If you want to make a small fortune in wine start with a large one.
This is a phrase frequently used in the wine industry where producing wine is anything but cheap.
When it comes to fine wine production every aspect can add to the cost from the price of land and labor,
All the way to the oak barrels the wine is stored in.
Even climate can drastically impact production costs.
Diego met with Fabrice Rosset the president of prestigious Champagne Deutz to discuss the huge cost of quality land in the region of Champagne.
A hectare of land of premium grapes, premium terroir,
is 1.8 million euros and believe me the return on investment
Is very low.
Fabrice, why is price of the land in Champagne so expensive?
The basic thing is you see it's a low of offer and demand.
The Champagne area is limited
To 35,000 hectares, so voila.
If I want to invest in Champagne, what top tip can you give me?
There is a prerequisite on this
Are you passionate?
Very.
About wine?
Now, yes!
You are.
If you are passionate, it means you are slightly crazy.
Right, I believe this is a fundamental thing
For investing in champagne. The other thing is, you might be having a hard time
finding vineyards actually
there are very few transactions
very few newcomers.
It's a similar story in the finest vineyards of France from Burgundy to Bordeaux.
There's a limited supply of these prestigious sites and plenty of buyers willing to open their wallets.
Cheba discussed this with the managing director of Remoissenet, Bernard Repolt.
How much does the land cost here?
The land costs a lot because we have a system, an appellation contrôlée system.
To give you an example, Le Montrachet
Which is the famous Grand Cru white, has only 8 hectares.
So we can't produce more. So as there are more and more people who are interested in luxury, especially I'm thinking the Chinese market.
So the prices of the wine have been increasing, so then the price of a land has followed.
To the point that Montrachet, the Grand Cru,
will probably be around 50 million euros for one hectare.
So that's the price of luxury.
It's no coincidence that many high-profile winery acquisitions are made by super-rich individuals or luxury brands.
For example, California Screaming Eagle, Croix Canon in Bordeaux, and Bonneau Du Martray in Burgundy.
But it's not just the cost of the land.
In Champagne for example, there are around 10,000 vines per hectare of land.
Slung low to the ground,
each vine has to be lovingly tendered throughout each season by a dedicated team.
And at harvest time more workers are required to hand pick the grapes and that's all before the grapes even reach the winery.
Once there, the wine has to be fermented in oak barrels or stainless steel tanks,
and to make it sparkling most will spend years in the bottle developing bubbles and unique characteristics.
Even the cost of a single barrel used for fermenting wine is expensive.
The type of wood, where it comes from, and how sustainable it is all matter.
The best wines are kept in barrels that are handmade by Coopers using traditional
methods and when you need to buy hundreds of those barrels that can only be used a few times, it can really add up.
So I'm seeing all these barrels are they more expensive to make than stainless steel vats?
Yeah, yeah, yeah. They are very expensive, its hand made, its very small,
only 228 litres for Burgundy barrels
and it's very expensive to make barrels compared to vats.
The price for one barrel is
approximately 600 euro now, and
the price has doubled in the last 20 years.
Barrels need a lot of work during the season, one tank is easy, compared
Compare to barrels during the year.
Different styles of wine can also affect production costs as Stephanie found out when she spoke to Sautern producer Eileen Baly.
In our region, we're making about one glass of wine per vine.
Relatively speaking, if you're taking a red producer of the same quality
you're making an entire bottle.
Thats a lot of work for a glass of wine.
Its passion, its devotion.
It's a lot of hard work all year long to ensure that the fruit is healthy at the time of harvest.
Extreme weather can also dramatically impact the price of wine production.
In recent years nature has not been on the growers side in the classic regions of France.
In Champagne and Burgundy vineyards have been devastated by spring frost and hail storms.
With summers becoming hotter and drier due to climate change.
So many factors influencing the potential return on investment. Grape growing and wine production definitely isn't for the faint-hearted