Just like the aim of a car is to take you from point A to point B, it’s up to you how you get there. How important are safety features, engine size, climate-control or plush leather seats and is the price justifiable?
Whilst it often depends on your priorities coupled with your financial situation, I think we can all agree that a car with climate control and plush leather seats is costlier to produce than one without.
The difference in cost in making bulk wine and premium wine is distinct and I believe that even the most amateur wine-drinkers can tell the difference between a cheap bottle of wine retailing at less than €8 and a mid-level wine retailing at over €20. Just like the difference in a basic 1980’s car to what has become the standard today, the differences are clear.
When producing premium wine, there are certain underlying costs that are inevitable.
Terroir & vineyard management
In the beautiful area of Burgundy, home to some of the most expensive wines in the world, many producers go on about the importance of ‘terroir’ and they’ve got a point. ‘Terroir’ perfectly encapsulates the natural environment of the vine including soil, topography, and climate.
The yield reduction in quality wine is particularly costly. Premium wineries focus on reducing the number of bunches of grapes per vine so that the remaining bunches would be of better quality and intensity. This ‘green harvesting’ or ‘crop thinning’ means that in premium quality vines the number of clusters is sometimes even halved, thus halving the potential volume of wine.
The location of the vines is also an important cost factor, such that vines that are under stress produce better grapes. Since quality-grapes are grown in low-nutrient soils versus fertile soils, it is not uncommon to find the best vineyards on extremely steep slopes where it makes it so much more difficult and labour intensive, to tend to the vine, as opposed to cheaper vineyards found on flatter grounds, where machinery can be used to pick all the grapes in a couple of hours.
Furthermore, in many of premium wines, the winemaker would only just use the ‘free-run’ juice of the grapes, where the ‘grape must’ (grape juice) used is the first juice that comes out using gravity only. This would mean that no pressure is applied to grapes during this operation which is considered to attain the purest expression of the wine. The remaining grapes are sometimes pressed and used for cheaper-end wines that can often be branded differently.
Oak and other influences
Many of the most coveted wines in the world are aged in oak barrels, many of which use new oak. Putting wine in oak influences the flavour in two ways – it adds secondary flavours such as vanilla, coconut or baking spices and it exposes the wine to oxygen, thus softening the tannins and smoothening out the wine. Oxygen permeates the barrel and about 2% of the wine per year evaporates (known as the angels share), leaving the remaining juice more concentrated and intense.
Barrel prices can be expensive, where French oak barrels are more expensive than American oak and can cost upwards of one thousand euros a barrel and can even hit two or three thousand euros a barrel for the most in-demand. Knowing that each French barrel, known as barriques hold the volume of wine of around 300 bottles, the cost of wine aged in new barrels can easily shoot up the cost of the wine by around 5 or 6 euros a bottle for just the oak influence. Mid-level priced wines usually use second hand barrels, therefore saving money on the initial cost and also allowing them to age their wines in these barrels for several years, whereas cheap wines, usually under €10 a bottle, would use oak chips or oak staves during fermentation to impart similar flavours to the wine. On the bottle, we usually find descriptions such as ‘oak influence’ or ‘matured in oak’, which indicated this rather big difference in how the wine was aged.
Perception & all that
Without a shadow of doubt, taste is subjective and that’s part of the beauty of wine. It would be extremely boring if everyone liked the same type or style. The atmosphere, packaging and experience also play an important role in one’s perception of wine.
Way too often do people start oohing and aahing only after they’ve learned that the wine, they’ve been sipping, is from the top shelf of the price bracket. Price often dictates the pleasure we are expected to get, but when wine is tasted blind, it’s whole new ballgame and the results are fascinating. It’s not uncommon that the cheaper wines are preferred by the amateur wine drinker. I say this with the utmost respect and there is good reason behind this interesting result. Cheaper wines often have way more residual sugar than expensive wines.
Residual sugar is sugar left over in the wine after fermentation has finished. Most cheap wines, under the 10–15-euro bracket have more residual sugar then expensive wine to make the wine taste fruity and juicy. You can sometimes feel this film of sweetness on your tongue just as you would when drinking a soft drink. On the other hand, premium wines often have less residual sugar because the grape quality would be better and no added sweetness would be needed to make the wine taste juicy. There’s nothing wrong with residual sugar, but this might be your answer to the really bad hangover following the cheap bottle of wine you drank at last night’s barbeque.
There is also what we call an acquired taste. There are several flavours that are considered ‘acquired tastes’, were people who have not been substantially exposed to these flavours do not generally appreciate them. Vegetables spring to mind and the reason why most kids just don’t like them…there’s nothing particularly sweet and juicy about brussels sprouts. What fascinates me is the fact how an acquired taste may become your preferred choice despite it being inferior. This doesn’t just happen with wine – have you ever noticed how some (usually from the older generation) prefer inferior coffee because that is what they’re used to? If you’re used to ‘cheap’ wine with a large quantity of residual sugar, wine that will have less sweetness and less fruity components will invariably be a tad more complicated to enjoy - an ‘acquired’ taste. Here’s a little secret however, once you acquire the taste of premium wine with less residual sugar it’s very hard to go back. The beauty of it is that you’re now ready to take on so many new and interesting flavours that were masked by sweetness, but it also becomes much harder on the pocket.
But it need not be so financially draining. I guarantee that there are value wines out there that will not break the bank. I have often written articles on value wines such as Beaujolais Crus at €30 a bottle that can give Burgundy a run for its money (think Chateau Des Bachelards) that are far more characterful and delicious than most Burgundy Pinot Noirs at twice the price. The reason is that market price of the vine’s ‘terroir’ will also dictate an initial cost to the wine, and this is not a guarantee of quality. Buying a vineyard with the best ‘terroir’ in an established winegrowing area such as Bordeaux, Burgundy, Champagne, Piedmont or Tuscany is going to cost way more than buying a vineyard in a remote area in Chile or Argentina. The price of the land inevitably shoots up the cost of the product even before you’ve started making your wine. To compound the escalating costs in sought-after winemaking regions, labour costs and operational costs are generally steeper.
Though it can be a bit daunting for the average consumer to navigate through this terroir-driven pricing, it all boils down to specificity. The more specific the wine is, the more premium the cost. So, a Merlot from Chile is expected to be cheaper than a Merlot from a specific vineyard in a recognised appellation, such as Bolgheri in Tuscany. The former would be cheaper to produce because the grapes can be brought in from the cheaper vineyards in Chile, as opposed to being confined to grapes from one specific area or vineyard in Bolgheri irrelevant of the climatic circumstances of the vintage - this would mean that in a bad year, the producer is stuck with what was produced and cannot buy-in grapes from other vineyards. It is not uncommon to hear of super-premium vineyards not producing wine in certain bad vintages, suggesting that future vintages would need to make up for the losses.
Packaging, marketing, supply and demand
In most cases packaging is a concern for the marketing department, but in wine there are certain aspects in wine packaging that are not simply aesthetics. Take the closure for instance - premium wine closures are the key to allowing the wine to mature to its full potential. The wine stopper controls how much oxygen passes into the wine each year and is clearly an extremely important decision in the bottling process, especially when premium corks can cost upwards of €1 per cork.
Just like most other branded products, many premium and super-premium wine prices do fall down to brand recognition and the old adage of supply and the demand. Demand for luxury wines has risen exponentially over the years with the number of wealthy people searching out fine wines increasing tenfold within a short time-span. A bottle of Domaine Armand Rousseau’s Chambertin would surely fetch a four-figure sum, but even if you had the money, getting your hands on one bottle is still quite the task considering less then 9,000 bottles are produced annually. Moreso, once the wine gathers maturity, a wine of this calibre improves with age and diminishes in availability further pushing up the price year on year making ultra-premium wine one of the surest asset-investments.
The price of a bottle of Domaine de la Romanée-Conti, sometime upwards of an eye-watering €20,0000 is difficult to justify where supply and demand, recognition and status play a significant part in the cost. Conversely, I would undoubtedly spend more on a bottle of wine that focuses on quality by reducing yield, using premium oak aging and less residual sugar, but the highest price I’m happy to pay would be based on my personal opinion and financial situation for the wine to be justified in my eyes.
