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Great Grape News |
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July 2002
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What does it cost to produce a bottle of wine?The next time you are enjoying your favorite glass of California wine, think of how much it actually costs to produce. Many factors influence today’s cost of a bottle of wine. In this article we will concentrate on only the key items that collectively determine the final price of a bottle Starting a vineyard Before a single grape can be grown we need to purchase some land that is favorable and has the right soil conditions for grape growing. An acre of land in Napa Valley cost upwards of $100,000. Planting grapevines will cost from $13,000 to $21,000 per acre with an average cost of about $16,000. Maintenance runs about $2,000 per year per acre. It takes approximately 5 years for the vineyard to become mature. Then it should begin to produce from 4 to 8 tons of grapes per acre, figuring an average of 5.5 tons per acre. As you might imagine, purchasing land in Napa Valley today to plant grapevines would not be cost effective and would demand an astronomical price per bottle. Let’s assume the land was purchase some years ago at a cost from $15,000 to $28,000 per acre with an average cost of approximately $22,500 per acre. Chardonnay grapes sell for approximately $1,400-$1,600 per ton. Cabernet Sauvignon sells from about $1,500 to $1,900. One ton of grapes make between 165 and 195 gallons of wine. It takes roughly 2.4 gallons of wine to fill a case of twelve 750ml bottles. Each ton of grapes will make 60 to 65 cases of wine. Making the Wine 
Once the harvested grapes are pressed the juice has to be stored in steel tanks or oak barrels. Storage cost vary dramatically and depend on whether the juice is stored and fermented in tanks or oak barrels and whether we are making white wine like Chardonnay, which does not require much aging and generally costs less to store. The storage will cost approximately $0.10 per gallon per month to store. If the winery makes a red wine like Cabernet Sauvignon, which require a much longer aging and fermenting time to cost would be much higher. To give you a comparison, a premium red French wine costs approximately 80 cents per bottle per month to store and age. American oak barrels sell for approximately $250, or you can buy new French oak barrels for about $520 a piece. Older French barrels sell for $85 to $350 for a four-year-old barrel and a one-year-old barrel respectively. Once the juice has fermented into wine we are ready for the bottling. It costs between $12 to $16 a case to bottle the wine. This includes the bottles, corks, foil, label and the box.
Now that the wine is bottled it needs to be stored until sold. Wineries that do not have the refrigerated storage space may have to rent the space. The cost to rent will run about $0.50 per case per month. This figure includes moving the boxes within the storage facility. Selling the Wine Selling wine requires sales persons and a distributor. Each will add their cost to the bottle price. This adds approximately 50% of the ultimate consumer cost to each bottle. Before the wine gets to the wholesaler the wine will also need to be shipped and depending on destination this also may add substantial cost. Finally your bottle ends up in your retailers store. There, another 25% to 35% or so is added before you get to pay for the wine. In summery, making wine is a very expensive proposition. It requires capital and it is time consuming. The most important question now is do you like the wine or is it plonk? What makes a premium wine?Premium wines require special handling and therefore are always more expensive. For example, additional pruning during the growing season to trim back leaves and remove underdeveloped grapes may add up to another $2000 per acre anually. Grapes may be hand selected. That is, only the good grapes are pulled from the vine, the remaining ones may be machine harvested. Aging the wine may require only new French barrels and only of high quality, thus the winemaker pays a premium when purchasing these barrels. A winemaker making bulk wine might get as much as four times the juice from an acre of grapes. Also, they will source their grapes from anywhere, mixing and matching, to get the most out of the grapes. A wine produced in a region or country where labor and supplies are cheaper the cost per bottle usually goes down and in some instances way down. For example, many Chilean wines are of good quality, but cost on the average $2-3 per bottle less compared to a similar quality wine from California or France. A wine that is in high demand (a.k.a. "Cult Wine"), but in short supplies also demands a premium, which is added to the bottle cost. Italian Wine  The Italian people have enjoyed wine for thousands of years. The heritage goes
back some 4000 years when prehistoric peoples started to press wild grapes that fermented
into wine. The idea was probably to make a simple juice. Lacking the proper storage a
natural process begun and the juice started to ferment into wine.
Remembering back 20-30 years ago, Italian wine was produced in large quantities and provided a cheap thrill. Chianti was it, everyone was drinking it and empty, straw-wrapped bottles were used as candleholders. Only in the past ten or so years have Italian wines risen to a quality that puts it in world competition with wines from other countries. Italy produces and exports more wines than any other country in the world. With approximately 3,200 different wine types it offers the greatest variety, rivaling any wine-producing region of the world. Before we visit some of Italy’s wine regions, let’s first take a look at the confusing bottle labels. If you thought German wine labels are confusing you have seen ‘nothing yet. Some of the frequent complaints, especially by North American consumers are the lack of clearly identifying the winery name. Many times the name appears only in very small print on the bottom of the label, on the back label, or the name is abbreviated using unintelligible letters and abbreviations. Often consumers mistake the place of the wine region with the name of the winery, or the other way around. In other instances the name of the region is mistaken for the type of wine. There are 20 different wine regions in Italy. These regions follow a geographical pattern starting with the North-East region, North-West and Central region, the Central region and the Southern Region, which would include two islands of Sardinia and Sicily. For the purpose of wine-speak, each of these regions is divided into "DOC" and there are approximately 240 of them throughout Italy. This is also the nationwide system that controls wine production methods, including appellations and labels. "DOC" stands for "Denominazione di Origine Controllata". While there are some general nationwide standards, each DOC is managed and controlled by the local region. This means that standards may widely differ between regions. Some areas within the DOC designation enjoy a "superior" status and are labeled "DOCG". There are 9 sub-regions that enjoy this title. The "G" in DOCG stands for Garantita (guarantee). DOCG wines must also carry a paper strip seal of guarantee at the top of the bottle. It’s supposed to indicate the wine is of worldwide reputation and historical relevance and that the wine is guaranteed to come from the region indicated on the label. This designation also raises some debates. There are no significant differences between "DOC" and "DOCG" with the exception of the guarantee. To further complicate and confuse the wine labeling issue for consumers another designation has now been added. "IGT", it is a relatively new classification and stands for "Indicazione Geografica Tipicia" and translates into "Typical Geographic Indication". It supposedly certifies that the wine has the qualities and characteristics indicated by its name. Hmm, another one of those vague indications that really says nothing. Wines that do not have any of the previously named indicators are simply know as "Table Wine", or in Italian "Vino da Tavola". The general point to keep in mind is that the Italian DOC/DOCG system, like the French AC system, regulates not only geographic origin (like American appellations) but also grape varieties, yields, and in some cases production methods. Enough of trying to decipher Italian labels. Let’s go on and look into the Northern Region, which is well known for producing some excellent wines. Northern Italy The Italian wine regions can be divided into four regions: North-East,  North-West, Central and Southern, which include the two islands of Sardinia and
Sicily. In this part we will focus only on the two Northern Regions.
The Northern Regions can be further divided into seven sub-regions. They are from west to east: Valle d’Aosta, Piedmont, Liguria, Lombardi, Trentino-Alto Adige, Veneto and Friuli-Venezia Guilia on the East Coast. Valie d’Aosta This is probably the least known region because it produces the least amount of wines. It is not easy to purchase in the U.S. because very little is exported from this area. Grapes grown in this area are primarily local varieties to make red and white wine, but include such types as Barbera, Gamay, Moscato, Müller-Thurgau and Syrah. Piedmont This area has been famous for winemaking for thousands of years and ranks seventh in national production. First introduced here by the ancient Greeks who started to produce the first "quality" (a term loosely used in this context) in this area. Piedmont ranks among Italy’s most important wine region. If you still have problems associating with Piedmont think of Asti Spumante. That’s it, this fine bubbly champagne is produced in this region. All other bubblies may not be labeled "Spumante" and, in fact, some producers in the U.S. where directed no to use the name on their label. The region produces pretty much an equal amount of reds and whites. Barbera and Barberesco are the most popular reds and Dolcetto takes third place. Liguria Located next to the sun-drenched Mediterranean Sea, this area is better known for their seafood and export of spices than fine wine. The rugged terrain of this seaside region makes growing grapes a challenge; vineyards are scattered and limited. Still some of the wines, even if hard to get, are well worth the search. Grapes grown produce mostly hardy, but flavorful whites. The two standing out are Vermentino and Pigato, producing attractive, full-bodied dry wines with floral and peach characteristics. Lombardy Not noted as making a major impact on the Italian wine market, this area does produce some fine wines. A wide variety of grapes are grown here, including Muller-Thurgau, Riesling, Chardonnay, Pinot Bianco, Pinot Grigio, Trebbiano, Merlot, Barbera, Nebbiolo, Cabernet Sauvignon and Sangiovese. Trentino-Alto Adige
Veneto Known throughout the world with their famous gondolas is the city of Venice. This region supplies what probably is the most widely known wine, Soave. Over 50 million liters are produced annually and exported. Soave has a tendency to be dry, but yet sweet due to its sparkling nature. Equally famed are Valpolicella and Bardolino produced in two different growing areas of Veneto and produced in slightly different ways, therefore the difference in name. Both are blended from basically the same grapes Corvina, Rondinella and Molinara and should be consumed young when they are hearty and fruitful. In addition to the grapes listed, Valpolicella also contains Negrara grapes. The general rule is Bardolino for a light, chilled quaff (like a rose), Valpolicella for a light/medium red, and Valpolicella Ripasso/Amarone for more robust styles and Valpolicella Recioto for a robust but slightly sweet style. Friuli-Venezia Guilia Bordered by Austria, Slovenia, the Adriatic Sea, this region of Italy is best known by it’s capital Triest. It produces small amounts of white wines, such as Chardonnay, Pinot Bianco, Pinot Grigio, Sauvignon and the Tocai of Friuli. Red wines include Refosco dal Peduncolo Rosso, Cabernet and Merlot. Refosco dal Peduncolo Rosso is a violet red in color wine with aromas of blackberry and touch of underwood. It is a full-bodied wine, warm and a touch bitter on the end.Summary Italians have been known to make wines for thousands of years. Today they are world contenders not only in the amount of wine produced, but their high qualities as well. The vast number of varieties provides consumers are wide range of different flavors and types. From the well-known Chianti to the not so known Refosco dal Peduncolo Rosso, Italy has something for everyone. |
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All this assumes that
the process takes place at winemaker’s facility and no outside help is required.
Smaller wineries may have to lease additional equipment to harvest or crush the grapes.
This could add another $300-350 per acre to the final cost of a bottle of wine.
Although located at the bottom of the Alps the area enjoys
surprisingly low winter temperatures, but with a shorter growing season. Both, red and
white grapes are grown here and the climate and terroir is ideal for producing
well-balanced and flavorful wines. Varieties include Pinot Bianco, Pinot Grigio, Traminer,
Muscato, Chardonnay, Riesling, Sauvignon Blanc, Merlot and Cabernet Sauvignon.