Top 4 things you should know about the cost of your wine
It’s true!
There are only 4 basic things that determine the cost of wine.
Let’s talk about it honestly!
Here you go:
#1 What happens in the vineyard
#2 What happens in the winery
#3 Packaging, distribution and sale
(boring but true)
And the most important:
#4 How much the consumer (that’s you, by the way) is willing to pay!
Yep, you’ll have to decide what it’s worth to you. Does it provide the value you want?
Let’s get into the not very sexy but honest details!
First, lets talk about the vineyard:
Let’s not forget that at its most basic, wine comes from farming. However, all vineyard sites are not created equal. At all.
I will not quiz you about earlier posts where I talk about this a lot. I will just remind you that in vineyard pricing, it is just like any real estate.
It is:
Location Location Location
A vineyard that has the greatest potential for quality, is going to be insanely more expensive than an ordinary location. If it even has a reputation for good wine (I’m looking at you Napa), the price is more. That price difference will show up when you buy the wine.
If mechanization is used in the vineyard, it can be cheaper than picking the grapes by hand.
This is highly valued real estate in wine country. Vineyards on steep sites have better drainage.
BUT, it is next to impossible to mechanize vineyard work here.
Lack of mechanization is always going to add to the price.
Another cost is for labor and equipment. Like I said, some of these things are not sexy and exciting. They are just basic nuts and bolts business costs.
This last variable is the selection of grape variety. Some grapes are easier to grow than others.
Then we also can go down the rabbit hole that is yield. Yield is the measure of the amount of grapes grown or wine produced in an acre. It is believed that lower yield grapes make better wine. Whether that is true or not, it definitely makes the wine more expensive.
Now let’s talk about in the winery
The boring stuff is the winery equipment and whether it is used efficiently.
There is also the cost of barrels. I discussed Oak in my post on wine vocabulary. Check it out if you want to know more. While acidity and tannins occur naturally, oak joins the party during wine making.
Many wines receive some oak contact. This can range from expensive oak barrels down to staves (small planks) to chips (large splinters) and at the lowest end adding cheap oak essence. For more expensive wines there are a lot of rules as to what is allowed. Obviously these choices will determine the final price.
The winemaker decides how oak (and what type of oak) will be used. If you visit a winery, they will discuss what type of oak they use, and whether it is new or not. Oak barrels are usually used for a certain period of time, and then retired from active duty so to speak. Just so you know, French Oak is more expensive than American Oak. Winemakers get very excited sharing this with you. Whether you will care or not is up to you.
Oak barrels don’t come cheap.
Yep, it adds up.
If wine is aged, that too will start to add up price wise. Expensive storage ties up capital. Let’s be honest, this is a business.
And now to the least glamorous part of this: Packaging, distribution and sales
Something as boring as exchange rates can really affect the final selling price for exported wines. Consumers can get whipsawed with the politics of tariffs. Packaging costs (like cartons and bottles) really add up. Shipping costs vary but don’t forget them.
Distribution rules are insane. Each state has their own. Country to country have rules as well. Whatever they are, they will affect your cost.
You should probably add marketing in here, too. If you are are seeing ads everywhere, the price will definitely be added to the bottle.
Here are the important big questions:
What are you willing to pay?
What is it worth to you?
Everything comes down to this!
Taxes, and exchange rates, and packaging are not the big movers with price. Inexpensive wines usually have these just as much as expensive wines.
But what about the choices in the vineyard and in the winery?
Will these choices make a difference to you? Will the wine be more delicious to you? Will it provide value to you?
I was in a wine store the other day and there were 2 rosé Sancerre wines displayed. One of them was $30 more than the other.
I asked the salesman why the big difference in price?
This is something you should always ask!! What are the differences? What am I gaining and what am I losing?
The salesman was very honest. He said that the more expensive wine came from a more well known wine maker. He said: If they could get $1000 for the wine, that is what the winery would charge.
The consumer is always in charge of what they want to spend. Remember that.
A more expensive wine will not always taste better to you. It is not because you can’t appreciate good wine. Sometimes it just isn’t worth the price. Taste is subjective.
Many inexpensive wines are made as bulk wines. They can still be delicious.
Some wines are expensive simply because of supply and demand. Some wines are used as an investment. That’s insanely high price territory.
Personally, I have higher expectations when the wine is more expensive. You should expect more.
Discovering new wines is fun, and you should explore to find them. Decide on your price point. As I mention all the time, the best way to learn about wines is to compare them. If you are in a restaurant and they have wines by the glass, ask to taste a few before you decide. If you feel someone is reliable, ask questions.
Look into wine regions that are less well known.
A splurge may be worth it for Pinot Noir. I wrote about it in my recent post if you want to read more. That is one variety grape that is a disappointment at the inexpensive level. You don’t need to buy an insanely expensive Burgundy. California (Sonoma) and Oregon (Willamette Valley) have delicious Pinot Noir wines.
Cabernet Sauvignon, on the other hand, has delicious wines at a number of price points. Chardonnay doesn’t have to break the bank, and neither does Riesling. I have posts on both. Just click on the variety if you want to know more.
I have many recommendations in the wine guide below. Sign up if you are interested.
I often think of this couple I met at a wine tasting. They said that they had had a $1400 Rhone wine and it was “life changing.” I love wine, but no wine is life changing unless you go bankrupt buying it.
There are delicious wines out there. Have fun discovering!
