If you’ve decided to have friends over for food and wine so you can try a new recipe, you may find yourself browsing the aisles of your local bottle store. You see dozens of wine varieties, and all with varying price tags. Some can be low as $20 – or even lower, and some can cost hundreds of dollars. Where does this price variety come from?
The costs associated with producing wine can be one of the primary factors in pricing an individual bottle of wine. As each manufacturer’s expenses are different, you can expect the unit rate to be different.
The most obvious costs are, of course, the bottles, barrels, and grapes at the very initial manufacturing stages. The manufacturer then factors in the labour costs to make that wine and utilities associated with its production.
If you have a craving for vintage wine, the production process can often be quite complex and labour-intensive. The labour element of this wine type can definitely impact the consumer price tag.
Then there’s marketing, sales, and administration costs. If a manufacturer has invested heavily in promotion, those costs are ultimately passed on to the consumer. Most manufacturers don’t sell directly to the consumer, so the markup from distributors, wholesalers, and retailers also enter the equation.
Mother Nature also often throws her two cents into the equation. Supply and demand after a challenging growing season can impact the cost of wine.