Welcome to our new monthly wine column: Wine Time. This monthly journal will be filled with practical knowledge about the world of wine. This month, Brie Roland explains all the hands your bottle passes through from vineyard to shelf.
t’s almost too easy to buy a good bottle of wine in the Twin Cities. I can have a brooding red from Sicily or a citrus-laden Sancerre delivered to my doorstep without ever even talking to a human or putting on pants (sans the moment of delivery, of course).
Such accessibility makes it hard to imagine the complex web of behind-the-scenes relationships, commitments, and risks that enable me to be able to order wine like I order my pizza. Seriously: how do those bottles get all the way from Europe to my front door?
The journey starts with a selection. Importers are always on the lookout for quality wines for their portfolio. Sometimes they scan trade shows like Vinitaly and Vinexpo where thousands of winemakers come to exhibit; other times it’s more organic, like stumbling upon a gem while driving through the French countryside. In any case, the importer makes a connection and decides, “ This one is worth the fuss .”
So begins the chain of custody from vineyard to glass. And if custody implies taking responsibility for what you have, this moment marks a huge shift in the burden of responsibility.
The importer and producer talk pricing, availability, and desired purchase amounts while forging a mutual trust. The importer knows their own market, the quality of the wine, and how it might be received. The producer knows the reputation and demeanor of the importer and hopes that they will be able to get their wine into the glasses of appreciative drinkers. Each side is taking a calculated risk.
At this point, there are a few factors that can set the stage for how much you eventually pay for a bottle. The exchange rate is key—whether a €10 bottle in Paris costs $11 or $12 becomes a huge difference at higher volumes.
Quantity is important, too—the more wine the importer buys, the more likely they are to get a price break on shipping. However, it is not always possible to purchase enough to get a break. The winery might be small, the wines they make might be high-end and allocated (think Burgundy, Barolo, Northern Rhone), or the importer might not be able to take on a larger inventory.
But no matter how much wine is purchased, the use of temperature-controlled shipping is always the single biggest one-time addition to your bottle’s cost, and that comes by way of a…
Specializing in shipping logistics, safe transport of valuable cargo across the ocean, and customs clearance, freight forwarders consolidate all the orders an importer might have in the region. They will send a truck up into the winding hills of Cote Rotie to pick up a small order and join it with other orders the importer might have ready in the region. If the importer cannot fill a 40-foot container, they will pay a premium for what the industry calls Less than Container Load (LCL). Importers can realistically save up to $12,000 by filling a 40-foot container, but this is not always possible.
Once the wine is on a truck en route to port in Europe, it is insured by the freight forwarder all the way through one of the main U.S. ports (usually New Jersey or California), through U.S. customs, and up until it’s signed for at the importer’s warehouse.
Back home, the importer must make sure that each new wine they are bringing into the country has had its label approved by the Alcohol and Tobacco Tax and Trade Bureau (the TTB) before it reaches port in the U.S. The wine will not clear customs if they are unable to produce a COLA (Certificate of Label Approval) to verify the label has already been approved by the TTB. Importers must also pay an excise tax on the products they bring in. For wine, this can range from $1.07/gallon for non-sparkling bottles under 14% ABV up to $3.40/gallon for sparkling wine.
For some importers, their warehouse is the final stop for the wine before it reaches the retailer or restaurant that will eventually sell it to you. Others must form relationships with distribution companies who take on custody of the wine before selling it to their accounts. If the wine needs to move from importer to distributor, additional freight charges apply.
Specialized freight companies like US Wine Transport are able to consolidate and ship smaller loads, making it possible for small fine-wine distributors to exist in the Twin Cities. However, we tend to pay a premium because we are farther north than Chicago and there aren’t as many routes that come our way.
Once the wine does eventually make it to Minnesota, the distributor must figure out how much they are going to charge for the wine. Exchange rate, tax, insurance, shipping, and freight, in addition to their margin, are all calculated before bringing wines out into the market to share with…
Retail Locations and Restaurants
At the retail and restaurant levels, pricing can diverge drastically. Retailers tend to operate within margins similar to distributors, whereas restaurant markups can fall between two- to four-times the purchase bottle price. As a consumer, it is always important to remember that at a restaurant you are paying for much more than the bottle of wine itself.
All along the crazy and complicated path from vineyard to glass are people making decisions about how much a wine is worth, putting a monetary value on the often literal blood, sweat, and tears of the winemaker. And while it is often easy to forget the big picture, I will always be in awe of the many hands it took to get that bottle of wine to my door.