The economics of saignee in winemaking

The winemaking technique of saignee is common for some varietals, and the ensuing flavor profiles have been carefully analyzed by oenologists. However, we argue that saignee is fundamentally about economic tradeoffs between the quantity of primary wine that is ultimately produced, the quality (and thus, price) of that wine, and the amount of rose wine that is bled off in the process. We develop the first theoretically-grounded economic model of saignee and analyze the model to shed light on the winemaker's optimal choice of saignee, and on the properties of wine and wine markets that should empirically give rise to more, or less, saignee. The model helps to explain several real-world regularities such as the absence of saignee for most Bordeaux wines, the specialization in rose for many wines in Provence, and the practice of moderate amounts of saignee for varietals such as grenache and pinot noir.