Some Wine Math You Should Know

Fun stuff to think about:

One standard wine barrel = 60 gallons

60 gallons = 25 cases

25 cases = 300 bottles

If that barrel costs $1000 then each bottle costs $3.33 more just to pay for that barrel (assuming that a winery is trying to recoup the costs in one vintage, which most do not … most will spread the costs of the barrel over several vintages). That $3.33 turns into $6.53 after a wholesaler’s markup and a retailer’s markup.

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One ton of grapes = two barrels of wine.

At $1000 a ton that means $1.67 per bottle cost for the grapes alone.

At $5000 a ton that means $8.33 per bottle cost for the grapes alone.

If buying the more expensive grapes and using new barrels you’re looking at $11.66 per bottle cost just for the grapes and the aging vessel. You haven’t yet paid for the land, the labor, the equipment, the cost of carrying inventory, the marketing, the sales staff, the insurance, or yourself as a winery owner. And that $11.66 raw cost just for grapes and a barrel? Turns into $22.85 when the multiplication effect of markup goes through the wholesalers and the retailers.

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The wine business is a tough business. Looking at the wine math in this way helps put you in awe of affordable and good wine. It shouldn’t be taken for granted.

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