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Some wines can cost more than a fine dining experience at a three star Michelin restaurant. Some wines can cost less than a happy meal at McDonald’s. How can the prices of wines range that much? 

If you think a $100 (USD) bottle is expensive, then you would be shocked at the prices at fine wine auction houses. The most expensive bottle of wine was an Imperial (6L) bottle of 1992 Screaming Eagle Cabernet that was sold for $500,000 at an auction for charity in 2000. 

When you are buying a bottle of wine, you are getting more than just fermented grape juice. This article will explain the differences between cheap and expensive wines and answer the question, “Why can wine be so expensive?”

How can a single bottle of wine cost so much? After all, whether a bottle of wine is expensive or not, they are only made from grapes. There are a number of reasons why you may be paying 10 times the price for high-end wines. Let's break down the costs of wine production and explain what goes into making cheap bottles like Two Buck Chuck and premium wines like Screaming Eagle.


Cheap versus expensive wine, Charles Shaw and Screaming Eagle wineCharles Shaw Two Buck Chuck and Screaming Eagle, both famous for their prices

It is safe to say that all cheap wines are made by large producers that make wine in bulk. They represent a huge proportion of the wine that is consumed. Approximately 95% of wine made in America comes from only 5 wineries. They are able to sell wines at bargain prices due to the sheer volume of wine that they make. But aside from volume there are other factors that contribute to the astounding price difference.

Cheap Wine vs Eapensive WineWould you be able to identify the differences between cheap and expensive wines?

 

Machine Harvesting vs. Hand Harvesting

Machine HarvesterMechanical harvesting, is fast and cuts down on labour costs

Large producers have more automated processes, whereas small wineries that produce expensive wines use more labour intensive techniques. There are now machines that do all sorts of vineyard and winery processes. From pruning and harvesting to sorting and punch downs. In the long term, investing in machinery will save on labour costs. You need only one person to operate a machine harvester as opposed to an entire team of hand harvesters year after year. The grapes that are used for cheaper wines are grown on large flat expanses of land that will produce high yields with little disease pressure. The vines will be planted and trained in straight rows to allow for machines to easily pass through.

 Steep Vineyards In MoselSteep vineyards in Mosel, ideal for maximum sun exposure and optimal ripening conditions, but not so much for hand harvesting

Small wineries however, perform a lot of processes by hand. In some vineyards it is simply not possible to use machines. Take the Riesling grown on the steep hills in Mosel or the Bush vines in Stellenbosch, there are no machines that would be able to harvest or prune those vines. Hand harvesting is more gentle and allows for the first round of sorting to begin out in the vineyards. Some premium wineries will do a second sorting once all the fruit has been collected at the winery. This ensures that only the best grapes are used to make the wine.

Machine Harvesting Hand Harvesting
  • Fast and efficient
  • Cheap
  • Can operate 24/7
  • No grape sorting, will harvest underripe, overripe and rotten bunches
  • Will also harvest MOG (material other than grape) e.g insects, branches and animals
  • Slow 
  • Expensive
  • Labour intensive
  • Gentle harvesting
  • Grape sorting, no underripe, overripe or rotten grapes
  • No MOG will be harvested 

 

Location of Vineyards

Where the grapes come from plays an integral part of how expensive a wine will be. Grapes are the main ingredient after all. To put it into perspective; Cabernet Sauvignon from the Central Coast (where a lot of Californian bulk wine is grown) costs about $1800/ton, where as Cabernet Sauvignon grown in Napa Valley averages at $7000/ton.

To Kalon Vineyard In CaliforniaTo-Kalon Vineyard in Oakville, California has a reputation as big as its price tag

However, there are cases where famous vineyards will demand premium prices for their grapes. The To-Kalon vineyard in Oakville has a long history in Napa Valley, growing grapes for the likes of Robert Mondavi. Nowadays, their Cabernet Sauvignon sells for $18,000 to $25,000 per ton, with the stipulation that the producers must charge a minimum of $125 per bottle of Beckstoffer To-Kalon.

Why is there such a price difference between these grapes? Expensive wines are grown in vineyards that have a reputation for producing high quality grapes. There are well-known regions and within those, are sub-regions that are designated appellations. France is famous for their intricate and complicated labelling, which indicates where the grapes are grown and that is the tell-tale sign of the quality of wine.

Appellations are in place to protect the vineyards and the regions so that the quality of grapes will remain consistent. This can mean that certain laws must be adhered to, so that the fruit produced is a true representation of the terrior. Usually these vineyards will have lower yields, which equates to concentrated flavour. Other laws may control pesticide use, irrigation and varietal. Small vineyard appellations in particular have the ability to drive wine prices up, because of limited production capacity.

Domaine de la Romanée-Conti one of the most sought after wines in the worldOne of the most sought after and most counterfeited wines in the world (Photo credit Drink Tails)

Domaine de la Romanée-Conti is one of the most famous producers in Burgundy, they make wines from Grand Cru vineyards that are small. They only produce 6000-8000 cases per year, it is a combination of fame, scarcity and high demand of their wines that drive their prices sky-high. Their Romanée-Conti sells for more than $10,000 per bottle.

 

Barrel Ageing

Out of the most expensive wines in the world, most of them would have seen some form of oak. Oak contributes to those velvety tannins and baking spice aromas. Wines that have been aged in oak are more expensive because oak barrels are expensive and not only that, there is a lot of labour that goes into barrel work. Barrels are not airtight vessels, which can be a pro and a con. Evaporation of wine will occur and loss of wine means loss of money, but the wine will also develop pleasant oxidised characters that add to the complexity of the wine.

Wine BarrelsBarrel use can add costs from $1 to $5 per bottle, $1 per year of storage and $1.70 in labour

Pros and Cons of barrel ageing:

Pros Cons
  • Integration of oak tannins
  • Flavour extraction from the oak
  • Aeration, tiny amounts of oxygen to aid in ageing process to develop complexity
  • adds quality and value to the wine
  • Expensive
  • Takes up a lot of storage space
  • Need to be stored in temperature and humidity controlled environment
  • Angels share, up to 2% of volume evaporated per year
  • Labour intensive; cleaning, topping, stirring

Different oak barrels will come at different prices. French barrels are the most expensive, costing between $850-$4000. American and Hungarian barrels are cheaper costing between $360-$800 and $560-$700 respectively. Oak barrels are like tea bags in a way, the more you use it, the less flavour it will offer. They only impart flavour for the first 3 uses, after that they become neutral storage vessels. So to keep the style of an oaked wine, the winery will have to constantly replenish their supply of barrels.

If you have detected oak aromas in cheap wine, it is more likely that they have used American oak barrels, or have used oak chips and staves during the winemaking process. Chips and staves give out similar toasted aromas but cannot compare to the rounded tannins and oak character of oak barrels.

 

Bottle Ageing

Wine Cellar for ageing and storing winesStorage in wine cellars costs time, space and power

Another ageing process can occur in the bottle. The point of this is to let the tannins and acidity soften and play an integral part of the balance between body, aroma and flavour. Cheap wines are rarely kept in the cellar for bottle ageing before release. Large producers want to sell their wine as soon as it comes off the bottling line. The truth is that cheap wines will not benefit from bottle ageing; it is best to drink these wines while they are fresh.

Wines that are best suited to extended time in bottle ageing will be wines that are made from premium fruit and have also been barrel aged. These wines have a concentrated fruit profile that evolves elegantly in the bottle with the oak character. Bottle ageing also adds to the cost of production, as storage means time and space. These bottles will be stored in temperature and humidity controlled rooms and sealed with high quality natural cork closures that protect the wine.

The longer the wine spends in oak and bottle ageing, the more the wine will cost. For example, Spanish wines are labelled depending how long they have been aged before release. So as you move from Ciranza to Reserva to Grand Reserva, you will see an increase in price because the difference between each successive labelling term is that the wines have had longer periods of ageing in oak and in bottle.

Premium wines will also have long cellaring potential that will increase the quality the longer you store it. Read about how to store your wines properly at home here. 

 

Packaging

Dufferent Types of Wine Bottle ClosuresSo much variety: from screw cap to synthetic and natural cork to glass closures (Photo credit The Sommelier Update)

They say you should never trust a book by its cover, but everyone has bought a bottle of wine because they preferred the label. Wine comes in glass bottles, but not all glass bottles are made equal. Bottles come in range of quality and design; you can customise the colour, weight, shape, depth of punt, you name it. Some cheaper wines will choose to be packaged in lighter glass bottles to reduce the cost of shipping and delivery.

Other ways to cut costs in terms of packaging include cheaper label design, and screw-cap or synthetic cork closures. A lot of inexpensive wines use screw-cap because it is easy to open, retains the freshness of the wine, has no risk of cork taint and they just so happen to be the cheapest type of closure.

Expensive wines will invest more money on the packaging because they want the quality of the wine to be reflected on the appearance. High quality natural corks will be used, perhaps even wax sealed to protect the wine, with embellished label design and of course high-quality glass bottles. They may even come with a fancy case.

 

Taste and End Result

So now that we have covered what goes into making cheap and expensive wines, how different do they taste and what can you expect from a bottle of premium wine?

One of the main differences on the palate would be the sweetness of the wine. Cheap wines often have residual sugar to add body to the wine; sweetness can give the perception of fruitiness. Adding sugar masks the lack of character and mouthfeel of cheap wines. Cheap wines are simple and easy to drink. They are often blends of grapes and regions, so would not be a true example of varietal or appellation.

Preium Grand Cru WinesWines with the Grand Cru label are made from famous vineyards that produce the best grapes

Expensive wines will have no or very little residual sugar. You can expect the wines to have depth and concentration. The wines will display a complex array of aromas that will develop with bottle ageing. Having residual sugar in premium wines will only detract from the pure fruit character that represents their terroir. With expensive wines you will be able to taste the true characters of the varietal, or a perfectly balanced blend that showcases the appellation.

As with vineyard laws, appellations also cover the scope of winemaking. Old world appellations are far more rigid in terms of winemaking and viticultre laws. Minimun barrel ageing, alcohol percentage and even which varietals can be blended together are tightly regulated. This again, is to protect the region and the quality of wines. The cost of these wines have remained at premium prices because the wineries have followed the laws of the appellations and therefore resulted in wines that are true to the region and long history of winemaking. It is also because of these laws, that some vintages are more valuable that others. Years that have shown perfect ripening and harvest conditions will result in stunning wines that break the bank.  


There is a lot that goes into making that expensive bottle that you gawk at in the wine store. It is not as simple as the fermented juice of the humble grape. Sometimes it is the prestige of drinking a famous label, one that has been historically proven to produce the highest quality wines over the course of over a hundred years.

There is nothing wrong with enjoying cheap wines, but there is a huge difference between $10 wines and $100 wines in terms of winemaking and quality.



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Nicole Ng

Written by Nicole Ng

This kiwi was born and raised in Middle-earth. Nicole studied Wine Science at the University of Auckland on the beautiful Waiheke Island. Since graduating, she has been harvest hopping around the world. Completing vintages in Marlborough, Napa Valley, Hunter Valley, Ashikaga, and Auckland.

She manages Asian Wine Review and Rosé Revolution which takes up most of her time, but you will also see her helping out at many of TFW Masterclasses too!

With her free time, she likes to find cheap eats around Hong Kong and spend time outdoors. Somehow she is always hungry and has convinced her family and friends that she has a second stomach for dessert.

Unforgettable wine tastings: Corison Winery in Napa valley and Destiny Bay in Waiheke Island.