It is often asked and challenged as to why the cost of wine can be so outrageous and whether the cost of high-end, premium wines are worth the money.
To begin, let’s take a deeper look into the costs of creating wine. First and foremost, where is the wine from? Is it from the Mount Veeder American Viticultural Area in Napa? The Amador County AVA? The Lodi AVA? All are capable of producing excellent wine, but each has a wide spread in terms of land value.
At the top end, Mount Veeder is a very small district of hillside vineyards in Napa Valley that – because of its favorable hillside soils and cooler climate – fetches outrageous real estate prices. While the lesser known areas of Amador County and Lodi fetch far lower real estate prices. To add to this, higher real estate values lend to higher costs of living, which extend to increased wages, food, fuel, etc.
Most premium wine producers focus on making their wine from the highest quality fruit. Unfortunately for them, this means in order to produce the most concentrated grapes, the growers must limit how many grape clusters each vine can produce. Limiting their yields radically increases the quality of their fruit but simultaneously limits the wine available.
Are the vines being hand-harvested by laborers or are they machine-harvested? Steep slopes mean most hillside vineyards have to rely on hand harvesting, while vineyards on flat land can utilize more efficient machines. The most notable benefit of hand harvesting is the sorting of the best grape clusters and best grapes.
Are the wines barrel aged? If so, is it new oak barrels? For how long? Wines that are aged in new French oak barrels for extended periods of time will always require higher pricing. For example, wineries that are aging for 18-months or longer must purchase additional barrels for the following vintage. In addition, consider the amount of winery space required for long barrel aging. At roughly $1,000/per French oak barrel, which holds 25-cases or 300 bottles of wine, this quickly elevates the final bottle cost.
These factors directly correlate to premium pricing. And yet another factor to consider is the simple economics of supply and demand. Some of the most famous single vineyard wines of Burgundy, France, only produce upwards of a few barrels of wine with prices reaching hundreds or thousands of dollars per bottle.
Back to the original question: are they worth the money? There is no solid answer – it will vary from person to person. Many wine lovers claim they can’t taste the difference between a $10 and $20 wine. Some ask if a $100 bottle is going to be 5-times better than a $20 bottle. Typically, no.
It’s hard to quantify an experience into a dollar amount and more expensive doesn’t always equate to a better experience. Some of the most expensive wines of the world are made with the idea of a long life in the bottle and may take 20-years to mature and become balanced and enjoyable.
Alan Cuenca is an accredited oenophile and owner of Put a Cork in It, a Durango wine store. Reach him at email@example.com.