(5)2 Buck Chuck : Why is Walla Walla wine so expensive?
One of the most common questions the tasting room girls hear from tasters is some variation of “why is this wine so expensive?” Approximately 75% of the wine consumed in the States costs under $8, while the average price of Walla Walla wines seems to be about $30. What makes our wines more expensive than other labels that you can find at the grocery store or wine shop when it’s just fermented grape juice?
Just to address the common misconception early on, the difference in price has little to do with Columbia Valley and Walla Walla Valley small production and boutique wineries trying to make huge profits off our customers. Though the margin is similar in a $150 Merlot blend, a $50 Cabernet Sauvignon, and a $10 Syrah, large scale wineries (those typically putting out “bargain” wines) have huge savings advantages to smaller wineries on almost every level. Marketing costs, materials, shared facilities for their different brands, personnel and real estate are all less expensive per bottle for a massive conglomerate brand than a small brand. A large operation with many wineries may buy standard 750 ml. bottles by the millions while a small winery is buying a tiny fraction of that. Limited production wineries also have to distribute overhead expenses over a smaller range of products, and often have to pay premium prices on many supplies because they cannot afford (or have need for the amount of) minimum orders. As an example, it is hard to buy just a handful of new French barrels (enough to produce around 1000 cases of wine) at a decent price.
Other factors driving up the margin between an $8 and a $48 of wine? Location of the vineyard and demand of the grapes. Bargain wines often have fruit that is sourced from a variety of vineyards, AVA’s, even different states, allowing winemakers to mix a small percentage of really good grapes (more expensive) with a higher percentage of lower quality grapes (less expensive). Expensive wines will often have labels that indicate either a single vineyard or a single AVA source. In fact, some expensive wines are even clone (like the Helix Clonal Selection Collection) or block specific, meaning they were harvested from a specific section of one vineyard or just one group of grapes of a specific clonal variety within the vineyard.
So what if the grapes come from one or ten vineyards, how does that affect the price? Large wineries making bargain wines do some combination of the following:
– Grow their own grapes on estate land
– Long-term contracts with vineyards to buy their surplus grapes
– Buy grapes from vineyards offering surplus at bulk prices during harvest
– Buy juice post-harvest that over-stocked vineyards have pressed because the grapes went unsold
– Use bulk wine that is already aging in barrels or even bottled that was originally planned for another label and for quality reasons has been determined not suitable for higher-priced labels
In contrast, small production wine-makers are not only buying grapes from single-appellation (such as the Walla Walla Valley AVA)or single-vineyard (like Seven Hills Vineyard or Ash Hollow Vineyard) sources, but are competing with other eager buyers for the same grapes. While bulk grapes can be found in the $800-$2000 per ton, reputable single-vineyard growers can choose to take the highest bid from many winemakers, frequently getting $5000-$10,000 (or more!) per ton for their grapes. It is easy to understand how an $8 bottle can grow to $50 or more when the grapes are as much as 500-1000% the cost of bulk grapes of the same varietal. As for the quality of the vineyard, trained personnel and dependable equipment to maintain high quality standards for the fruit costs money and requires constant vigilance for the vineyard owners.
In the end, there is no question that a large conglomerate winery can make a good $8 wine. Small wineries in the Walla Walla valley, however (whether they source grapes from the Columbia Valley or a smaller AVA like Walla Walla, Red Mountain, etc.), are more likely to make focused, quality wines that express the characteristics of the specific varietal and region, and will be able to consistently reproduce high quality wines of the same varietal from vintage to vintage.