Home Wine Business Editorial Finance Dreamers and True Believers: A Wine Industry in Denial

Dreamers and True Believers: A Wine Industry in Denial


Therapists weigh in on factors that influence the industry’s glass-half-full mindset.

By Jeff Siegel


The litany of bad news — falling sales, attacks by health officials, overproduction and declining interest among younger consumers — would seem to be enough to convince anyone associated with the wine business that a crisis is at hand. But that’s not necessarily the case.

Ask around, and it seems there are more than a few people, and even companies, which (for lack of a better term) are in denial about the troubles facing the wine industry.

Belief Bias applied

Turns out, there’s a psychological term for their behavior, called “belief bias,” and it’s not all that uncommon.

“There are a few reasons for ignoring what’s going on, and it has parallels to what some people believe about climate change,” says Nikki Blacksmith, Ph.D., the co-founder and CEO of Blackhawke Behaviour Science in Washington, D.C. “They hear the data and they think, ‘That’s not realistic,’ because it conflicts with what they believe to be true. 

“This is true even of some of my friends who are scientists. If they believe climate change can’t be true, then the evidence won’t convince them. It’s the same thing with politics: people believe what they want to believe.”

In other words, say psychologists, we’re more likely to rely upon prior knowledge and personal beliefs than to accept a conclusion as valid when it conflicts with that prior knowledge. In this case, the wine business has been thriving for more than 20 years, so it can’t possibly be in difficulty.

Can it?

“Like people who open restaurants or get married, most of us think we’re special and the statistics won’t apply to us,” says Oliver P. John, Ph.D., professor of psychology at the University of California Berkeley. He’s referring to the numbers that say about half of new restaurants fail in their first year and that half of first marriages end in divorce. “There’s lots of psychology research that shows this kind of self-enhancement bias.” 

More possible reasons

Biases, such as belief and self-enhancement, may not be the only psychological conundrums at play here, say those psychologists interviewed for this story. It’s also important to note, says John, that “in psychology’s technical language, we wouldn’t say ‘denial,’ because [that implies] people are unaware of the risks and issues. But if you ask them, they won’t say these issues don’t exist in the industry as a whole. [It’s just that they believe those issues] don’t apply to them.”

Possible other factors at play:

  • Confirmation bias, in which we look for sources or statistics that reinforce our beliefs and that contradict the bad news. This is a common occurrence in much of the wine trade press, where stories emphasize the “good” news, with headlines such as, “A Big Harvest of Top-Quality Grapes Is Good News for Producers and Consumers of California Wine.”
  • Information overload, in which we are overwhelmed by so much bad news that we don’t know what to do … so we don’t do anything. “We can’t move forward,” says Blacksmith. Here, procrastination is bad enough, but can also make it more difficult to eventually acknowledge the problem.
  • Optimism bias. “There’s lots of evidence here, too,” says John. “As with global warming, we somehow hope it’ll work out or we’ll figure it out.” So, he says, we figure we really don’t need to worry about the implications of all the bad news, since it will all work out in the end.

A case of “Not me”

One condition that may be especially applicable to the wine business is that so many people in wine were successful in other fields before entering wine or have long track records of success in wine. Hence, when a downturn comes, they don’t necessarily think it will affect them (given their past success).

“In technical terms, they have developed higher self-efficacy,” says John. “They’ve experienced that they can succeed beyond the odds and overcome obstacles, and they carry that with them. They may not take into account that this industry is different. In other words, they are over over-generalizing based on their earlier successes.”

Finally, says John, “There are probably status considerations as well. Wine is cool and sophisticated; it’s not like producing milk.

“What’s the goal of the people starting, maintaining and investing in vineyards and wineries?” he asks. “Do they really see this as a way to get rich? For many, I think, it’s a project and labor of love. ‘I happen to love what I do, and we will still persist even in the wake of bad news.’ That’s the value function in several models of action choice: we are more likely to do things we value or love.”

Which, no doubt, can make up for lots of bad news.


Jeff Siegel

Jeff Siegel is an award-winning wine writer, as well as the co-founder and former president of Drink Local Wine, the first locavore wine movement. He has taught wine, beer, spirits, and beverage management at El Centro College and the Cordon Bleu in Dallas. He has written seven books, including “The Wine Curmudgeon’s Guide to Cheap Wine.”



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