You have probably already asked yourself the question: how can we justify the price difference between different bottles of wine? From the bottle sold in supermarkets for €2-3, to the most expensive bottles, which can sometimes even exceed the €10,000 mark… how do you find your way?
The cost of returns ?
As you can imagine, the final price of a bottle of wine depends first of all on its cost price, that is to say the manufacturing price of the bottle and the wine. To summarize, this cost price is divided into three main parts: the cost of growing the vines, the costs of vinification and bottling, and finally, the cost of marketing.
Vine cultivation
Do you know how many grapes are needed for each 75cl bottle? The answer is simple to remember: 1kg! So that’s a bunch of grapes!
This cost includes the real estate depreciation of the land, the maintenance costs of the vineyard and the harvest, so it can vary from one winegrower to another. Note that the price of a hectare of vines varies enormously depending on the region: in Champagne, we are on average at 1.5 million euros per hectare, while in Languedoc, we are more around 20,000 euros. per hectare. But these prices also vary within the same region: in Bordeaux for example, a hectare costs 1.65 million euros in Pauillac, compared to €15,000 in AOP Bordeaux. The gap is already widening here, as you might expect.
Regular (permanent-term employees) or seasonal (permanent-term contract during harvest period) payroll costs also represent a share in the price of a bottle of wine. Some vineyards, due to their topography and geography, do not necessarily allow mechanization: harvesting and maintenance must be done by hand, their cost price thus becomes higher.
In addition, certain Houses, particularly in Champagne, do not grow all their grapes and buy part of them through trading: they are thus subject to price fluctuations, due to supply and demand.
Winemaking and bottling
Then, with regard to the cost of winemaking, we first find the depreciation of equipment, such as vats and presses, more quickly amortized in cooperatives for example where the equipment is shared. But also the costs of analysis and oenological products, or even the bottles themselves, the corks and the labels: costs not to be neglected!
Also, not to forget, of course the cost of storage must be taken into account: buildings, charges such as electricity, or even the installation of security measures.
Commercialization
Finally, we find in the cost price, the cost of marketing.
First of all, winegrowers must pay taxes in order to put their wines on the market: these are the capsules, if you want more details on these, do not hesitate to read our article to understand the meaning of the capsules wines !
Also, you have to take into account the costs of deliveries and the online store, if it exists. Then, everything that will allow you to sell the wine: communication, marketing or even participation in trade fairs. This is an item that is sometimes underestimated, and which varies depending on the area! Some place little importance on their communication, while others, such as the major champagne houses, use it as a strength to build a real brand image.
The law of supply and demand
And like every business, obviously, it is subject to the law of supply and demand and what each of us is prepared to pay for this or that bottle. Certain regions and appellations are obviously more renowned and better rated than others, but what is this notoriety due to? To the quality of the terroirs, to ancestral know-how, to the more or less rigorous specifications of certain appellations, but also to the rarity of certain bottles. Indeed, small appellations, such as Condrieu and its 168 hectares, will not have the same impact as larger, and therefore more common, vineyards such as Gigondas and its 1,233 hectares.
And you, what price would you be willing to put in a bottle?