Is a $100 bottle of wine really that much better than a $20 bottle?

August 17, 2016

Is a $100 bottle of wine really that much better than a $20 bottle?

It’s a logical question, and the more time you spend browsing the shelves at your local wine shop, the more likely you are to ponder the thought. The short answer is “not necessarily.” 

Grape vines begin to bud in March-April, and the fruit is harvested in early Autumn. The process for tending to and harvesting the grapes is basically the same for all wine. Other costs that don’t really vary from producer to producer are things like bottles, labels, corks and capsules (foils). There may be some variation according to the size and weight of the bottle and the quality of closure used, but for all intents and purposes, those details are not going to affect the overall price of the wine.

The long answer to the question really depends on the juice and where it comes from - its terroir. An acre of land under vine in Napa can sell for $300,000 per acre or more, depending on the location. Head south 150 miles to the Central Coast region, and an acre goes for just $15-25k. That variable alone will result in a higher asking price for the Napa wine.

Now, consider the fact that vineyards yield as many as 7,200 bottles and as few as 720 per acre. It goes without saying that someone producing fewer bottles of wine will ask more per bottle than a more prolific producer on similar property. Taking these variables into consideration, it becomes clear very quickly why the initial price of a bottle can vary widely. It is more obvious, too, why a producer growing grapes on less desirable land and churning out a high number of bottles - a la Two-Buck Chuck - will not command a high retail price.

A final component to the mix is the wine-maker: the individual behind the magic, the one in charge of marrying art and science and producing something worth drinking, something worth paying more for. A highly-regarded winemaker strengthens a brand and can send a certain label’s prices into the stratosphere. 

Ultimately, a bottle of wine is only worth what someone is willing to pay for it. It might seem irrational for you and me to spend $200 on a single bottle of wine, but someone will. Rest assured, however: that someone does not have to be you!

Claudine Wines sources from some of the best known vineyards, the most revered appellations in Napa Valley.  While we cannot tell you exactly where we got the wine, we can tell you that the winemaker is world-renowned, and the retail price of the cabernet from the winery is decidedly north of $100.  

But we’ve said enough! We can say no more! For now. 

Stay tuned for the next chapter of The Economics of Wine: The Making of Claudine.

Cheers,

-Brian




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