How can commercial wine cost under $3 a bottle?

[crabjoe]

I don't get it. I was at Total Wine yesterday and noticed they had all kinds of wine for under $3 a bottle. These weren't specials or sale items. They were their everyday price.

How is it possible? Are these loss leaders for the store or is everyone ... from the grape growers to the retailer ... at minimum, breaking even?

 

[1d10t]

I just bought 6 gallons of juice for $52. Divide by 32 bottles that I will get from these buckets equals $1.63 per bottle for the juice. Of course there are other expenses but add a little water and take bulk purchase power into account. You can also buy the grapes/juice everyone else passes on. Cost goes down further. Then if the buyer's main concern is alcohol content think of the other ways you can cheapen the product and not lose any sales.

 

[user 36973]

noticed they had all kinds of wine for under $3 a bottle

And keep in mind that the liquor store and distributor have marked it up by around a total of 50% from the wholesale cost.

Whatever margins that are there for the winery must be quite slim. Must be making it up by extreme volume.

 

[jburtner]

The original story of two buck chuck.
https://www.businessinsider.com/tra...-company-in-its-winery-in-ceres-california-10

Short cliff notes story: Chuck’s winery went bankrupt and an investor purchased the assets (plus assets of other wineries). Investor sold the wines at a huge discount to trader joes because their investment was minimal and recoup was the intent. The wine was actually more valuable and this was around the time of 2002 recession when there was a surplus if wine and a deficit if buyers so folks bought it like hot cakes because it was good and cheap - great value. Even though the trader joes wines were from a number of wineries the name “Two Buck Chuck” stuck. Poor Chuck lost it all and his name became synonymous with quality wine sold cheap.

Moving a billion bottles makes this work and it apparently worked well before a billion.

Buying a bankrupt business at a discount means a certain amount of product COGS goes way down thus allowing discounts to customers and making up profits with huge volume.

Buy some and try some.

Cheers!
Johann

 

[Rusty Nesmith]

We used to go to a local winery in California in late 80’s early 90’s and they would fill your bottles and cork them for $1.75 a bottle. It was very good wine. They only did it one month out of the year.

 

[bshef]

I don't remember the numbers but a French winemaker whose family vineyards sell to a French co-op, said the co-op was selling bulk wine at ridiculously low prices. Under a Euro or dollar a gallon, I recall. Of course they are selling millions of gallons. Like anything, mass quantity reduces cost. Also mechanization brings down cost.

 

[Scooter68]

Several times over my life I've made something like a leather pouch for a phone, Carved wooden spoons, and of course now wine. Folks see it or tasted it and say "Wow, you ought to be selling that. Problem is for "Hand crafted" things from leather slippers to wine, the time and investment for us is much greater and to sell for a 'reasonable profit' for an individual is just about impossible to do over and over again.
Mass production with machines in the process where-ever possible makes that "cheap" wine available and still be reasonably good.

If you've ever been to Old Williamsburg VA and visited those shops where they demonstrate hand-made musical instruments or furniture... someone always asks - Do you sell these and what do they cost? The answer - "If you have to ask, you can't afford it." They do everything on commission - someone with money to burn wants a hand made item and they don't care what it costs. We as Hobbiest or small business wine makers may have limited budgets but we are much closer to those folks commissioning a piece of furniture or musical instrument than we are to the person going into Ikea to buy a desk.

 

[ibglowin]

They only say it cost $3 a bottle. No claims about it actually being drinkable or enjoyable in any way.

 

[crabjoe]

They only say it cost $3 a bottle. No claims about it actually being drinkable or enjoyable in any way.

So far, the SP that I just made isn't mellow enough to drink.. I've got sauvignon blanc that's cleared and just aging (5 weeks old now), and it really has a sharp alcohol taste too. I have to think the $3 stuff is better than what I currently have.

I wish I knew how I could mellow out the stuff I've got... I'm going to let it sit for another month then see how it is.. I hope I don't have to wait a year for my stuff to taste even half decent.

 

[Scooter68]

That " P " word is hard to bear at first. Especially if you've done beer and you are used to drinking it right away. (patience)

 

[crabjoe]

That " P " word is hard to bear at first. Especially if you've done beer and you are used to drinking it right away. (patience)

Maybe that's it! I started my wines 1st, by like 2 weeks. The beer was done and kegged in like 2 weeks.

 

[ibglowin]

3P's of Winemaking!

 

[crabjoe]

But I thought Skeeter was suppose to be a no wait wine?

 

[Johnd]

3P's of Winemaking!

I thought it was the 9 P’s...........

Proper Prior Planning, Plus Patience, Prevents Piss Poor Performance

 

[jpwatkins9]

As they say, “Time is your friend”. That is especially true in making wine. Wait at least 6 weeks after bottling for the first taste test. I let my stuff age for a year (hard to do) before I really think it is ready. Last batch was bulk aged for a year and just bottled. It was still a young wine when bottled. Now to see what it is like after a year in the bottle.

 

[jburtner]

I have some commercial wines in my cellar that really come into their own after resting for a year compared to when I first test them after a month or so rest. My first red kit wines (Zin and Pinot Noir) are finally drinkable after 3+ years and I've just got a couple bottles of each left. I'm going to save those for a while but no more red kits for me unless I plan on sitting on them for a while.

Cheers!
-johann

 

[Scooter68]

But I thought Skeeter was suppose to be a no wait wine?

ALL wine is going to have an "edge"/Bite to it when new. A lot of that is CO2 but not all of it. Time rounds off those edges, allows degassing naturally and allows other element of the wine to mature. Skeeter is still going to have that CO2 and some of the other properties of a new wine.

Remember Drinkable does not equal enjoyable. You might use that L O N G waiting time to try some different commercial wines to see if you would like to do those yourself. Get an idea about the characteristics of those wines. And as others will probably mention - keep making more wine so that you don't have time to worry about those first wines being ready to enjoy.

 

[sour_grapes]

I thought it was the 9 P’s...........

Proper Prior Planning, Plus Patience, Prevents Piss Poor Performance

Whenever I hear this maxim, I always want to ask if there is a type of planning that is NOT prior?

 

[Johnd]

Whenever I hear this maxim, I always want to ask if there is a type of planning that is NOT prior?

LOL, we’ve been down this road before! So you can rest easier, think about the varying degrees of “prior”..... One second before is prior, so’s a day, so is a week. Proper defines prior, so it’s the proper amount of prior planning. Planning your fall grape delivery a day ahead of time probably means you’ll be missing some needed items, that’s not proper prior planning. You buying this line of thinking? It’s really all I got......

 

[NorCal]

What is nice about the wine industry is that (at least in CA), wineries need to report the grapes they purchase, the brix, the cost, etc, so it becomes public info. I looked at District 13 (central valley in CA) for last year, where most the low cost wine would come from.


As you can see, they are paying on average $400 per ton. Assuming they are getting 1 gallon out of every eleven pounds of grapes, would put their fruit cost at $.44 per bottle. I'd bet they are paying less than $.25 per bottle and less than $.25 for the cork, label and capsule. If they have COGS at $1 per bottle, labor, overhead and sell it for $2 and the grocery sells it for $3, I could see how its plausible, but probably a low margin, high volume game for everyone.