Cheap wine is cheap because it is cheap to make. In most cases, expensive wine is expensive because it is expensive to make.
The cost of raw materials to make a wine is the primary indicator of the resulting cost of a wine.
Of course, the answer is never that simple or else you would not be reading a lengthy article on the subject. Several factors impact the cost of a bottle, and it is our job to break them down for you.
The Grape Variety Alters Cost
Wine grapes are not the typical grapes you can pick up at the grocery store and eat right off the vine. Certain grape varieties are simply more expensive than others, which explains why certain wine varieties end up being more expensive. A Cabernet Sauvignon grape will almost always be more expensive than a Pinot Gris grape. Like any other produce market, the prices of grape varieties can vary depending on the season and demand for the product.
A winery stationed on a vineyard comes with its own built-in grape supply. However, season and climate can affect yielding. The value of the wine plummets when the yield results in unripened grapes. Ideally, wineries aim for low-yielding vines to create a more rich flavor in the final product. If the winery transports grapes to their facility, finding the right grape supplier might be a hassle. Not to mention, transportation cost of shipping in the grapes will be factored into the final bottle price.
How Aging Affects The Price of Wine
To get an oaky wine, wineries typically age wine in an oak barrel. French oak barrel or an American oak barrel can cost around $900 and $350 respectively. The initial cost of a stainless steel tank can be just as expensive depending on its size, but stainless steel tanks can last a lifetime. An oak barrel is less costly but requires replacement every five years or so. As you might assume, a stainless steel tank does not naturally instill an oaky taste that an oak barrel does. Winemakers usually supplement flavor by throwing some oak chips or oak planks into the tank.
Secondarily, a stainless steel tank is typically larger than its oak counterpart, which will often yield a greater amount of product. More product means the ability to sell the wine at a cheaper price because there is a surplus. The longer a wine sits in a barrel, the more time it steals from the start of the next batch fermenting. The same goes for time spent aging in a cellar. When a wine sits in a cellar, the consumer pays for that shelf space and the controlled temperature of the cellar. Producing wine more quickly allows for it to be sold at a lower price.
At the grocery store, the decision between paper and plastic is a green decision in both saving the environment and saving your wallet. It is widely known that boxed wine is substantially cheaper than bottled wine. The cost of raw materials for a wine box made out of cardboard and plastic is simply less expensive than the cost of raw materials for a wine bottle made out of glass.
On top of the raw materials, labor and energy factor into cost. Opting for glass comes with hours of labor and natural gas costs to make and shape a bottle. The type of cork used to seal a bottle or decision to install a screw cap can drive up or lessen the resulting cost of a bottle by a few cents. A graphic designer will need to be paid for creating a fancy printed label on a bottle. Even the color of the glass impacts the final price. A deep divot in the bottle of the bottle, also known as a punt, indicates a pricier bottle. Whereas, a smaller divot or none at all indicates a cheap bottle.
It might be a rather simple fact to point out, but a larger bottle will cost more. Most wine bottles come in various sizes: half (375 milliliters), standard (750 milliliters), magnum (1.5 liters), and larger. The bigger the bottle, the more the consumer pays. A box made of cardboard stuffed with a plastic bag is less expensive for both the producer and consumer, and it typically carries more product. The average box holds three liters of wine.
Price is Often Based on The Reputation of the Winery or Wine-Maker
The bottled versus boxed debate factors into the cost of raw materials as well as the reputation of a wine. A box of Franzia or a bottle of Arbor Mist? Ever since the first taste of wine, the bottle has dominated the wine market. It is often hard to change a tradition that dates back so long ago, and the preconceived notions that boxed wine is lesser than bottled wine have not changed since the cardboard and plastic combination hit the market.
Reputation goes beyond packaging. The reputation of wine extends back centuries for some countries that are famous for their deliciously made names. France claimed an entire variation of wine. Champagne only comes from the Champagne region of France. Excluding a strange agreement with the state of California, it is illegal to market sparkling wine as Champagne. Given the choice, any wine enthusiasts will opt for French Champagne over California Champagne if they can afford to do so. The more specific the location becomes, the more the product is worth.
Taking these factors into consideration, a wine can also simply be expensive because it can be. Where there is unwavering demand for a product, there is power to set the price higher. The three-tier system allows for everyone to make a profit. If wineries were to charge their distributors more, the final price on the shelf would inevitably be higher. Local wineries have no competition for their signature concoction, allowing any price to be a reasonable one.
Is it worth it to spend the extra cash? Wine enthusiasts know how to appreciate an expensive glass, but statistics show that the average wine drinker is less likely to enjoy a costly bottle. Most casual wine drinkers prefer more residual sugar in their wine. Our advice is that it is best to understand your own preferences for taste before venturing into expensive territory to prevent wasting $50 on a wine you might not like.