What Makes Collector Wine So Expensive?

There I was, enjoying the cool morning air of Napa Valley with my wife and a few friends that were graciously treating us to such a wonderful experience. Comfortably resting in a soft and welcoming chair nestled alongside the stone pathway of a lush and vibrant garden; wine in hand, I gazed out upon the endless rows of vines, heavy with their lush red fruit.

The vintner softly broke the stillness of the morning air, asking if we were ready to enjoy an estate wine from the vineyard’s world renowned wine library. Our hosts smiled, turned to my wife and me, and told us that we were in for a treat.

Napa Valley Estate Red Wine

Sunset views of a Napa Valley Vineyard.

The vintner returned with an elegant glass decanter, partially filled with a deep ruby colored wine. As she gently poured the silk-like wine in each of our fine crystal glasses, she delicately described what we were about to experience.

“Composed for ageability, harmony, finesse, and longevity, our 2010 Estate Red has a deep ruby color with a hint of violet. The nose expresses a profound purity of fruit with cassis and blackberry notes. On the mouth, the wine is restrained, allowing the fine, ripe tannins to shine. The wine builds in depth and intensity, revealing floral notes, and chocolate tannin with a brooding, roasted almond note. The long finish is harmonized with natural acidity that pilots focus, precision and freshness.”

I followed the lead of our hosts, gently rocking the glass from side-to-side, unlocking the wine’s complex aromas. I then submerged my nose into the glass, and took a deep, satisfying breath; followed by a slow and delightful sip of the ruby goodness.

While the vintner used many complex and descriptive adjectives to describe the wine, I summed it up it much simpler terms. It was incredible!

As I placed my empty glass on the table, I casually opened the vineyard’s wine booklet to learn more about the wine that we had just tasted. I slowly read through the wine’s elaborate description and tasting notes, until my eyes made contact with the following:

$1,350 USD

I must have read that number at least a dozen times, just to make sure my eyes and brain were properly communicating. After careful study, it wasn’t a typo; a single bottle fetched a whopping $1,350!

Three expensive Napa Valley collector wines. (Left) 2015 Screaming Eagle Cabernet Sauvignon sold for $5,500. (Middle) 2014 Scarecrow Cabernet Sauvignon sold for $1,650. (Right) 2013 Harlan Estate sold for $935.

After my shock (and buzz) wore off, my curiosity took over. I immediately embarked on a quest to find out why “collector” wine is so expensive. Here’s what I learned…

3 Primary Traits of Expensive Wine

When it comes to expensive wine, there are many variables at play; such as scarcity, demand, and a vineyard or vintner’s reputation. While those characteristics may change from wine-to-wine, there are three tried-and-true traits that dictate the price of wine: Terroir, Oak, and Time. 

Terroir

We are winegrowers, not winemakers.

That’s a common phrase I heard throughout our time in Napa. Nearly every winemaker we encountered affirmed that great wine is made in the vineyard, not the winery. 

To produce great grapes, winemakers focus on making their vines produce less grapes, resulting in a more intense and flavorful fruit. In short, some of the world’s most expensive wines originate from vineyards located in areas where vines struggle to produce grapes! 

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This key ingredient is referred to as terroir―how a region’s climate, soils, and terrain impact the taste of wine.

Climate: Warmer climates produce grapes with higher sugar levels―more sugar, more alcohol. Cooler climates produce grapes with lower sugar levels―less sugar, less alcohol and more acidity.

Soils: Soil types work with the vine and the climate to facilitate water drainage, nutrient exchanges, the retention/loss of heat, and can also affect the acidity in grapes. While the world’s vineyards boast hundreds of different soil types, most fall under one of these broad categories: Limestone, Loam, Sandy, Alluvial, Clay, Silt, or Volcanic.

Four of the most common vineyard soil types and characteristics.

Terrain: Altitude, flora, and geological features (i.e. mountains and valleys) directly affect how a wine from a specific region tastes.

How Terroir Affects Price

The varietal of grape grown in the vineyard also affects price. For example, according to the 2017 California Grape Crush Report, grape growers in Napa County (District 4) saw the largest increase in average price, which grew 11.5% to reach $5,175 per ton. Napa Cabernet Sauvignon shot up to an average of $7,421 per ton, an increase of 9% over 2016, while Cabernet Franc commanded $7,969, up 10%.

Compare those prices with Napa’s neighboring wine region of Lodi (District 11). Lodi’s reds, such as Cabernet Sauvignon and Merlot, brought commodity prices of $700 and $552. So yes, terroir has a direct impact on price.

Oak

The most sought after wines in the world have one thing in common; they’re all aged in oak. An oak barrel does two things to wine; it adds flavors like vanilla and spice, and it exposes the wine to oxygen.

Since oxygen permeates through the barrels, some of the wine is lost to evaporation. The loss of wine through evaporation, called ‘angle’s share’, helps to further concentrate the wine. In addition, the natural tannins become less intense, giving the wine a smoother texture and finish.

The anatomy of an oak wine barrel.

French Oak

The vast majority of expensive collector wines are aged in French Oak, as it adds complex flavors in a more subtle way than other types of oak. A winemaker can expect to pay a minimum of $850-$3600 a barrel, depending on its source and quality.

Eastern European Oak

A step down from French Oak, is Eastern European Oak. In recent years, it’s become a popular substitute for French Oak due to the strong characteristics it shares with its French cousin, but without the hefty price tag. Eastern European Oak barrels cost a minimum of $560-$700 a barrel, depending on quality.

American Oak

Although some vintners choose to barrel their wines in American White Oak, it’s not a popular barreling option for wine, as it aggressively imparts a lot of flavor during the aging process. A winemaker can expect to pay a minimum of $360-$500 a barrel, depending on its source and quality.

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Fun fact: Most oak trees harvested for the production of wine barrels are at least 60 to 80 years old, though some coopers only use trees 150 to 200 years old. A skilled cooper can make between one and three standard-size barrels (~ 60 gallons) per tree.

Time

All wine does not get better (or more expensive) with age!

First and foremost, the vast majority of wines available for purchase today, should also be enjoyed today. In other words, most wines are not supposed to be aged in a cellar as they will get old and spoil. The old adage of “wine only gets better with age” mostly pertains to red wine, like a Cabernet Sauvignon or a Merlot.

Red wine maturing in French Oak barrels in the cellar of Vondeling Wines in the Paarl Wine Region of South Africa.

Time alters the taste, complexity, texture, and finish of wine. A well-aged wine will boast subtle fruit notes, and will retain lower levels of acidity and tannins, making the wine rounder and smoother. Not only are you going to pay for a smoother, more enjoyable wine, you’re also going to pay for the years of storage and care that went into the aging process.

Newfound Appreciation

There’s a reasonable expectation that if you want something hand crafted by the finest artisan, it will cost you. As I learned in Napa, this also applies to fine wine. At every step of the winemaking process, there’s an artist at work, perfecting their craft as they dance with mother earth. While I certainly respect the craft, I still couldn’t bring myself to buying one of Napa’s finest wines!