The Value of Wine

What influences the price of wine?

Anyone who has been to a wine shop will know that the price of wines varies hugely. You can pick up a variety of wines priced at £5, and in some places wines sell for thousands of pounds (probably not your local corner shop). Considering all these bottles are the same size, contain the same amount of fermented grape juice, what is it the means the price can vary so greatly?

There are actually several factors that affect the price of wine:

  • The cost of the land
  • The quality of the grapes
  • Labour costs
  • Winery equipment
  • Oak
  • Storage
  • Transport
  • Marketing
  • The reputation of the wine

So to put it into context, your £5 bottle of wine is mostly from an area where land is not at a premium, grown on grapes that can produce high quantities of grapes that are picked by machine, not sorted for quality, vinified in large stainless steel tanks using inoculated yeast strains then transported in bulk to the country of sale where they will bottled and distributed.

Whereas your £20 bottle of wine will be from an area with an established reputation for premium wines, the fruit will be from a vine that produces less grapes and sorted by hand once received at the winery to make sure only the best fruit gets in. Vinification may use stainless steel or oak vessels, and may use indigenous yeast as well as other methods (e.g. skin contact, pre-fermentation maceration) to add more flavour and texture. The wines may then undergo a period of aging in oak barrels or other vessels to further add complexity. The wine will be bottled at the winery.

So what does that mean for the actual value of the wine? How much do you get for your money in a £20 bottle vs a £5 bottle? Well there are many estimates, but broadly speaking, in a £5 bottle of wine less than 40p is the value of the wine. By the time you get to £20 it goes up to approximately £7 per bottle. So by spending 4 times more, the value of wine you get is about 17 times greater! Now I’m not suggesting you spend that much on every bottle of wine. It has been suggested that £10 is the sweet spot for value, and really anything between £6 and £10 is going to be pretty decent. Wine distributer Bibendum have put together a handy diagram to illustrate this:

 

However, the price of wine doesn’t necessarily relate to the enjoyment. Several studies have been done into how much we enjoy wine related to the price, and turns out the more important factor is how much we think the wine costs. So, when a group of people were given a series of wines to taste blind, and were told only the price of the wine, the one they thought was the best was the most expensive, and the one they thought was the worst was the cheapest. What they didn’t realise was that all the wines were the same! It was only the price they were told the wine was that had changed. In another study it was found that people not only thought the wine was better but enjoyed it more. Neurological scans revealed that people experienced more pleasure tasting a wine they were told was expensive, regardless of the quality of the wine.

So in conclusion, the next time you are buying wine, around £10 a bottle will get you good value, but you will enjoy it more if you believe it is more expensive! No-one ever said this wine stuff was simple… but the fun is in exploring!

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