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Home | Wine Tasting 101 | Is a $100 bottle of wine really wort . . .

Is a $100 bottle of wine really worth it?

Brian Gurnham Chief Cork Officer

Surrounded by dozens of wines in the climate controlled lock box at the wine store where I sometimes work I often get the question, “Is a $100 bottle of wine really worth it?”  Mind you that lock box contains wines well in excess of $100, including a 2000 Chateau Lafite Rothschild Pauillac rated a perfect 100 by the Wine Spectator and pricing in at a mere $2,999, or roughly $60 per sip!  And this rare bottle only garners #39 on Wine-Searcher's list of the 50 most expensive wines in the world.  So back to the question, “Is it worth paying $100 for a bottle of wine?”

Well in order to answer the question we have to do a little analysis.  There are many elements that drive the price of a wine.  Let's begin by looking at the cost (not the price) of wine.

The Cost of Wine

Really expensive grapes, and I mean really expensive, sell for about $6,000 per ton.  Using only the best juice from these grapes a winemaker can produce roughly 600 bottles of wine, so the grape cost is $10.00 per bottle.  Next we have to age the wine in oak.  The best oak barrels (at least the most expensive) hail from France and fetch prices as much as $1,100.  American Oak can be had for $450 a barrel, and Canadian White Oak from $850 but let's assume we are striving for the most expensive wine possible, so the 60 gallon capacity French Oak barrels adds another $3.67 per bottle.  The finished product will need a bottle, a label, and some form of enclosure (cork, foil wrapper) which combined adds another $2.90 for a grand total of $16.57.

These are the variable costs of producing the wine and obviously the winemaker must amortize his investment in the winery, - its machinery (press, de-stemmers, tanks, vehicles, interest on loans, etc.).  This figure varies widely but to keep things simple, let's double the cost of the wine to cover these items - $33.  Last but not least, the winery wants to make a profit so add another 40% and the wine is ready to leave the winery at a cost of $46, still a far cry from $100 per bottle for a premium wine.

As anyone in business can tell you, it's not who has the best product; it's who does the best job selling.  Enter the distributor and retailer who will mark up the cost of the wine 33% and 50% respectively so our wine now reaches the retail shelf for about $90.  Wait, I thought we were trying to understand that $100 price tag and those of wines that sell for far more?

The Laws of Supply and Demand

Here is where the magic of supply and demand enters the equation.  Limited supply and excessive demand drives up price and the vast majority of uber expensive wines are produced in very limited quantities.  Domaine Romanee Conti (DRC) Montrachet (Chardonnay) with an average price over $5,000 is made from a vineyard of less than 2 acres yielding total production of less than 300 cases.  Travel back to the U.S. and the iconic Screaming Eagle Cabernet is produced in total quantities that range from 400 -600 cases.  If you visit their web site you will not find things like "buy online" or even "our wine" or "our history", instead, you find a link to join the "waiting list" even though "signing up . . . does not offer access to purchase the wine at this time".  Limited production of a wine alone is only half the equation, it must be coupled with an excess of demand.  Here is where ratings, history, prestige, winemaker, and quality of the wine come into play.  Once a wine has a following the word spreads quickly, and demand exceeds available supply and the price is off to the races.

So Answer the Question

Don't confuse the explanation of these lofty mark-ups and prices as meaning that the wine is nothing special.  On the contrary, the vast majority of wines that garner high ratings and cult status command these positions from years of producing extraordinary wines.

In the interest of full disclosure, my wine tasting experience with $100+ bottles of wine is represented in fewer than two dozen wines.  It does however include a 2004 Bremer Austintatious (red blend), a 1997 Opus One Cabernet Sauvignon, and a 2001 Clos de la Roche Grand Cru (Pinot Noir) all of which were amazing wines.  There is a difference; these wines have intensity of aromas, depth and complexity of flavors, layering - each sip being different than the one before, and an ability to age that is not present in less expensive wines.  Personally I love the occasional glass of a high end wine it helps to calibrate my palate.  If you buy wine within a limited price range pretty soon you are making choices based on subtle differences between wines.  The occasional splurge (preferably by a very good friend) helps remind me of what is possible, of what the best producers in the world have to offer, and resets my personal ratings criteria.

Which brings us full circle to the question we began with "Is a $100 bottle of wine worth the price".  In short, the answer has to be yes because if it wasn't, it would not sell.  Whatever the reasons that drive up the prices, there are more than enough wine connoisseurs, wine investors or status seekers willing and able to pay these lofty prices.  As to whether or not the wine is worth that much to you a different question.  I do however highly recommend that at least once a year you splurge on yourself, do a little research and splurge on a $100 bottle you might be surprised.

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