Is expensive wine worth the price?

The question as old as time is, does the cost of a bottle of wine really matter? Is there really a difference between a $20 bottle of Cabernet Sauvignon and a $150 bottle? Can a person really tell the difference between the two?

The answer to all these questions is an emphatic “YES!!!”

Yes, there is a difference between a $20 bottle and a $150 bottle.

Yes, a person can tell the difference.

And

Yes, it is well worth the money to pay for good wine.

But this raises the question; why is good wine expensive?

Explaining the expense of wine is no small feat. It is far more than just the name on the label. Sure, don’t get me wrong, certain names on the label almost immediately command higher than entry-level prices, but there are several aspects that go into pricing the wine. I will attempt to break it down into 3 small sections: The Land, The Winemaking and Marketing/Sales.

The Land

  If you are into wine tasting, you would know that terroir has a lot of influence in the wines we drink. Whether it be the “home” of terroir, Bourgogne, or it be Geneva on The Lake, Ohio, the land in which the vineyard is located has a huge impact. Not just in the flavors we taste, but also the price we pay for the bottle.

What do I mean?

Well, the average dollar per acre in Ohio is valued at $6,350. Whereas the average dollar per acre in Napa Valley is almost 42 times that at $270,000 per acre.

The rule of thumb is that 400 individual grapes are needed to produce enough juice for one bottle of wine. That does not change based on location. In Napa, you need 400 grapes and guess what? In Ohio you need 400 grapes. So one can presume that the juice alone is more expensive in the Napa Valley as it is in Ohio.

Does that necessarily make it better?

Well, technically no, but similarly to France, we learned which grapes prefer what type of climate and microclimate and therefore tend to plant grapes in the environments they prefer. This is why more Cabernet Sauvignon plants are grown in certain regions of Napa Valley compared to Geneva on the Lake Ohio.

The Winemaking

  Many people would assume that making wine is making wine and that the process cannot be too dissimilar from one vineyard to another, but this is completely not true.

Now, depending on the wineries’ goal, the winemaking process can be quite different. Sure, the goal of every vineyard is to turn a profit, but is the wineries’ goal to mass produce wine or make a little bit of hard-to-find high quality wine?

Simple economics (supply and demand) will tell you that if a product is hard to find the price should go up. That is, if it is a product many are looking for. But, why would a product be hard to find? Because so many people want it? Yes, but it also may be because most of the wine produced by a vineyard may be in the aging process. See, some wineries, rather than producing wine and immediately sending it to stores to sell, may age their wine for months if not years before consumers can get a hold of a bottle. In fact, Champagne must age in the cellar for a minimum of 15 months. Vintage Champagne? 3 years.

So, if a vineyard has much of their inventory in “hiding” (aging), then it is impossible to find. Not to mention that the wineries profits from a certain harvest are literally sitting and not generating any revenue. This is why it takes years for wineries to begin turning a profit on their own wine. As they are selling 2019s vintage, they begin aging the 2023 and as they begin selling the 2020 vintage, they begin selling the 2024 and so on.

         In addition to the aging requirements from some wineries, how they obtain the grapes can also be polarizing. For example, if the wineries goal is to get the grapes harvested and, as quick as possible, get them turned into juice, they may choose to mechanize their process.

What do I mean?

         Well, it is much simpler (and cheaper) to drive a tractor in between rows of vines that mechanically plucks the grape clusters off their vines. The winemaker literally drives the vehicle between the rows and it does all the work for them. It saves time and it costs less than dozens of individuals picking the grapes by hand. The issue with this method, however, is twofold. One, you not only get the grapes but also the leaves, the twigs and even the bugs. And two, you are getting all the grapes, good or bad.  

         Now, if your goal is higher quality wine, then maybe you pay extra, hire some good people who understand what you are looking for in the grapes and select only the grapes you desire. By selecting specific grapes for harvest, you are selecting grapes that are perfect, without bruising, and are of certain color/sugar content while also leaving behind the leaves, twigs and bugs.

         The cost of the more labor intense process is typically also reflected in the bottle price. So again, the more specific a winemaker is about the taste, flavor and look of their wine, the more costly it is.

         After the grapes are harvested and the wine is made, many wineries choose to age it in large oak barrels. So now, I have you asking, how much are oak barrels? Well, it is much more complicated than that. All oak is not created equal. What flavor profile is a winery going after? If winemakers seek a more coconut or vanilla flavor, then they may want an American oak barrel. But, if they are seeking a more subtle notes and spice then they may be looking for a French oak barrel. American oak barrels typically cost around $350-$500 whereas French oak barrels cost $850-$3600. Yet another cost of production typically reflected in the price of a bottle.

Marketing and Sales

         This section was NOT put here to explain why good wine needs to spend money on advertising. Far from it. In fact, one could argue the best wines in the world need not spend a dollar on marketing.

         Rather, as explained before, sometimes sales are not an immediate expectation. Typically, vines takes years before they produce a grape mature enough to be harvested and turned into wine. This “time” is money lost and at times reflected in the bottle price. If you ever actually go to a winery that makes “estate” wine or wine from their own grapes. Take a gander at the price for a bottle of Merlot and then look at the price of Estate Merlot. What is the difference? Typically, estate wines tend to carry a higher cost.

         In addition, what style of bottle or closure do they use? Is it a heavier bottle? If so, they probably utilize bottles that too are of higher quality and cost more. Does a winery wrap their bottles with tissue? Is that tissue customized or stamped with the vineyard’s logo? Also, more cost. Does that winery ship their wines in wooden crates/boxes? More cost.

         This is why, the standard, convenience store brands tend to come in standard bottles, with standard closure. They do not have fancy tissue paper. They do not have fancy wooden crates. This is an effort to lower costs. Quite similar to Aldi grocery stores charging a quarter to use a shopping cart. By creating this process, Aldi cuts down on the cost of hiring employees to retrieve the carts when you don’t return them to the store. Less employees equals lower costs to the consumer. Less tissue paper and wood crates equal lower cost to the consumer.

BUT tissue paper and wood do not mean better quality, does it?

Well, yes, is sort of does.

The reason behind utilizing tissue paper is truly to protect your wine from UV light and preserve the flavor profile you expect when you are predicted to open it.

The crates are quite durable when shipping and also protects the bottle.

But honestly, the tissue and crate are nice touches and presentation/ambiance go a long way. As mentioned in my book The Wine Doctor, the Halo effect is when initial positive judgement influences your opinion about something as a whole. Or, your initial thoughts of a product basically subconsciously influences your overall opinion. So maybe the glass, the tissue and the crate already helped garner a final opinion on the juice inside?

         So, now that you are equipped with a little knowledge from above, I am going to give you a little test.

How much would you expect to pay for a mass produced, standard bottle with standard screw top closure immediately bottled and shipped with no aging and can be found in every convenience store or gas station in North America?

How much would you expect to pay for a wine, handpicked for only the most perfect grapes, aged in French oak barrels for 24 months, wrapped in tissue paper to preserve its contents and available in specialty wine shops, but only while supplies last?

Does this cost translate into flavor?

Well,

         1 - You have a wine that selected only the best grapes.

         2 - The wine was aged in the best barrel – creating subtle hints of certain flavors.

         3 - The wine was not sold for 2 years while allowing the aging process to exemplify the taste.

         4 - The product is protected appropriately so the UV light does not damage it while its sits upright on the overly bright store waiting to be imbibed immediately.

The answer is yes – the product is typically better and usually worth the higher price.

But, as with everything in life, there are some exceptions.

So my recommendation, drink what you like, at the price point you are comfortable with.