Researchers outline new approach to predicting the release prices of Bordeaux wines
A new report published by researchers M. Hakan Hekimoglu of Rensselaer Polytechnic Institute and Burak Kazaz of Syracuse University's Whitman School of Management outlines a new approach to predicting the release prices of Bordeaux wines (known as En Primeur prices) using weather information and the Liv-ex 100 index. According to their models, we can expect slight price increases this year, on average, for the 2017 vintage wines.
M. Hakan Hekimoglu, Ph.D., is an assistant professor of supply chain management at the Lally School of Management at Rensselaer Polytechnic Institute. His publications on wine analytics are considered to be highly influential by wine distributors.
Burak Kazaz, Ph.D., is the Steven R. Becker Professor of Supply Chain Management and the Laura J. and L. Douglas Meredith Professor of Teaching Excellence, and serves as the Whitman Research Fellow at the Whitman School of Management at Syracuse University.
"Our goal in this report is to provide insights regarding the impact of weather and market fluctuations in the release prices of fine wines and explain how analytical models can be used to determine and/or predict those prices," said Hekimoglu.
According to Hekimoglu, the research will add transparency to price dynamics. It will help winemakers in their critical decision of determining the best price to charge. The work will also assist buyers (e.g., negociants, distributors, restaurateurs, collectors) about the appropriateness of the En Primeur prices.
Working with data from the London International Vintners Exchange (Liv-ex), a global exchange for fine wine trade based in London, the report, titled "Wine Analytics: The Impact of Weather and Liv-ex 100 Index on En Primeur Prices," predicts a 2.02 percent increase for the First Growth and a 1.47 percent increase for the Left Bank winemakers in Bordeaux.