What is in the number?
Sadly, we are in an economic cycle of steadily increasing wine prices. Many wines from Europe are subject to varying amounts of tariff. Here at home products used in manufacturing and production of wine are also subject to import taxes. In Washington and Oregon new regulations around minimum wage, family leave and other parts of labor and environmental law are driving operating costs higher. With all of these price pressures the question frequently comes up, what goes into the cost of a bottle of wine?
What most wine consumers see first is the wine packaging. Bottles, closure, labels and when buying cases at a time the cardboard case box are all conscious decisions made by the winery and winemaker. The label front and back on every bottle has to be approved by both federal and state governments where the wine is produced before they can be used. This single step requires a fair amount of legal and filing fees that affect every bottle of wine. The approval is required every year a new vintage comes out.
The closure on the bottle of wine is another cost to be considered. The cheapest closure is a synthetic or plastic cork. A twist cap closure is about the same expense as a natural cork. The technology and bottling line requirements for a twist cap cause it to be more expensive than the wine consuming public perceives and brings the cost in at about the same level as natural cork. The foil that covers a natural or synthetic cork adds a bit more depending on the caliber of the foil. The imitation plastic foils are the least expensive and the heavy tin foil are more spendy, but most times worth it as they are far easier to cut.
When it comes to the actual bottle heavier gauge glass is more expensive than lighter weight bottles. The decision to use heavier bottles is frequently made when the wine itself is more expensive. The thought is that a heavyweight bottle communicates quality. The biggest challenge currently, is that China is the largest manufacturer of glass and the bottles from there are subject to tariff, causing price ripples across the domestic wine industry.
While supply and demand are a big part of the equation, especially on higher end collector wines there really are some basic facts that determine by varietal and wine making what a wine will cost. Sauvignon Blanc, Pinot Gris and other unoaked white wines are typically less expensive than white wines that spend time in an oak barrel like Chardonnay. The cost of the oak barrels is only part of that math though. For Chardonnay or any wine that is aged for a time before release white or red, the additional time prior to a winery being able to recoup any of their investment is a significant expense. This cost to carry the wine before selling it, or the lengthening of the investment cycle if you will adds a lot to the overall cost of the winery doing business.
The caliber of the oak barrels used in winemaking and how many vintages a winemaker will reuse those barrels also factor into the bottle cost. A winery that each year only uses new oak barrels will have much higher cost than those that use barrels for several vintages.
The grapes used in the wine is an obvious contributor to the cost of each bottle. Cabernet in red and Chardonnay in white are the most expensive varietals regardless of the growing region. Domestically, Napa Valley grown grapes sit atop the heap as far as cost. Within any appellation there are vineyards that command higher prices than others. It is true of the Walla Walla Valley, Yakima Valley, Willamette Valley Napa and Sonoma, there are just some vineyards farmed by the best growers, in the most ideal sites, and with the strictest cropping standards that get more per ton for their fruit than others.
Perhaps more significant than all these factors though is the marketing that goes into any winery or bottling from a winery. Winemakers and winery owners will make the decision that they are going to make a super-premium wine. They will use only the best grapes, dictating to the grower low cropping levels, meaning lower tonnage harvested per acre increasing the quality and cost. They will use the highest caliber glass bottles and best cork and foil that money can buy. And, most importantly they will make tiny quantities of their best wines, increasing demand for a small production.
What is most important to wine consumers though is whether you like the bottle you buy for what you paid for it. That is where your favorite wine professional helps to find you the perfect bottle for your palate and your budget, all while helping you understand what goes into the price of that bottle.
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George Balling is co-owner with his wife, Mary Lancaster, of the dinner party, a wine and gift shop in Coeur d’Alene by Costco. The dinner party has won the award for best wine shop in North Idaho twice, including for 2018. George is also published in several other publications around the country.
After working in wineries in California and judging many wine competitions, he moved to Coeur d’Alene with Mary more than 10 years ago to open the shop. You can also follow us on Facebook at facebook.com/#!/dinnerpartyshop.