The Wine Industry Uncorked!

By the process of osmosis, you’re not instantly an expert because you live in Northern California when it comes to distinguishing the good, bad and the ugly when it comes to wines. Most can’t even tell the difference between a bottle of “Two Buck Chuck”(Charles Shaw Wine Sold at Trader Joes) and “KJ” (Kendall Jackson). While the bottles look alike, they’re different in many ways. This article is intended to give the basic wine consumer a little peek into the world of wine.

MAGNETS

Labels have a lot to do with the success of a bottle of wine. A good picture, graphic and of course a distinguishing or catchy name really impacts the popularity of a vineyard. Could a name like “Opus One” attached with hefty price tag be a bad bottle of wine?

If you’re into Zinfandel wines, you can’t help but to lured to the near naked body on the label of “Sin Zin”.One can’t help but to hope that there’s something in the wine that makes one lose all of the inhibitions. Perhaps best uncorked on a Saturday Night!

The large winemakers have the big bucks to make their way to the shelves of your nearby Safeway, Albertson’s or Raley’s. As we pass by and see the bottles of “KJ” (Kendall Jackson), Robert Mondavi, Clos DuBois marked down to 25% off their typical retail price, we can’t help but to take a gamble that it’s a good wine and if it’s priced right. It’s a $25 bottle of wine marked down to $9.99 and you have a dinner party that evening! We also tend to buy the label that we recognize if it’s priced right at the grocery story.

The major wineries market their products the same way McDonalds’s fast food restaurant chains once did. In my opinion, McDonald’s used the get them hooked while they’re young strategy. No, I’m not saying the wine industry is marketing wine to minors, just the over 21 year olds purchasing wine for the first time. They’re hoping that once you’ve tasted their wine, you’ll be back for more and purchase their more expensive bottles.

Notably there are some of us that gained our knowledge of wines from family, classes, articles, and internet or by speaking with wine experts.

PEELING BACK THE GRAPE

In order to get an understanding of wine, let’s peel back the grape and see what’s inside of making wine. First let’s look at some of the economic factors that go into the cost of a bottle of wine:

Vineyard preparation for growing

Property Tax for the Acreage

Growing Costs

Crop Insurance to protect against insects, weather, crop damage,etc.

Name recognition and demand for product (Supply/Demand)

How much wine is produced and the potential profit from the lot sold

Does the wine have a history of selling or being a hot commodity?

If there’s a distributor involved, what’s their cut?

Barrel (Quality, What’s been done to it, Type of Wood, Age, Used)

How much manpower was utilized when picking the fruit

How long the wine was stored and the climate it was stored in.

The equipment used to harvest and produce the wine

Quality of cork

Quality of bottle

Taxes involved based on alcohol level

Insurance needed if it’s sold at a retail outlet (Wineries are sometimes required to have over a $1M in liability insurance, just in case)

Shipping and delivery costs

Potential costs involving retail displays

Monies used to pay stores to actually put the wine on their shelves.

Advertisement and Marketing Expenses

The list goes on…

Now when you factor in the costs of growing the fruit and storage after it’s been bottled and you’ll realize that you’re getting a heck of a deal when you’re purchasing a bottle of wine for $2!