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.