In a previous article (Making Ultra-Premium Value Wine), I discussed the category of Ultra-Premium Wines. These wines are made using the best grapes and winemaking techniques, and typically cost $100 per bottle and up.
I also defined a category called Ultra-Premium Value Wines. These are wines made to the same exacting standards as other Ultra-Premium wines, but that are priced at less than $100 per bottle.
Since production costs for Ultra-Premium wine are quite high, this leads to the obvious question: how can producers of Ultra-Premium Value wine make money?
In that article, I promised that I would return to this topic. This is the first of several follow-on articles in which I will talk about various aspects of making Ultra-Premium Value wine. In this article, we're going to talk about the grapes.
There is no secret to growing Ultra-Premium grapes. Although individual growers may have different approaches to the details, the general outline of what is required is openly available.
What, then, makes the difference?
High-priced Ultra-Premium grapes tend to be grown in vineyards that have the following characteristics:
- Great location. There's no doubt that some vineyard locations are better than others. Great grapes tend to come from vineyards with the perfect soil and micro-climate.
- Extreme farming. If money is no object, you can do things in the vineyard that would ordinarily be considered too costly or labor-intensive.
Law of Diminishing Returns
The problem with this approach revolves around the question of value.
Some vineyard locations are truly exceptional. But there are a lot of really good vineyards. How much better are the grapes grown in the exceptional vineyard locations?
We can ask the same question about the extreme farming methods. Ultra-premium grape growers can have their crews make many passes through the vineyard to adjust the canopy, drop under-ripe fruit and pick clusters at peak ripeness. How much better does that make the final product than grapes grown with less extreme but still exceptional farming?
Does the improvement in the wine justify a price-per-bottle premium of hundreds of dollars? Producers of Ultra-Premium Value wine don't think so.
Many Ultra-Premium wines are made from grapes grown in vineyards owned or controlled by the producing winery. These wineries can put Estate Grown on their labels.
Are grapes grown in estate vineyards better? Not necessarily.
Owning your own vineyards certainly makes it easier to practice extreme farming. No pesky grower worrying about losing money because they're spending so much on all of the extreme practices.
But, in fact, there are a number of highly-regarded Ultra-Premium wines that are not made from estate grapes. For example, almost all wines made with grapes purchased from the famous To-Kalon Vineyard fall into the Ultra-Premium category.
The problem with estate vineyards is that they are very expensive. The average price for an acre of Napa Valley vineyard is approximately $180,000. Really good vineyard property can be as much as $300,000 per acre.
And that assumes that you can find someone who is willing to just sell you a vineyard. It's more likely that the owner will offer the property as a "Wine Country estate property", at a much higher price.
Unless you had the foresight to buy your vineyard a long time ago (vineyard property was $5,000 per acre in the 1970's), you're going to pay a tidy sum for just the land. If the vineyard needs to be replanted, the costs just go up from there.
What does this have to do with our subject? The fact is that the cost of the vineyard property iwill need to be amortized into the price of the product.
Lessons For Ultra-Premium Value Wine
What lessons can someone setting out to produce Ultra-Premium Value wine learn from this:
- Buy grapes. There are a lot of really good vineyards selling grapes.
- Buy from a good grower. Good growers know their craft and keep up with developments in viticulture. Furthermore, they will often be willing to adjust how they farm the grapes as long as the buyers requests are sensible (i.e. non-extreme).
- Get a long-term contract. To make an Ultra-Premium wine, you need to have a consistent grape source.
Until Next Time
That wraps up our discussion of the first step in making Ultra-Premium wine: getting great grapes.
Was this discussion useful? Do you agree (or disagree)? Comment and let me know.