This episode of White wine 101 is brought to you by Barefoot White wine– still America’s most liked red wine brand name. Barefoot thinks exploring red wine needs to be fun. They make over 40 award-winning gleaming and still red wines, so it’s simple to discover what you like. Rosé or Pink Moscato? Pinot Grigio or Pinot Noir? Bubbly or still? (You see where I’m going with this.) To take a look at Barefoot and other wines we speak about on Red wine 101, follow the link in the episode description to TheBarrelRoom.com.
When it concerns wine, is rate in fact an indicator of quality? To much better comprehend the intricacy of that concern, VinePair’s tastings director Keith Beavers dives into the different aspects that can affect a bottle’s price, such as where it’s made, labor expenses, the credibility of a winery or grape, and agricultural supply and demand. Tune in to learn more.
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Keith Beavers: My name is Keith Beavers, and I guess every year I believe, possibly this will be the year that science lastly figures out yawns. I yawn, you yawn. How does that work?
What’s going on, red wine enthusiasts? Invite to VinePair’s “Red wine 101” podcast. How are you doing? So what is this thing about the rate of a red wine and the quality of a white wine, and the relationship in between the 2 things? It’s a continuous scenario with consumers. We need to speak about it.
So I guess this is a huge one, right? There’s a wine shop; you figured that out. There’s a white wine list; you figured that out. Easy, you can pick a wine from a list. If you listen to “Wine 101,” you’re great. However then you’re like, wait a 2nd, what is it about the cost of these red wines? What is it about quality-to- rate ratios and all this stuff? What is it about a bottle of wine that brings this price? Or, what is it about a bottle of white wine that’s not as expensive as that, and why? Oh my gosh, it’s all type of insane. You know what, red wine lovers? It is crazy.
The rates of red wine is quite nuts. I’m not an economist. Mathematics is definitely the Darth Vader to my Luke Skywalker, or the Sarlacc Pit to my Boba Fett, if you’re nasty. I’m not going to be crushing any numbers here on this episode. But what I am going to do rather is discuss the factors that enter into pricing a red wine, and then we’ll discuss grapes and vineyards and how costs fluctuate. There are so many different elements to this. It’s a bit dizzying, however let’s focus a bit and simplify so we can digest it. Really, this is one of the most regular questions I have received over my career in red wine. Especially due to the fact that I was in the white wine hospitality world and the wine retail world. Jedi white wine master Jancis Robinson puts it quite well in the “Oxford White wine Companion” stating that “customers want to know the level to which market prices show quality.”.
So basically, does the rate of a white wine show the quality of the wine inside the bottle? The response is, yes and no. How about that for an answer? White wine is complicated. It always will be. It always has actually been. For us on the American market, white wine originates from all over the world. Every country and every region has its own economy. That is a huge part of what enters into pricing a bottle of red wine. There are other outlying aspects, but if you consider a restaurant and a chef and a kitchen, that chef needs to develop a meal. Every piece of every ingredient that goes into that meal has an expense. The way it’s expected to occur is, the cost of that dish is the amount of all the parts that make up that meal, and after that some other charges go into it like lease and labor that help cost out the dish. This is extremely similar to what takes place in white wine. When you’re taking a look at a bottle of white wine, whether it’s a $15 bottle of white wine or a $115 bottle of red wine, there is a long list of factors that enter into rates that bottle. This is really excessive. Bear with me, it’s crazy.
The first thing that needs to be factored in is the price of the grapes. As you can envision, this is a big world and there’s constantly different economies in various locations with different track records. Different ranges are more labor-intensive than other varieties, and it also depends on where those ranges are. If you’re doing Cabernet Sauvignon in Napa, they’re going to be expensive. If you’re doing Pinot Noir basically anywhere, they’re going to be expensive. Let’s state you’re doing Cabernet Sauvignon in a location like Uruguay, which hasn’t really made it onto the American market entirely, then maybe that Cabernet Sauvignon will not be as pricey.
But then you go to the other aspect, which is labor costs, which also depends on where the wine is being made. Labor costs in certain areas are much lower than in other locations. For example, there are countries in economies like Chile, Argentina, and South Africa that have low production expenses. This will help bring the cost of the red wine down, especially when it’s translated into other currencies for importers to import into their countries, like the United States. Of course, you have locations like Champagne. Although the land is costly, the labor is extensive also, which contributes to the price. A great deal of things add to the rate of Champagne, however it is an example of how labor-intensive a location can be, and those costs are higher compared to other places. So the price of grapes, the price of labor, however, you have the rate of the actual vineyard itself. Is it the land that’s owned by the winery? And if it’s not, these are contracted vineyards that they buy grapes from. Just how much is that contract? That also elements into the bottle price. However let’s state the winery does own the vineyard and does own the winery. That winery, I can guarantee you, has financial obligation. So that also factors in the rate of a red wine. Depending upon that, whether you’re contracting from a vineyard or have a vineyard on your home, there is going to be a transport cost of getting the grapes from the vineyard to the winery. After it arrives in the winery, there’s more of that production cost that consider. But then likewise there’s the label. How did the label get developed? Who designed it? How much did that cost? We got ta get that label onto these bottles. Oh yeah, the bottles, we have to purchase the bottle. So there are transportation costs, there are bottling expenses, and there are labeling expenses.
Then, there is the winery itself. Whether it’s contracting for vineyards or having the vineyards or not, they need to have a marketing method to get the white wine out there. Because, my gosh, this is a competitive market. That competitive market is what manufacturers and wine merchants take a look at regularly. So all those factors are involved in a producer pricing out their wine. However also, the wine maker or the manufacturer frequently has a prices policy that they wish to stick to, so they can keep things constant. Now, when that is developed, that wine gets to a wine merchant with that policy, which then has to go and market that out to the remainder of the nation. That red wine merchant has their own expenses that they put on the bottle. And a white wine merchant could have domestic red wine. But if the white wine merchant has European white wine, there is a three-tier system that needs to take place to get to a wine shelf. There are expenses and duties and taxation for all of that also. I believe it may be a bit obvious to us that when a white wine is pricey, it’s due to the fact that it either comes from a place that has a legacy or a track record. Of course, supply and demand are as real in the white wine world as they are anywhere else. Frequently, those white wines are celebrated because the quality of the white wines in that area are quite remarkable. So you’re spending cash on a wine like Champagne or Burgundy or Bordeaux, and you’re basically guaranteed a quality white wine. Whether it’s your preference or not is a whole different story. But the quality is going to exist typically, mostly, and mostly.
Sometimes, when wines are economical, it’s easy to think, “Well, certainly if they’re economical, they don’t have the quality of a Champagne or Bordeaux or Burgundy.” That’s not true. The thing is, we’re talking about how it’s a huge world out there. There are places that make fantastic wine that we do not see on the American market, or haven’t, or just have a little bit of it since of political and financial elements from those areas. Greece, Hungary, Romania, Bulgaria, Slovenia, Croatia, Georgia; these are countries that have been making white wine for a long time. However we do not see these white wines on the American market. Why? Since of, like I stated, political and financial problems. In some cases red wine production is stopped. Often white wine production is stopped briefly. But often wine production is increase, like in communist Russia, where it was not about the wineries, it was about making as much as possible for the people. When communism fell, there was a surplus of grapes. So of course the price of the wine is going to drop at that point. Countries like Bulgaria, Romania, and Hungary, which have amazing red wine, then re-acclimate themselves, and they bring red wine over to our market.
Frequently, after the surplus is over and we begin seeing the more concentrated stuff, even though the price increases in production, they’ll keep the price low to get a grip in our market, which is a huge deal. That’s a huge thing that South Africa did back in the early 2000s. At some point, all of us start to commemorate the white wines from the area. For instance, Georgia is a big one right now. Everybody’s into Georgian white wine, which has been around for millennia. Now we’re lastly able to take pleasure in these white wines. When they first came by, they were not actually that expensive, and they weren’t extremely well understood. But as they’ve gained popularity, the cost has actually increased due to the fact that we’re seeking them out. Supply and demand is taking place. So the quality hasn’t really changed; it’s the cost.
On the other end of the spectrum, a wine, winery, or producer within a trend or something that’s acquiring in popularity, will frequently price high to announce their status right away. There’s no reducing into the white wine. The red wine is pricey the minute it hits the marketplace, and you’re marketed to stating, “You must buy this since it’s remarkable.” For example, the cult Taxis of the ’90s in California. They came out of the gate costly. Now I comprehend that Napa vineyard land is costly, however it wasn’t as pricey then as it is now. These cult Taxis, like Yelling Eagle, came out of the gate expensive. What they were saying was, “This is Napa. This is Cabernet Sauvignon. It defines our region. This is age-worthy things. You need to buy at a high price because as you age it, it improves. Or you can even purchase the white wine and resell down the road at an even greater price.” That’s another method wines are priced. That really factors into the financial investment of white wine, which has a whole other list of requirements for purchasing and pricing wine. The exact wine itself, with the credibility, needs to be attractive. The period, or the time in which the wine was made, likewise needs to have some sort of eminence to it. The rarity of the red wine, if not a great deal of it was made, then where was it made? What’s the provenance of the wine? What’s the actual condition of the bottle that you’re bidding on for investment? What’s the global state of the market? Once you purchase that white wine or a great deal of red wines, you’re going to watch those wines accumulate in worth.
It’s a very complicated thing. This likewise aspects into the cost of white wine. It likewise aspects into the track record of a white wine, so that the wine could be really priced up on the retail market. All of these factors back into grapes and in vineyards.
The truth is, although there are lots of wineries out there with estates that have vineyards on their land and they manage the whole production from growing the vines to making the white wine, the majority of the wine grapes on earth are purchased and sold as fresh grapes that will then be produced separately at a winery that did not grow those grapes. Whether that’s a producer that has vineyards but then agreements for particular varieties, or it’s a commercial winery, or it’s co-ops in Europe, the costs of these grapes vary, increase, and fall like any other fruit crop or any other crop. This is farming. However with that added layer of white wine, which is crazy since you buy grapes, however you really will not know the quality of these grapes up until you make it into the white wine. But, because of the appeal of specific varieties, sometimes the price of grapes can be reinforced throughout an entire market. That gets a bit demanding, since individuals that have adequate cash to buy the grapes get the advantage over individuals that do not have adequate cash to buy the grapes. Which factors into the cost of the white wine.
Mentioning that, the grape itself aspects into the cost as well. In 2004, when “Sideways” came out, Pinot Noir was currently an expensive range. But then that shot up enormously and meteorically after 2004 when the film came out. Napa has been concentrating on Cabernet Sauvignon a minimum of considering that the 1940s. That is an ongoing fashion in this location. It’s not like it’s simply fashion, it really succeeds. But there are other varieties that succeed in this area, like Zinfandel, that will be a little less expensive than Cabernet Sauvignon.
In Europe, I don’t know about other places, however I know that Bordeaux and Champagne both have cost regulatory boards that in fact decide rates as the marketplace fluctuates. All this is not to discuss the real land the vines grow in. Oh, guy! In the most popular locations worldwide that make red wine– Napa, Bordeaux, Burgundy, Champagne, and so on– it’s really, very costly to get land to plant vines and earn a living. However these places– the areas, the vineyards, the origins of these vineyards, the origins of the location, its red wine culture– have a significant impact on the white wine quality. They have actually been showing for a very long time that the quality is possible there, which will attract the marketplace. However quality wine is not always guaranteed. The history of red wine is a pretty big rollercoaster, and some of the most prominent areas of the world that we know now were hit-or-miss in quality back in the day. Chianti is among the most well-known, and we’ll talk about all that in an upcoming episode. It’s the exact same with Burgundy as well, and Champagne, and Bordeaux. But as these locations enhanced, the quality improved. They kept the track record and now they can bring the high prices in vineyards and grapes and white wines.
Here’s the important things: In other places in the world where grapes and vineyards and land are less costly, that by no means states that the quality is lower. There is remarkable quality coming out of places that are not that expensive. That’s fantastic for us because we get to try great wine that’s not too expensive due to the fact that a place is trying to gain a foothold on our market. But also, it can assist the wine makers and the wine area and its credibility in general. Those low expenses permit the wine maker to experiment a bit more. I suggest, Napa didn’t end up being Napa overnight. It was years and years of experimentation, searching for the varieties that worked for Napa. Cabernet Sauvignon came out on top, but it took a long time, and the expenses were rather low in the past. Compared to now? Forget it.
Mentioning land worth, take a look at these stats. In the mid-2000s, it cost about 250,000 euros per hectare– or a little over 3 acres– to purchase vineyard space or a vineyard in the basic Bordeaux appellation. At that same time, some of the residential or commercial properties that were most well known and most desired chose $1.5 to $3 million a hectare. That is in the mid-2000s. Can you imagine what it’s like now? Specifically in Burgundy, where, for a grand cru, you might pay up to 9.5 million euros per hectare. I suggest, these are little plots of land, however wow. However depending upon location in Burgundy, if you were simply a part of the basic Bourgogne AOC, you could get as low as 30,000 euros per hectare. This is insane. Keep in mind that we discuss how marketing is a big deal? Champagne might be the most marketed white wine worldwide. It’s likewise considered a few of the most costly red wine worldwide, but the land caps out at 1.8 million euros per hectare. So it’s less than both Burgundy and Bordeaux, yet the red wine prices are very high. Piedmont, another very well-known red wine area, has to do with 1.2 million euros per hectare.
And obviously, we can’t leave Napa out, which is a little over $130,000 to more than half a million per hectare. So you’re going to invest when getting wines from that area, and the ones you spend a lot on are most likely going to be great quality. It might not be your preference, it may not be your style, and the red wine might not be made in the method you want it to be made. But for individuals that do dig that white wine, that cost is that price, and they’ll pay it.
In locations like Chile, Argentina, South Africa, Australia, and all over the world like Uruguay, just because the land worths are low and even if the grape prices are low, does not mean the quality is low. There are many aspects that go into the cost of a red wine, and your task– well, not your task; you could do whatever you want. But if you’re a wine enthusiast, you go out there and purchase wine, you experience wine. If you’re going to invest a lot of cash on wine, you’re going to check out it a little bit. When you’re buying a TV, you’re not just going to go and state, “Hey, provide me a television that works.” You’re going to check out TVs and you’re to find the one that works for you. If you have a specific choice in red wine and you wish to invest a great deal of cash, you’re going to do your research study.
When it comes to white wines that are your daily white wines, it simply boils down to attempting the red wines. Just because a white wine comes from, let’s say, the Colchagua Valley in Chile and the white wine is $15 or $20 and says it’s high-end Taxi, that does not imply the wine’s not good. It just indicates there are a lot of aspects involved in making that white wine that permits the red wine to be that rate on our market.
OK, so I’m rambling on too much. I didn’t wish to do a great deal of mathematics here, so I wished to give you people a lot of different elements on how this is in fact done so that when you have a bottle of white wine, you know how it got to your table and into your glass. What are you men doing next week?
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And now, for some totally awesome credits. “White wine 101” was produced, taped, and modified by yours genuinely, Keith Beavers, at the VinePair head office in New York City. I wish to provide a huge ol’ shout-out to co-founders Adam Teeter and Josh Malin for producing VinePair. Big shout-out to Danielle Grinberg, the art director of VinePair, for creating the most remarkable logo for this podcast. Also, Darbi Cicci for the theme song. Listen to this. And I wish to thank the entire VinePair personnel for helping me discover something new every day. See you next week.
Ed. note: This episode has been modified for length and clearness.
Source: https://vinepair.com/articles/wine-101-price-correspond-to-quality/