Can Price Change How a Beverage Tastes?

Imagine a tasting event in Toronto. A guest is handed two glasses of wine and told that one retails for $18 CAD while the other sells for $42 CAD. The first wine is pleasant, but the second feels richer, smoother and more complex. Asked to choose, the guest picks the $42 bottle. Both glasses came from the exact same bottle.

It sounds impossible, but it's one of the most compelling findings in consumer psychology. Over the past two decades, researchers have repeatedly shown that price doesn't just influence what consumers expect from a product. It can influence what they actually experience.

The phenomenon has a name, the price placebo effect, and for anyone who sets a price on a drink, it is worth understanding in detail.

THE SCAN THAT SETTLED IT

In a landmark study, participants tasted identical wines presented with different prices, while lying in a brain scanner.

• The same wine was rated as significantly more pleasant when labelled $90 than when labelled $10 (Plassmann et al., PNAS)
• Brain scans showed greater activity in regions associated with pleasure and reward when participants believed they were drinking the more expensive wine (Plassmann et al., PNAS)

Translation: this was not politeness on a survey form. The measured experience of pleasure changed. The price tag had altered the tasting before the wine itself had a chance to.

NOT A WINE QUIRK

The effect extends far beyond wine. Similar findings have been reported for coffee, chocolate, beer and energy drinks. In one study, participants who bought an energy drink at a discount solved fewer mental puzzles than those who paid full price for the identical can (Shiv, Carmon and Ariely, Journal of Marketing Research). The discount didn't just lower the price. It lowered the performance consumers got out of the product.

The pattern even holds for pain medication: 85% of participants reported relief from a placebo pill priced at $2.50, versus 61% when the same pill was marked down to 10 cents (Waber et al., JAMA). Expectations created by price shape perception in surprisingly powerful ways, across categories that have nothing in common except a shelf tag.

PRICE IS A MESSAGE, NOT JUST A NUMBER

For beverage brands and retailers, the implications are significant. Pricing isn't just a financial decision. It's a communication tool. A price tells consumers what to expect before they take their first sip. Set it too low, and a brand may unintentionally signal lower quality. Position it appropriately, and the price reinforces the value the product genuinely delivers.

Few categories live this tension more directly than no-alcohol. Shoppers regularly ask why a non-alcoholic wine or a bottle from the non-alcoholic spirits aisle costs nearly as much as its full-strength equivalent. The research suggests the deeper danger runs the other way: a category that discounts itself into the bargain bin is telling every first-time buyer, before the first sip, that the liquid isn't worth much. In a segment still winning trial, that signal compounds.

THE LIMIT OF THE EFFECT

Perception has its limits. Price may influence the first purchase, or even the first sip, but only product quality earns the second purchase. A premium tag on a mediocre liquid buys exactly one transaction, plus a disappointed customer who now distrusts the whole shelf.

The strongest brands align premium pricing with an experience that consistently lives up to the promise. The placebo opens the door; the product decides whether the customer walks back through it.

THE VERDICT

Price is the first ingredient a consumer tastes. Decades of research, from wine scanners to discounted energy drinks, show it shapes the experience itself, not just the expectation. For beverage brands, that makes pricing a brand-building decision disguised as a financial one. Set the price to tell the truth about the product, then make sure the product keeps the promise.