waste, not to mention the four hours of driving back and forth to market. So, NO, wine to me, is not a perishable commodity. [nea.gif]

11

I believe every bottle will eventually turn to vinegar given enough time, and that it is up to the human to intervene prior to this horrific demise. So, is it perishable? Yes. Is it immediately perishable? Not so much…

12

Oh, I don’t know. I would no more accept a case of lettuce being delivered from inside a 110F freight truck than a case of wine. If the fragility of it’s quality were the benchmark, then wine is indeed perishable.

13

Mary–

As a former lawyer, one thing you need to understand is that whatever the meaning of “perishable” is to the ordinary person, it may have a different meaning in the law, and in fact it may be defined differently in different legal contexts and in different jurisdictions. Thus, “perishable” under FDA regulations may not only be different from “normal”, i.e., non-legal usage, but also different from the definition under the laws and regulations governing warranties, or consumer protection statutes, for example. So to answer your question, we need to know its context, i.e. for what purpose do you need to know the definition?

14

Welcome, Bennett! I am flattered that your first post is in a thread I started. [drinks.gif]

Here’s my question in a nutshell:

I am curious about the economic category for wine, and if it is considered by economists to be a perishable consumer good. I believe it is, but I have asked myself this question before, and am still unclear on what the answer should be.

15

Thanks Mary. Flattered? Not sure why, but thanks for the welcome! Not sure how often I’ll post here–it’s getting hard to keep up with all the wine boards out there–but there does seem to be some good stuff here.

As for your question, I’ll make a stab at it (not being an economist) and say that I would think what distinguishes perishable from not is its natural shelf life under normal (i.e., not refrigerated or preserved) conditions. Goods that have a shelf life that is measured in days, or perhaps a few weeks or months, would be considered perishable. Thus fresh food, produce, meat, fish, and flowers would be perishable. Most food that must be kept under refrigeation or frozen to prevent spoilage is perishable. Canned food, however, is not, even though the can may have a “best used by. . .” date.

Using this definition, I think an economist would NOT consider wine to be a perishable good. Yes, wine can “perish” if exposed to extreme heat, freezing, etc., and the aging process itself will eventually result in the wine becoming DOA, but so can other so-called non-perishable goods stored in bottles or cans. If wine were considered a perishable, so would beer, soft drinks, and probably even bottled water, all of which strike me as unlikely to be considered a perishable in an economic sense.

I have no idea if this is right, but it’s what makes sense to me, FWIW. I am still planning on treating the wines in my cellar as “perishable”, though–I ain’t turning off the reefer!

16

“perishable commodity”

I thought that was called, happiness.

Wine OTOH is rarely just a commodity, although i once heard someone describe it as “urine futures.” [foilhat.gif]

17

Well, the economic definition of “perishable” is not that simple, either.

Hotel room-nights are perishable, as are airplane flight-seats. They are both used over and over like consumer goods, but a particular room-night or a particular seat on a flight are perishable in the sense that once that night comes or the plane takes off, that potential revenue is lost forever and the room-night or flight-seat’s value drops to nothing.

I would say that yes, wine is perishable. It has the potential to spoil. Once the bottle is opened, the inherent monetary value of the wine disappears.

It would be the term “commodity” that I might have the problem with [tease.gif]

18

Agreed. It is definitely a persihable commodity, it’s usually up to the person though as to when it will meet it’s demise. Whether thats 2 years from vintage to 80, it’s perishable as it will either spoil or be drunk.

19

I have always had a problem with people thinking that wine is a living thing. If you have living things in a bottled wine, it’s not a good thing. [beee.gif]
Wine is an evolving thing, yes. But not living.