When it comes to wine, the question is often raised whether a $150 bottle of wine tastes better than a $15 bottle of wine. The answer is quite complicated, because preferences for wine are palate-driven, and truly subjective. There are many factors that contribute to the cost of wine in the bottle, including the variety or varieties of grapes used to make the wine, the region where the grapes are grown, how the grapes are cropped, the age of the grapevines, how the grapes are harvested, how long the wine is aged, and in what medium, and how much demand there is for the wine.
Expensive wines are usually from a small plot like a single vineyard or a small, single region. Wine from a single named vineyard in Napa Valley would command a higher price than one that is labelled a general California wine. Labeling laws generally dictate that the wine in the bottle must come from and be made in the designated region that is listed on the bottle. If grapes from California are purchased and made into wine in Virginia, the wine would be labelled as from the United States.
Wines with higher price tags are more likely to be made from a premium, single variety of grape, though there are many expensive blends that could break the bank, too. Inexpensive wines may have been made using a blend of many different grapes. In addition, vines grown on soil that is highly fertile will produce an abundance of grapes allowing bigger lots of wines to be produced, and this allows for a lesser price tag.
Fine wines are often made from old vines which produce fewer grapes that are said to have a deeper, richer concentration of flavors. If the vines are not older, wineries can cut down the number of the clusters on each vine (called dropping fruit, or green harvesting) in order to get more concentrated flavors in the clusters that remain. This means fewer grapes are harvested, and prices would be higher, as less wine is made.
The grapes for the higher-price-tag wines are more likely to have been hand-harvested, and the labor cost is passed on in the bottle price. Inexpensive wines are usually harvested using mechanized harvesters. These machines go over the rows of vines and shake the grapes and clusters off the vine and collect them into bins. The roughness of these machines tends to impact the flavor profiles of the resulting wine.
Pricier wines tend to spend extended time in French oak barrels. French oak barrels can cost from roughly $1200 to a couple of thousand dollars depending on the forest where the trees are located, and the cooper (barrel maker) who made it. French oak barrels are more expensive than American oak barrels because the wood must be split along the grain in order to be leak proof. Only about 2 barrels can be made from an 80-year-old French oak tree. American oak barrels can be cut as the grain is different, and therefore, the cost is less. Mass produced wines will most likely not spend time in oak barrels. If these wines taste oaked, the oak flavor may have come from the addition of oak additives, whether in staves, liquid, powder, or chip form, in place of barrel.
The longer wine is left in barrel to age, the higher the resulting cost as the barrels cannot be used to store other wines and additional barrels will need to be purchased. The wine cannot yield the winery any income until it is bottled and is available to sell, so any time spent aging—whether in barrel or bottle—has a cost associated with it. Less expensive wines will spend less time being aged, and will be available to sell sooner, rather than later.
Less expensive wines often have some residual sugar in them. The residual sugar gives the wines a richness and body, making them seem like better wines. The residual sugar also helps balance the acidity in the wine, and makes the wines seem more approachable and drinkable.
Other factors in the cost of wine include the cost of the packaging materials, including wine bottles (or other types of packaging), closures (screwcap, artificial cork, amalgamated cork or real cork), foils, and labels. Do not forget to add other local labor costs (tasting room, winemaker, etc.), real estate costs, excise and other taxes, and marketing costs.