When I put on my academic hat, I become an ethnographer. That’s essentially a fancy term for a journalist, a story teller. It’s the opposite of what most people consider “science,” but it is probably very useful for explaining large phenomena, such as the Covid-19 pandemic, in close to real time.
Recall what happened: The disease came roaring out of China, exploded in Italy and what we learned was two things: First, it was exceptionally deadly, and, second, older folks were at the most risk of dying. That, essentially, is all we knew as the U.S. began to grapple with stopping the spread.
Public health officials and the politicians who relied upon them stumbled badly early on, using “the science” to explain what was happening and how to stop it. The problem was the “science” they quoted was not about this particular virus but was generalized from other viruses. So, we were told initially, that we had to wash our hands, thoroughly sanitize all surfaces, etc. When that didn’t stop it, politicians decided to shut down much of the economy. Except that didn’t stop the spread of the disease. (Forbes reported more people have died of Covid thus far that in all of 2020.) But it did, we believe, set the stage for a dramatic acceleration of inflation which will has for years.
Not everyone stumbled, of course. Five countries in Asia, including China, Japan, Korea, Singapore and, I believe, Thailand, adopted a radically different approach, doing massive testing, mandating masks. but allowing bars and restaurants to operate at full capacity, sports events to proceed, etc. That approach was adopted by a relatively handful of U.S. colleges and universities that did extremely rapid testing.
For instance, according to The Wall Street Journal, 108 New England colleges and universities tested students twice a week, got results back in less than 24 hours and isolated or quarantined those who had the disease. Those schools had a positivity rate of 0.2%. Indiana University initially tested all students weekly and had a positivity rate of 0.3%. IU’s campuses became known as the safest places in Indiana to be.
Relying upon the standard “scientific” approach that’s used, for instance, to test new drugs didn’t work. What did work was to observe the results of a great “natural experiment,” which involves “using situations in which chance events or changes result in groups of people being treated differently.” The three economists who explained this received this year’s Nobel Prize.
We’ve seen natural experiments before. For instance, the famed 60 Minutes “French Paradox” episode was a report on a natural experiment: Frenchmen who ate everything the U.S. Government said they shouldn’t eat but also drank red wine had lower cardiovascular death rates than other nationalities. We’ve seen something similar in research that demonstrated dramatically lower death rates among people who avoided eating meat.
It turns out, we think, that natural experiments are a great way to explain what happens. But to understand why, we need the tools of modern science. Why do wine drinkers have fewer deaths from heart than others? Likewise, to determine which possible vaccine is best for preventing Covid-19 requires the sort of double-blind studies that the Food & Drug Administration relies upon.
What does all this mean for wine, beer and spirits? Wine Intelligence notes that “the past 20 months have, very unexpectedly, given the world possibly the largest natural experiment that we’ve ever seen – collectively, a global shutdown on the way we were living pre-2020. We have been able to track and monitor, via this enforced natural experiment, how consumers have changed their behaviors. What happens when you can’t go to a store in the way you used to? What happens when you don’t want to go to a store in the way you used to? What happens when you limit socializing and access to the on-premise?
“For beverage alcohol in general, and wine in particular, where much of our consumption is done in social settings, it’s critical to understand the impact of this natural experiment – what’s happened in the past, what’s happening now, and how can this help us understand what will likely happen in the future. Below are two observations so far.
“Large segments of wine drinkers who occupy the middle ground in most markets – interested enough in wine, but not obsessive – have had less in-person exposure to a range of wine brands. The resulting impact has been a reduction in awareness of mainstream wine brands, although market data suggests that this decline has often not impacted sales volumes, as the brand’s core consumers have doubled-down on volume purchases, and those losing awareness were typically peripheral consumers of the brand to begin with,” Wine Intelligence says. It adds:
“This has meant that the average number of wine brands consumers are aware of now compared with 2019 has decreased. The most acute example is Australia, where most of the top ten brands saw a marked decline in awareness in the second half of 2020. In this instance, other factors may be at work, such as retailer ranging policies, and the growth of online wine purchases direct from the producer (which, in Australia’s case, is more likely to be a niche estate rather than a big brand).”
In the UK, Wine Intelligence adds, “Covid encouraged nervous consumers to switch out of major supermarkets, with attendant queues and more chances to catch the virus, in favor to convenience stores, which in the UK typically offer a small selection of best-selling brands, actually bolstered mainstream brand awareness.”