What Makes Some Wines So Expensive?

Have you ever wondered why one wine can be so much more expensive than another of the same varietal, region and year? There is a reason behind the fluctuating prices and why some wines are more expensive than others. Many wine drinkers have asked this question only to get a generic answer stating that it is “better quality”. While it can be true that more expensive wines can be better quality when compared to others, there is a more interesting and in-depth answer that will give you a better understanding.

High Costs to Make the Wine

The price fluctuation usually depends on the wine producers and their cost of production, raw materials, labor, utilities, sales, marketing and administrative duties. A lot of planning, thought and hard work go into creating a bottle of wine. The quality of glass bottles and corks that the wine producer uses to store and sell the wine in can be costly. In addition to paying employees, using specific materials to create the wine can drive the cost up as well. Usually winemakers try their best to use good quality items to keep their cost of production at a decent rate, while others focus more on purposely creating an expensive wine.

Here are some specifics on what can drive up the cost of a wine bottle:

• Aging – Not all wines get better with age, but some definitely do. Time will change the taste of the fruit flavors in the wine, making them more subtle. Aging wines will also reduce the acidity and tannin, causing a smoother drinking experience. The time it takes to age these bottles can add up since it’s occupying valuable space in a winemaker’s cellar.
• Terroir – The location, soil and climate can all affect the wine quality and taste. This makes certain regions more in demand than others, bumping up the price of the terroir – therefore, increasing the cost of the wine produced there.
• Oak barrels – Wines aged in oak barrels have a unique flavor and are considered to be overall better quality. The barrels themselves are expensive, so using them in the wine aging process adds to the final bottle cost.

Perceived Value

The general concept of “perceived value” is that expensive wines can cost so much because the price reflects how much consumers are willing to pay. To compare it to another industry, perceived value is one reason why designer clothing brands can get away with pricing their items so high and still sell.

Consumers are usually unaware of the cost of production of the wine. However, they naturally have an instinct about the wine and decide the worth of a product and their perceived value of it. Take the study by Brock University professor, Dr Antonia Mantonakis, as an example. It found that wine consumers were willing to pay more money for a wine with a difficult-to-pronounce name. The explanation? Dr. Mantonakis stated that “Things that are difficult to pronounce are unfamiliar because they are usually rare.” And naturally, rare items cost most, hence the perception.

This is also the reason why some wine producers use marketing to associate their wine with a very high-end product – to create a greater perceived value for their wine. As we know, this concept works well, since consumers are willing to dish out hundreds, or even thousands of dollars, for one bottle. Are those four-digit wines amazing to drink? Usually. Are they actually worth that much? Probably not.

There is nothing wrong with purchasing an expensive bottle of wine. Many times, knowing it’s coming from a quality name in the wine business is reason enough to pay a bit extra. When purchasing wine that has an increased price tag when compared to others, remember to ask questions and find what truly makes the wine expensive. Then ask yourself if purchasing the bottle is worth it to you. Once you make your decision, focus on enjoying your choice, whether it is the expensive bottle or not, and share it with family and friends.