That question, and several variations of it, seem to be on everyone’s mind these days, particularly as we all search for more economical alternatives to our favorite wines. The truth is that price and quality are related, but not as closely as one might think!
All wines share many basic, fairly consistent expenses. There are actually only a few variables that you can throw in the mix, mostly due to activities that are not intrinsically part of the winemaking process. So, why do some wines cost so damn much?
About the AuthorGregory Dal Piaz is a proponent and admirer of a broad range of wines and styles. During his decades of collecting and tasting he has discovered that a wine need not cost a fortune to drink well. Feel free to ask him questions at the Snooth Forums where he regularly engages with beginners and experts alike.Raw Ingredients
The grapes that make a wine -- plus the bottle, closure, and label -- account for a percentage of the wine's price. But have you ever wondered how much that really is?
Other factors that contribute to the increasing prices of wine. The pursuit of high scores, and the effects of those scores on whole wine categories, can have a profound influence on pricing.
Don't Miss: The Truth About Wine Prices [INFOGRAPHIC]There are many reasons why wines are offered at varying prices. First off, there are the base prices for the necessities -- your bottle, closure, capsule, and label. Those add up to your first dollar or three. Then comes your first big semi-variable: Grape juice. I say semi-variable, because you’re gonna have to pay something for the grapes that go into your wine, but how much you pay depends hugely on where you are and what you’re producing.
Bulk wine can be made from grapes that cost as little as a couple hundred dollars a ton. Super-premium grapes can cost several thousand dollars a ton. That means that the actual juice in your bottle can run anywhere from about $.50 to almost $10 a bottle.
The next layer of costs really is a variable, simply because not every wine undergoes oak aging, and those that do can use a variety of barrels. From American to French, new to well-used, 225 liters to something much, much larger. There’s a lot of ways to use oak (let's not even mention chips and such for the moment) and all of them cost something, adding another dollar or three to the price of your bottle of wine.
So, where does that put us? Well, at this stage of the game we’ve invested anywhere from about $1.50 to as much as $16 in our bottle of wine, but we’re not really done yet. We now have to get that bottle of the wine into a store where we can buy it!
We’re talking importers, distributors, and retailers, here. That $1.50 can jump to $2.25, then $4.50, before you find it on the shelf for $7.99! And that $16 bottle of wine? Well you’ll be paying upwards of $40 for that bad boy. Probably way upwards.
You see, analyzing the price of a bottle of wine is not really not as simple as adding up the cost of the ingredients. There are salaries to pay (contrary to popular opinion, good wine generally does not make itself), and then there are expenses to cover. A bottling line for example, or the fee for a mobile bottler to come and bottle your production for you, utilities -- maybe even some profit, if you’re lucky.
Sure there are a ton of wines out there that deliver dubious value. A lot of producers are late to the game, and they not only have a big mortgage to cover, but they’ve hired the best and the brightest (and most expensive) consultants to give their wines every chance of getting a higher score.
Oh yeah, high scores. We forgot to mention that. Yup, high scores are worth money, in some cases, big money. And once a neighbor of yours gets that kind of big money, you might be tempted to raise your prices. I mean your wine is just as good as his. Right?
Well, if it’s not quite as good, it’s pretty close, so maybe you don’t raise your price quite as much as he did. Say 10% less – a great deal! Yes, in addition to points, egos play a huge role in the pricing of wines. All of this tends to lead to more dubious values.
There are great wines out there that cost an arm and a leg, and their prices have very little to do with what I just laid out. The marketplace determines those prices, and demand far outstrips supply, but for the vast majority of wines in the marketplace what I laid out does apply. Factor in additional expenses and some profit and most wines should be in the $10-$100 range or so. Beyond that, you’re most likely getting into point score and ego tariff territory. It’s a different game, and one in which I don’t have fun playing. I don’t mind drinking some of those wines, but paying the price, well, it tends to rub me the wrong way!