Wine is for sale in virtually all price ranges. What causes the vast differences? Is quality closely tied to price? Is a higher priced bottle worth its tag? Let’s explore some of the many factors that contribute to the end cost of a bottle of wine.
GROWING GRAPES
Land — Starting, quite literally, from the ground up, the price of real estate varies depending on country, size, soil, altitude, sun-facing slopes, demand, and availability. Examples: Land in established fine wine growing regions is pricier than a similar plot in an unestablished region and slopes are pricier than valleys as they can produce finer fruit.
Weather — Weather can change the number of grapes available for harvest as it alters the growing conditions each season. Fewer grapes mean less wine and, in a fine wine growing region, this means higher prices to reduce the normal demand.
Harvest — Grapes can be harvested by machine or hand due to preference, law, or slopes too steep to accommodate machinery. Harvest costs vary based on method, local labor costs, and machinery investment and upkeep.
WINEMAKING (turning harvested grapes into wine)
Equipment — From crushing to pressing to clarifying, equipment is needed and varies in investment and upkeep costs.
Containers — Choice of fermentation, aging, and storage containers (wood, concrete, clay, steel) impact both finished product and price.
Labor — The number of workers needed scales depending on the particular processing path chosen. The price of some labor, such as blenders, can be very high.
PACKAGING
Bottles — Endless options here for glass thickness, color, and bottle shape will impact production costs.
Closures — There are many options (cork, plastic, glass) which are chosen by heritage, cost, and how long the wine is expected to be stored or aged.
Label — Packaging is important in attracting consumers to purchase. The label can range from a few printed words on budget paper to commissioned artwork on expensive paper.
GETTING THE PRODUCT INTO CONSUMERS’ GLASSES
Advertising — Some go big and some remain understated in print, media, store display signage, and seasonal promotions.
Distribution — Down the street or around the world shipping and use of another company’s established distribution network or in-house distributing are some cost-varying factors.
CULTURE
Brand recognition — Increased demand reduces supply and increases price.
Cultural Perception — Some products enter mainstream culture through longevity or perhaps they are catapulted to popularity from a mention in movies or music or association with a celebrity. Items in sudden high demand will both adjust and be able to fetch a ballooned price.
Established Concepts — Some wine products ride the wave of a previous brand’s successful marketing campaign. Example: Sparkling wines are now associated with luxury and higher prices are accepted and even expected.
Grape name recognition — The word chardonnay sells more bottles than a lesser known grape variety’s name on the label, especially among casual consumers.
RESTAURANTS AND BARS
Involving a restaurant or bar in the life of a bottle will significantly increase wallet impact. Industry standard hovers around 300% mark up. Happy hours and promotions aside, the price of one glass in restaurant is roughly the bottle purchase price for home consumption.
No, cost is not solely indicative of quality (one missing factor can drastically alter finished quality) but it is often a decent indicator. When choosing a bottle, I recommend honoring personal tastes above all.
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