The women of Champagne and the power of network effects

An interesting study of wine industry producers in the famous French wine region of Champagne has shown that women who develop strong networks in male-dominated industries can achieve some surprising advantages over their male counterparts.

“We found that female growers were able to charge systematically higher prices than male growers for grapes of the same quality,” the report’s authors found.

How exactly did this happen?

Writing in the Harvard Business Review, the study’s authors, Amandine Ody-Brasier and Isabel Fernandez-Mateo, wanted to look specifically at seller-side discrimination, especially in regard to how it might affect female vendors in a predominantly male marketplace.

They chose the Champagne region because its marketplace exhibited two characteristics that would minimise buyer discrimination against minority sellers based on pricing factors: “the two characteristics — quality transparency and price inelasticity — would tend to make it difficult for buyers to discriminate on price against minority growers”.

A quantitative analysis of sale prices over a 17-year period yielded an interesting result:

“To uncover any gender-based differences in prices, we conducted a detailed quantitative analysis of more than 5,700 individual sales transactions over a 17-year period. The results were surprising. We found that female growers were able to charge systematically higher prices than male growers for grapes of the same quality. The difference might seem small (a premium of just 1% to 2%), but for an average grape seller that would translate to more than 2,500 euros annually.”

Following on from the quantitative analysis the authors conducted extensive interviews with 67 men and women involved in the industry. What they uncovered was that women, having been largely shut out of the traditional male networks, developed their own stronger networks that engendered higher sharing and trust levels than observed in the male networks. The experience of being on the outer in a highly chauvinistic industry moved the women towards co-operation in order to overcome discrimination.

“Often, minorities who are excluded from the majority will seek solidarity with one another, and this was certainly the case for the female growers, who tended to interact for social support. These informal relationships frequently led to the women exchanging useful knowledge and market information that the men tended to keep secret. Those conversations might include information about who does business with whom, to what extent, for what grapes, and at what price.”

The authors make the observation that this solidarity appears to be reliant to some degree on the percentage of people (women or other minorities) who identify as a minority group in an industry; so where there might only be a few women in an overwhelmingly male-dominated industry or workplace, they may compete rather than cooperate with each other. This is partly because the small number of people make the benefits gained from cooperation negligible, whereas a more substantial minority grouping would be able to develop sufficiently strong networks to see benefits accrue through the sharing of information and other resources.

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As women gain traction in many traditionally male-dominated industries, it will be interesting to see if this type of network effect is observable elsewhere. It does show that the stereotypical tendency of women in business to lean towards cooperative behaviour rather than competition does not necessarily have to be a negative for the bottom line. In fact, quite the opposite, as the study’s authors conclude:

“As such, it appears that the male grape growers in Champagne, France have much to learn from their female counterparts about the importance of social networks to increase the competitiveness of their businesses.”

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