Why Is Napa Wine So Expensive?
Friends of mine ask me many wine related questions. Some of them have no answer — “Why do some corks get tainted and others don’t?” or “What is the best wine with a steak?” While I can often supply some kind of suggestion, these kinds of questions have no one true answer.
Still other wine questions do have one empirical truth. One question I get all the time is about California wine.
“Why is Napa wine so expensive?”
Factors For Napa Valley, California Wine Prices
The truth is there is no one reason for why wine from the Napa Valley region in California tends to cost a distinct amount more than wines from other regions, even some from the same state. There are many reasons why Napa wine costs more than wines sitting right next to them on the shelf.
The main reason is cost to the winemaker. It simply costs more per acre to plant vines in Napa Valley than in, say, San Luis Obispo or Sonoma. Land in Napa Valley ranges from $75,000 to $200,000 per acre, that’s right, per acre. Since almost no winemaker can afford to pay this kind of money in cash, most wineries start out with some serious debt to deal with.
Not only is the land expensive in Napa, but wine cultivation in general is not a cheap concern. To the ridiculously high land bill found above, you can expect to add around $45,000 per acre to begin a vineyard — that is, if you’re using proper wine cultivation methods. Where does this money go? Soil preparation, the purchase of baby vines and rootstock, irrigation and drainage systems, and the construction of trellising for the vines to grow on. There are many more factors, but these are the big boys. Remember also that a vineyard may not begin to produce palatable wine for years — the debt grows and grows as a winemaker prepares to produce amazing wines.
Add in labor costs and the price of starting a vineyard is incredibly high. After all, most vineyards — especially fancy vineyards in Napa — must be hand pruned several times a year. So the high cost of land in Napa is an early handicap and an early price booster for those brave enough to begin a vineyard there.
Another factor in the price of Napa wines is buzz. The average wine consumer may not know much, but it is likely they’ve heard of Napa. Television, films, and pop culture in general have made sure of that. Naturally, a wine that features the name “Napa Valley” prominently on its label (a process which is highly regulated to ensure the wine really does come from Napa) can ask for more money per bottle than one made in, say, West Texas.
As much as simple pop culture buzz can raise the price of a wine, a solid review from a well known wine critic can go even further in hiking up a bottle’s price. Because wines from Napa have been celebrated for so long in America, and because they’re generally pretty damn good, they are often well reviewed. This extra buzz factor can mean the difference between a $12 bottle and a $50 bottle. Wine retailers can inflate the price to whatever level they believe will still be profitable. It is not unusual to find a bottle of wine that cost five dollars to produce selling for well over the fifty dollar mark. Why does this work? We in the wine world have stars in our eyes over certain vintages, and happily shell out an obscene amount of money for our darlings.
So why is Napa wine so expensive? A combination of land cost, vineyard cost, winemaker debt, name recognition, and consumer buzz. If you’re looking for incredible California wines but don’t want to shell out the extra sums of money required for a Napa purchase, consider buying from one of the lesser known (but still opulent) regions: Mendocino County, Central Valley, or Sierra Foothills. You’ll get a quality California wine at a much reduced price.
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This entry was posted on Friday, February 15th, 2013 at 6:18 am and is filed under Wine. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.