What exactly are we paying for?

“A hundred and ninety dollars a bottle?” I almost choked on my water, staring up at the waiter who made the suggestion as if I had just noticed that he had a tail. What on earth would cause wine to cost that much? More to the point, why the hell would I pay that much, or as we all know is possible, potentially far more, for something that will be gone by the time Sonja and I finish with our meal?

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Why does wine cost what it does? Why is it that two bottles of, say, a red blend, can taste quite similar, share a lot of the same characteristics, and yet one will cost twenty dollars and the next one eight times that? I began to learn a little bit about the business of pricing wine on Sonja and my visit to Peju Winery in Napa Valley this February, speaking with one of their highly-knowledgeable staff. Since then, curiosity has had me digging deeper and deeper into the matter. Ultimately, a great number of factors go into the cost of a bottle of wine. As concisely as I can, I’m going to summarize a few of the more interesting that I’ve been learning about, realizing that many others exist, in the hopes that it is entertaining, enlightening, and might even help keep you, our beloved reader, from getting a raw deal. Should you want to dig deeper from there, be my guest. The economy of wine is as complex, if not more so, than the best cuvee you’ve ever had.

One huge factor that plays into the cost of wine is the cost of the land that the grapes are grown on. “A planted acre here in Napa can easily cost $600,000,” explained David Donati, a wine ambassador in Peju’s gorgeous tasting room, as he poured us another taste of their incredible Cabernet. “While an acre of the same grape over in Sonoma, similar soil, same climate, everything, might only cost $150,000.” With that discrepancy, it’s easy to see why Napa’s renowned wines often come at a premium. If we accept those numbers as a baseline, then just to break even a bottle of Napa Valley Barbera will have to cost four times that of the same varietal from neighboring Sonoma County. This might also help to explain how Columbia Crest, located in Washington state, can sell a really wicked Cab for $10/bottle.

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Pictured: You can pay a mint for a view like this — especially if it’s already planted with grapevines. 

Of course, it’s true that a winery in Napa can buy grapes elsewhere and then make and label the wine in Napa, but a close examination of the bottle will almost always reveal to you where the grapes themselves were grown. “Estate bottled” is the term you’re looking for, as this means that the grapes were grown more or less where they were turned into wine. As it was explained to us at Chateau St. Jean on that same visit by a very helpful and knowledgeable young man whose name both Sonja and I have unfortunately since forgotten, “The grapes begin fermenting almost immediately upon being picked. You don’t let them sit very long – you want to get to work on them right away or they lose a lot.” For this reason, the stuff you don’t have to drive across the countryside in a truck would arguably have an advantage over those grapes that have to take a lengthy voyage before ultimately being juiced, barreled, and bottled for consumption. Granted, grapes today are transported quickly in climate-controlled containers, and often grapes are purchased from very nearby the winery if they aren’t grown there. With that in mind, some of the finest wines I’ve tasted have come with the “estate bottled” label, and I don’t think this is complete coincidence.

Most people who have had their nose in a decanter for a while have heard tale of the legendary 2005 Bordeaux. Bordeaux, of course, is a region in France, and the reason the ’05 got a lot of attention really just boils down to weather. In 2005, the weather in the Bordeaux region was ideal, with a hot, dry summer, and the vintners and connoisseurs alike seem to agree that the result was a wine that is uncommonly good – even for the storied Bordeaux region of France.  But weather is a fickle thing. Great conditions for grapes can drive the value of the product up, but so can poor conditions. Regularly during our last visit to Napa and Sonoma we’d notice a discrepancy in the cost of the same varietal, from the same winery, from one vintage to the next. The explanation was often just the opposite of the 2005 Bordeaux phenomenon. Instead, wine makers would tell us, “That was a bad year, so there’s just not much of it.” In this instance, too dry and too hot translated into withered and dying vines.  Wine, like any other commodity, often becomes more valuable when less of it is available.

How the grapes are grown, treated, and harvested can also add to cost. Some use large amount of fertilizer, invest money in keeping pests away from the fruit, or employ expensive contraptions to keep the vines at a certain, artificial temperature while they grow. Another expensive practice is known as “Dropping grapes,” which is the process of cutting off perfectly good fruit from the vine, as much as 75% of it during the growing season. This practice is common only to the wine maker whose first priority is quality, and who has no quota of barrels to meet. On the surface, it would seem like a really bad idea to willfully throw away as much as three-fourths of your grapes instead of making four times as much wine, but the thought is that all that the vine has to offer is then channeled into a small number of grapes, giving them complexity and character that cannot be achieved any other way. “You can only work with what you’ve got,” said winemaker Mark Perry to us the other day, as he drew a sample from an oak barrel behind his tasting room. “If you have ‘D’ grade grapes, it doesn’t matter how good you are, you can only make ‘D’ grade wine.” Fair enough.

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Pictured: One reason Cline can sell their excellent wines at such reasonable prices may be their creative weeding and fertilizing techniques. 

Artistry, if I may call it that, is another factor that plays into the cost of wine. The art of making wine, much like any other form of art, may be time consuming, demanding, and expensive. And like artists, winemakers themselves can be expensive as well. A virtually unknown artist can produce incredible sculptures and paintings, however, as soon as the “rest of the world” decides their art is incredible, the price of their work goes up significantly. The same can be true of winemakers, whose salaries range as widely as their reputations. Wine made by a famous winemaker may or may not be of higher quality, but it’s sure to cost more than that made by an up and coming vintner we’re yet to hear about.

Equipment costs are but another great expense for wineries. While much of the equipment used to put a bottle of wine on the table is relatively standard, e.g. the cost of a bottle, cork and label are likely to be pretty similar unless you decide to do something totally over the top, there are some huge discrepancies as well. Many well-loved reds and whites alike come boast that famous “oaky” flavor, yet as Sonja and I have discovered by asking around, that flavor can come from a myriad of different sources. The cheap way to do it is to make your wine in a huge metal vat, which can be reused as often as you like so long as you take care of it, and to put oak dust, oak chips, oak spirals, etc. into the vat to give it that desired oaky flavor. You’re using far less wood this way, making far more wine in your enormous vat, and still ending up with the hints of oak that people often enjoy in wine.

Contrast this method against the use of a traditional oak barrel. Standard oak barrels typically come from three places: France, the United States, and Eastern Europe. French oak is the most expensive by far, running somewhere in the neighborhood of $1,200 and up for a single barrel, while American oak barrels costs $500 – $800, and Eastern European considerably less than American. However, wine makers generally seem to favor French Oak for their finest products, as it is older wood and thus denser, offering more flavor to the finished product. In addition to all of this, it’s important to know that, juxtaposed next to the massive steel vats that can be reused for decades on end as long as they are well maintained, almost all reputable vintners will replace their oak barrels every year or two, three at the most. All things considered, while the barrels are the classic storage containers for wine and look incredible stacked en masse against the wall of a winery, tasting room, or cave, they are as expensive as they are traditional, and the consumer can expect to absorb at least some if not all of that cost.

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Pictured: Some wineries keep thousands of oak barrels on hand, often full of wine. As barrel prices can reach well past $1,200 each, that $80 bottle might seem slightly more reasonable if you drink it in a wine cave.

There are, of course, any number of other factors that play into the cost of wine, and many of them are relatively arbitrary. Does the winery have a mortgage on it? If so, they might go for volume, or they might go for higher prices as a boutique offering, but one way or another their ultimate goal is to pay off that debt. Similarly, it’s no secret to fellow wine drinkers that you can pay a lot for a label, for a name that you’ve heard of. Sometimes that pays off, and sometimes it doesn’t. More often than not, however, you can be just as happy with a wine from a lesser-known winery at a fraction of the cost. Like Veuve Clicquot? Try Peju’s sparkling wine, reportedly an experiment, at less than half the cost; I promise you won’t be disappointed. Like Opus One? Instead of paying Robert Mondavi and Baron Phillippe de Rothschild for their names, why not try a Bordeaux blend your local wine shop owner recommends? 2009 was a great year in Bordeaux, almost as good as 2005 some say, and with a little bit o’ luck you can get great wines from famous chateaus in the ’09 vintage starting around $15 – $20. With the money you save, buy a couple tanks of gas, invite your extended family over for prime rib, or pay for half an hour of your child’s college tuition. The world is now your oyster!

Of course, most of the time, no matter how much effort has gone into making it, bad wine is as hard to sell as it is to drink. You can pay top dollar for an average bottle of wine, and you can pay bottom dollar for a pretty decent bottle, too. My mantra remains: good wine is whatever you can afford that you enjoy drinking. Truthfully, I enjoy wine less when I know it cost too much money, as each sip feels as if it burns yet another hole into my well-worn pockets. Instead, I much prefer to drink something that tastes fantastic, and that I feel I got for a fair or even bargain price. A good sommelier, and Sonja and I know more than one, will not turn up their nose when you tell them you love a full-bodied California Cab, and that you’d like to stay in the $30-$40 range (yes, great cabs can cost far less than that, but typically not at places that staff certified somms, silly). Instead, a sharp sommelier will most often take it as a challenge, dig deep into the cellar if need be, and at our favorite places they always come back to the table with something that Sonja and I enjoy, that compliments the food we’ve ordered, and that doesn’t haunt us until the next time one of us gets paid. If money is no option, well, then you’re probably way too busy doing super important stuff to read this blog post anyway. But for the rest of us, don’t think for a moment that there’s any shame in sticking to a budget, especially when it comes to wine. Not breaking the bank will help you to relax and have fun as you imbibe, and really, that’s what wine is all about.

Mark

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6 responses to “What exactly are we paying for?

  1. I was wondering if you ever thought of changing the layout of your
    website? Its very well written; I love what youve got to say.
    But maybe you could a little more in the way of content so people could connect with
    it better. Youve got an awful lot of text for only having 1 or 2 images.
    Maybe you could space it out better?

    Like

    • Thanks for your feedback! I think that generally we do have more photos, if you look at some of our other posts, including our most recent. This one is indeed sparse on pictures. We appreciate your suggestion.

      Like

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