Why are Some Wines Crazy Expensive?

expensive wine

When shopping for wines it’s hard not to notice that the prices of wines vary by, sometimes, extremely large amounts. You can find some cheap bottles of wine for around $5, but other bottles are priced at hundreds of dollars. Why is it that some wines are so expensive while other wines are so cheap?

Are the more expensive wines really worth the added cost when you’re looking for something to enjoy during dinner?

The overall thinking is that cheaper wine just doesn’t taste as good as the more expensive bottles, but what is different about the process in making those wines that makes it cost so much more? And, does it actually taste better than the cheaper wines?

Let’s take a look at why one bottle of wine may cost $5, while another bottle may cost $100, and explain what you can expect from that more expensive bottle, and why it costs so much more than the cheaper one.

Cheap Wine vs. Expensive Wine

There are a number of things that factor in to why one wine may cost more than another, or why certain wines cost hundreds of dollars. Some of these elements may seem pretty obvious, but others may surprise you.

Raw Materials / Production

The materials used to create wine, along with the resources and manpower required, cost money. Depending on the types of grapes being used, the storage methods, other materials that may be used to influence the wine itself, or help with the harvesting, all have to be taken into account when considering the price of a bottle of wine.

Cheaper wines are most likely mass produced and stored in stainless steel tanks, whereas more expensive wines may be harvested by hand by a small team and stored in wood barrels to help with the aging process.

The length of time that a wine is aged, and in what type of barrels, can also factor into the cost. Wines that aren’t aged very long can be turned over quickly and bottled much quicker than wines that need months or years to correctly age. And while those wines are aging, they are taking up space in barrels, which means that more barrels need to be acquired in order to begin the aging process of recently harvested grapes.

The more costs associated with producing a wine will directly impact the cost of the bottle once it reaches your glass.

Vineyard Yield

The size of a vineyard, and the amount of wine that can be produced from certain types of grapes, can also play into the price. A high-yield grape from a mass-producing vineyard isn’t going to cost as much as a low-yielding grape from a boutique vineyard. A smaller vineyard will need to sell their product at a higher cost in order to make enough money to cover their production costs. This is the same concept as why a company like Anheuser-Busch is able to sell Bud Light for much cheaper than your local craft brewery. They produce much more beer, cheaply, so they are able to pass that on to the customers. Sometimes this leads to quality degradation, and a worse tasting product (depending on who you ask), but they are able to keep things more consistent and keep their costs down.

Distribution Mark Ups

As wine traves from the vineyard/winemaker to store shelves, or restaurants, there are many channels that it must go through. Each one of those steps in the distribution process is going to have a slight markup because each of those steps is handled by a different company, and those companies need to make money for themselves.

By the time a bottle of wine has reached store shelves its already gone through at least the vineyard, winemaker, bottler, distributor and final the retail seller. Sometimes there are more steps, sometimes less, but for each step that the wine travels through, there is going to be a cost added on so those businesses can make money. And the largest markups usually come when you order a glass, or bottle, of wine at a restaurant.

Just Because / Perceived Value

One of the other reasons that wine can become expensive is just because…

If a winemaker feels that his product is worth a certain price, they are free to sell it for whatever amount they see fit. If a wine gets a great review, or starts to become popular, there’s nothing saying that the creator can’t raise the price.

The wine is only too expensive when someone isn’t willing to pay for it. But if people continue to pay a premium for a specific bottle of wine, then it wouldn’t make sense to lower the price.

So basically there doesn’t have to be a reason for a certain wine to cost so much, as long as people are willing to pay for it.

Wine comes in all flavors, colors, and prices, it’s just a matter of finding what you like, and what you perceive to be a good value. Just because a wine is extremely expensive, and other people swear it tastes great, doesn’t mean that it’s going to taste the same to you. There are plenty of delicious wines out there that don’t cost hundreds of dollars per bottle, so don’t let a price tag determine a wine’s value.