Five Dollar vs. Fifty Dollar Wine

Question from Steve: When I’m shopping for a bottle of Cabernet, how come some sell for $5.00 and others for upwards of $50.00?

Reply: This is a complex question, so bear with me. When you compare that $5.00 Cab to the $50.00 one, cost of production is dramatically different.

The most important thing to consider is the grape source. Napa Valley Cabernet grapes sell for around $5000.00 a ton. If you buy Fresno Cab it will run you around $300.00/ton. Since wine is virtually 100% grape juice, with a kick, the price difference has a huge impact. that inexpensive bottle is likely to have a broad appellation, like “California”, rather than a specific one, like “Napa Valley.”

Another way to save a lot of money is to skip the barrel aging. American-oak barrels sell for around $400.00, and French for about $1000.00. They only hold 55 – 60 gallons. Managing wine in such small quantities is laborious.

If you have a 10,000 gallon tank, when it comes time to rack or fine the wine, you only have to do it once. If you manage the same amount of wine in 60-gallon barrels, you’ll have to rack about 170 times instead of just once.

Plus, up to 5% of the wine is lost to evaporation each year, which creates a lot of work. The winemaker needs to top up the barrels periodically or the wine will spoil. It’s common to do this once a month.

So, if that inexpensive wine is noticeably woody, chances are that an oak “tea bag” was submerged in a large tank instead actually barrel aging the wine.

If the wine sells for $50.00/bottle or more, it increases the likelihood that a high-priced wine consultant was involved. Here’s a bit of trivia for you: These high-profile global wine consultants are called “flying winemakers.” The inexpensive wine was probably made by recipe so that costly man-hours weren’t lost to endless tasting trials.

In fact, it may be that the inexpensive wine wasn’t made by the brand you see on the label at all. Quite often inexpensive wine is made of the cast offs from various wineries. Unwanted wine is bought and sold in bulk every day.

I’m not quite sure where to draw the line, but as the price creeps upward from $50.00, cost of production begins to fade in importance and supply and demand moves into the forefront. A winery can only spend so much money making a bottle of wine.

I hope that answers your question. Keep these great questions coming! Cheers!

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