Triple-Digit Price Tags for Wine?
Triple-Digit Price Tags for Wine?
Wines justify their cost by their quality, demonstrating complexity, possessing age- worthy characteristics and having consistent records. Winemakers and grape growers manage topend wines with careful attention to details at each step of the winemaking process. A great wine starts with great grapes. Intervention must be strategically timed — knowing when to do what and when to do nothing is important for creating an excellent bottle.
When wines leave the gate at the winery, the selling price to distributors is generally 50 percent less than what consumers find on store shelves. The distributor and retailer add onto the sticker price shown in the market. A $100 bottle is sold to a distributor for approximately $50. The cost to make that wine may have been as low as $25. One consideration in cost profile is taxes that are imposed on growers, winemakers, distributors and retailers prior to sale. All the players must be paid when the consumer plunks down money for that bottle.
For the most part, wines that cost more will reflect more quality. However, at every price point some wines may be worth more than the price tag and some may not warrant their sticker cost. Topend wine producers may determine price based on the fact that the market will pay the toll, so why not charge it? Another factor is that if a wine is priced with a low price tag it may not be perceived as a creditable or worthy wine. An influence on the cost of the bottle is the image or status of a certain wine. Do not forget the cost of marketing that image or the slick, fancy tasting rooms that are supported by wine sales. Scarcity can influence pricing as well.
Past performances of a winemaker, vineyards and the winery is one barometer leading people to make wise wine investments. Critics and analysts can also point to good choices when in agreement with the judges. In buying quality wines, be sure to know how the wine was stored — bad storage can lead to faulty wine. When moving up the pricing ladder, consumers are paying for prestige, scarcity and hopefully quality.
