How is the cost of wine calculated?
The most obvious cost of wine is the production cost. The production costs of wines from different regions around the world also vary.
First, whether the winery owns the land is important. Some wineries may lease or buy land from other wine merchants, which is a significant expense. In contrast, for those wine merchants who own ancestral land, the cost of land can be negligible, just like the "landlord's son" we often talk about, who owns land and acts willfully!
Second, whether these plots are flat also has a great impact on production costs. Slopes often produce better quality wines because the grapes receive more sunlight there, but if the slope is too steep, the grapes must be cultivated and harvested by hand, which incurs huge labor costs. Taking Mosel as an example, growing the same grapevines on a steep slope takes 3-4 times longer than on flat ground!
On the other hand, the higher the yield, the more wine can be made. However, some local governments strictly control yields to ensure wine quality. In addition, the vintage is also an important factor affecting the harvest. Whether the winery is organically certified or biodynamically certified is also one of the costs to consider. Although organic farming is admirable, it is not easy to keep grapevines in good growth condition, which means the winery needs to invest more money in the vineyard.
The equipment for making wine is also a cost. A 225-liter oak barrel costing about $1,000 can only hold 300 bottles of wine, so the cost per bottle immediately increases by $3.33! Bottle caps and packaging also affect the cost of wine. Bottle shape and cork, and even label design, are all essential expenses.
If wine is sold locally after being made, the cost will be relatively lower, which is why we can often buy good quality wine for a few euros in European supermarkets. However, wine is often shipped from the producing region to all over the world. Generally speaking, wines sold from neighboring countries or the country of origin will be relatively cheaper. Filling and bottling for transportation are different. More than 20% of the world's wine is transported in bulk containers. A large plastic container (Flexi-Tanks) in a container can transport 26,000 liters of wine at once. If standard containers are used, they can usually hold 12-13,000 bottles of wine, about 9,000 liters of wine. This difference is almost 3 times, which is really convenient! For some high-quality wines, the transportation cost using temperature-controlled containers is more than twice as high as that of ordinary wines.
In addition to production and transportation costs, there is also a part for promotion and marketing, such as participating in wine exhibitions, competitions, and advertising expenses. Wines that receive high scores from well-known wine critics are often much more expensive than those without ratings. Of course, supply and demand are one of the factors affecting prices. If a wine is highly sought after and the supply is very small, its price will certainly not be cheap.
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