Why is Virginia Wine so Expensive?
Perhaps the most common complaint about Virginia wine is: Why is it so expensive?
To answer that, let’s look at the following facts:
Virginia has 3,400 acres of wine grapes. California has 637,000. Napa Valley alone has 45,000 acres of wine grapes. Sonoma County has 62,000 acres.
The largest wine producer in Virginia generates 65,000 cases a year. The largest in California, E. & J. Gallo, generates 60 million cases a year.
Virginia wine is expensive because of scale and volume. California wineries can sell cheap wine because they can spread the cost of production over more bottles — far more bottles. That includes labor, sprays, equipment, plant material, trellising, infrastructure, salaries, bottles, corks, labels and taxes over a smaller number of bottles.
Most wineries in Virginia are boutique family operations, not corporations. The average size of a vineyard in 2019 was 15 acres. That means everything needs to be hand-picked, which is romantic and European, but increases the labor cost. It makes little economic sense to mechanize a tiny vineyard. A $350,000 grape harvesting machine would only be used a couple of times a year and just for a few hours. Consequently, vineyard operations in Virginia takes about 250 man-hours per acre contrasted with 40-man hours per acre at a mechanized vineyard.
All this means that Virginia wineries need to sell each bottle for at least $25-$30 to break even. That, in turn, determines what kind of consumer they target and what kind of grape varietals they must plant. They have to aim for the high-end market because they cannot afford to target the low end.
What would eventually lower prices? Substantially more acreage in vine-plantings statewide.