Shopping for wine can be an overwhelming experience.
Liquor stores can have dozens of wine bottles sitting on their shelves, while other bottles
are prominently featured in fancy displays.
Wine is also available at a wide variety of price points.
One popular cheap wine is the Charles Shaw line, which is also known as “Two Buck Chuck.”
A wine education website called Wine Folly classifies wine $4 and under to be “Extreme
Value” wine, while another website called Vinepair describes Target’s $5 line of wines
as “super value” wine.
On the other end of the price spectrum, wines such as Clarendon Hills 2010 Astralis can
cost $200 and more.
According to a wine database called Wine-Searcher, the most expensive wine in the world is a
French wine called Domaine de la Romanee-Conti Romanee-Conti Grand Cru (Doughmin de la Ro-ma-NEE
Con-TEE Ro-ma-NEE Con-Tee GrA Cru), costing an average of $19,327 a bottle.
If that’s a little out of your price range, there are what we will call “mid-range”
wines that are more affordable to the average consumer.
What makes one wine cost more than another?
We’ll find out in this episode of The Infographics Show, “The Price of Wine Explained.”
Wine experts have pinpointed several factors that affect the cost of wine.
One of them is the choice of wine grapes.
Premium grapes such as Cabernet Sauvignon from Napa Valley cost $6,289 per ton in 2016,
while the average price of Pinot Gris grapes from Oregon was $1,199 per ton in the same
year.
According to lifehacker.com, other important factors include the geographical region where
the grapes are grown and the winemaker’s production process.
You can see how these factors come into play with an overview of how cheap wines, mid-range
wines, and expensive wines are made.
The guiding principle of making cheap wines is quantity over quality.
Wine Folly notes “the less we spend, the less money goes towards quality grapes.”
The grapes are mass-produced and mechanically harvested in “generalized regions” such
as California’s Central Valley where grapes are easy to grow but lack the prestige of
upscale vineyards.
The California Winery Advisor also states that grapes used in cheap wine produce “watery
juice with lots of sugar.”
They may not be as flavorful as the grapes used in more expensive wines, and the wine
produced from these grapes is not as colorful as well.
The lack of flavor and color are addressed in the production process.
As the wine makes its way through a “large factory-style” winery, a variety of additives
such as tannin powder may be thrown into large wine vats to make the wine more palatable.
Another common additive is sulfur dioxide, which helps to prevent oxidation and the “flat”
taste oxidation produces.
According to Wine Folly, cheap wine relies more on residual sugar, which is sugar that
is not converted to alcohol during the winemaking process, for sweetness than expensive wines.
In fact, expensive wines have “little or no residual sugar” at all.
A coloring additive commonly used in cheap wine is called Mega Purple.
The California Winery Advisor describes it as “a wine concentrate ma[d]e from very
deeply colored red grapes.”
Both strong in color and flavor, it can give wine a deep red color and “fruity flavors.”
The use of Mega Purple has stirred controversy in the winemaking world because it is seen
as a deceptive practice.
As one wine expert put it, mass-produced wine will “taste harsh and vegetal,” and Mega
Purple is one secret tool used to “shape up such craptacular vino.”
Wine Folly notes other cost-cutting measures used in the production of cheap wine.
For instance, cheap wine is not given much time to age.
A $4 bottle of wine called Tilia Merlot was “released after 1.5 years aging.”
The wine may be allowed to age in American oak barrels that cost about half as much as
French oak barrels according to Wines and Vines, but frequently no oak barrels are used
at all.
Cheap wine is usually processed and stored in the previously mentioned vats.
To fake the flavor of wine aged in oak barrels, producers of cheap wine may dump in what the
California Winery Advisor describes as “oak chips or a bag of oak sawdust” into the
vats.
Mid-range winemakers show a bit more concern for quality as well as affordability.
They use better quality grapes than those used in cheap wine.
In some cases, good wine within this price range may be made with “undervalued grapes”
that “resemble familiar favorites but offer better value” according to Wine Folly.
Some of these wines may be mass-produced, but others are aged in oak barrels.
If you are willing to spend about $9-$10, Wine Folly states that you can get wines that
“are mostly from large US, French, and Italian wineries that focus on good baseline quality
wine for everyday drinking.”
Other good sources of mid-range wine are “undervalued wine regions” such as the Douro Valley in
Portugal and the Yecla and Alicante regions in Spain.
One master sommelier named Devon Broglie believes that good wines are also available in the
$15-$25 price range.
In an interview with Business Insider, he says, "In that price point is where you get
an honest, genuine expression of what a great variety is supposed to taste like, from the
region of the world that it comes from, made by an actual person."
Winemakers who produce expensive wines care the most about the quality of their wine.
In contrast to makers of cheap wine, they focus on quality over quantity.
According to Wine Folly, they use “premium single-varietal grapes.”
These grapes are carefully cultivated in areas well-known for high-quality winemaking such
as the Napa Valley in California or Burgundy, France.
The region where the grapes are grown matter more for expensive wine because people are
paying more for what is known as “terroir” of the wine, which Wine Folly defines as “how
a particular region’s climate, soils and aspect (terrain) affect the taste of wine.”
Earth Magazine also notes that terroir embodies “the complex influences that result in a
wine’s unique traits.”
Production of expensive wines is done on a smaller scale than the production of cheap
wines.
This smaller production limits the amount available, which creates a low supply that
adds to the price of the wine.
The use of manual labor adds to the production costs as well.
The wine grapes are “hand harvested” rather than mechanically picked.
These winemakers are even picky about what juice goes into the wine.
According to a New York Times article, “high-end winemakers often use only the ‘free-run
juice,’ or juice that bleeds from the grape with minimal pressure.”
Other aspects of the production process are expensive too.
Instead of factory-style vats, the wine is allowed to age in expensive French oak barrels.
One winery featured in a Wine and Vines article spent $900 for a 60-gallon French oak barrel.
There are two advantages of “oaking” wine according to Wine Folly.
It “adds oak ‘flavors’ to a wine” such as almond in red wine and vanilla in
both red and white wine.
It also “exposes the wine to oxygen,” which causes the “tannins to become less
intense and the taste of the wine becomes smoother.”
In addition, the wine is allowed to age for years or sometimes decades depending on the
type of wine.
Wine Folly states that “time changes the taste of the fruit flavors in a wine as well
as reduces the acidity and tannin in a wine,” resulting in a “rounder and smoother”
taste.
However, expensive wines are not totally free of additives.
For example, a Popsugar article states that “all wine contains sulfites.”
While sulfites are added as a preservative, they “also occur naturally after fermentation
— so wine contains sulfites from the very beginning.”
And enologist (winemaking specialist) Andrew Waterhouse claims that “even the most expensive
red wines often have their color boosted with the use of ‘mega-red’ or ‘mega-purple’
juice from other grape varieties.”
Whether you buy a cheap, mid-range, or expensive bottle of wine, you will be paying for the
cost of packaging and distributing the wine.
According to one source, glass bottles can range in price from $0.60 cents each to $3.50
or more per bottle.
Cheap corks can cost as little as $0.25, but the “finest hand-selected cork, with an
imprinted logo on the top and around the side will cost $1.50 per cork.”
There is also a capsule that goes around the neck and cork of the wine bottle as well,
such as a “tin capsule/foil with embossed and printed logo” that costs $0.70 each.
While these prices may not seem very high, the costs add up for wineries that have to
pay for hundreds or even thousands of these different packaging components, and they pass
this cost on to the consumer.
In addition, the bottles need labels, and a professionally designed wine label can cost
$5,000 or more.
Another source of markups in the price of wine in America is distribution.
According to Vinepair, there is a “three-tier system” of distribution in the US.
Wineries can’t just go to stores and restaurants and sell them their wine directly.
By law, the “distributor is the only one legally allowed to sell to retail.”
The distributor wants to make a profit, so they will “take the price they paid the
winery for the bottle and double it when they sell it to the store.”
The store then adds another markup on the wine purchased from the distributor, multiplying
it by 1.5 in most cases.
This means that a wine sold by a winery to a distributor for $5 will end up costing the
consumer $15.
You can expect even higher markups if you purchase wine from a restaurant.
According to Vinepair, if you buy wine by the glass, the restaurant charges you the
same price it spent to purchase an entire bottle of that wine.
If the restaurant spent $10 on a bottle of wine, it will charge the consumer $10 for
a glass of that wine.
Vinepair points out “with 4-5 pours in a bottle, that means the restaurant takes in
a nice profit of $30 to $40 per bottle.”
Restaurants can also make a profit from selling entire bottles of wine to their customers,
marking it up at a price that is “anything from 2 to 5” times more than what they spent
to buy it from a distributor.
If a restaurant bought a bottle of wine for $15, it may charge its customers between $30-$75
for that bottle of wine.
What is the most expensive wine that you ever purchased?
Was it worth the price?
Let us know in the comments!
Also, be sure to check out our other video called Why Does the B2 Stealth Bomber Cost
$2 Billion?
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