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What Makes A Bottle of Wine Valuable?

Photo source: Image by KamranAydinov on Freepik

Did you know that a single bottle of wine could be sold at a whopping price of $100,000 to $500,000? Paying such a high price for a bottle of wine seems unthinkable for many of us. However, certain bottles of wine are indeed this valuable. So why is wine valued so highly? Here at Zeus Trading we aim to keep you abreast of the information required to be a savvy wine investor. Here are three main reasons that make wine valuable!

1. Scarcity

The scarcity of wine is what makes wine valuable. Wines are a popular choice of drink among people during meals and social events. Over time, as more people consume fine wines, they become less available. Also, depending on the producer or a certain vintage, there may only be a small production of certain wines. For example, the 2012 DRC Romanee Conti produced 350 cases and sold for $20,000-$30,000 per bottle. In contrast, the 2012 Lafite Rothschild produced 15,000 to 20,000 cases per year and sells for $650 per bottle. Thus, these factors affect the scarcity of wine, making the price of wine increase as its supply decreases.

2. Vintage

To understand what is vintage, we have to look at what is used to make wines. Wine grapes are used to make wines instead of table grapes. These grapes are different from table grapes as they are smaller, sweeter, and have lots of seeds. Most wines usually originate from a single species of vine that originated in the Caucasus called Vitis vinifera. There are thousands of different varieties within the Vitis vinifera species. The commonly known white wine varieties for this species are Chardonnay, Gewurztraminer, and Sauvignon Blanc whereas the commonly known red wine varieties of this species are Cabernet Franc, Cabernet Sauvignon, and Merlot.

Photo source: Wine Folly

So what is vintage? The origin of the term vintage comes from the fact that wine grapes take an entire season to ripen, and thus, wine is produced just once a year. Vint stands for “Winemaking” and Age stands for the year it was made.

Have you ever seen a vintage year listed on the label of a wine bottle? Yes, that’s the year the grapes were picked and made into wine! But how does vintage affect how valuable the wine is?

A typical harvest season in the northern hemisphere (Europe, US) is from August to September while the harvest season in the southern hemisphere (Argentina, Australia) is from February to April. Similar to other agricultural products, the weather conditions affect the quality of the harvest. Grapes can be extremely sensitive and complex, with small fluctuations in weather conditions making or breaking a vintage. Finding the perfect balance is difficult to achieve and can be drastic from year to year. Additionally, the location of the vineyard matters as well. Contrary to popular belief that fertile soil brings a better harvest, high-quality wine grapes tend to grow on a hill with low-nutrient soils instead of in fertile soils on flat lands closer to a river.

For example, in Napa during the 2010 vintage, the price of decent Merlot per ton was about $1,300 and the price of Cabernet Sauvignon was much closer to $4,000.

As such, the wine’s vintage plays an important role in determining whether the wine is of good quality or not as the vintage tells us whether the wine is made from good quality or lower quality wine grapes.

For example, 1980 was a less than stellar vintage in Bordeaux with very wet conditions, and the wine is comparatively worth little today. However, 1982 which was considered to be the vintage of the century with wines lasting another 50 years, commanded high prices because of ideal weather.

3. Age

Did you know that time can affect how valuable a bottle of wine is? It changes the taste of the fruit flavors in a wine and also reduces the acidity and tannin in a wine. A well-aged wine will have fruit notes that lean more towards dried fruits and stewed fruit. As the acidity and tannin in the wine are reduced, the wine becomes rounder and smoother. Thus, bottle aging plays an important role in balancing the body, aroma, and flavour of the wine.

Some examples of wines that taste better as they age include Reserva Rioja, Barbaresco, Petrus, and Chateau Duhart-Milon.

Even though we now know that the longer the wine ages in oak and bottle, the more expensive it will be, this does not apply to cheap wines. Thus, cheap wines are best consumed when they are fresh.

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