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The Price of a Bottle of Burgundy

I know what you’re thinking. Compared to the average bottle, Burgundy can seem a little expensive.

But setting aside that Burgundy is about as far as you can get from the average bottle, it’s important to us that our customers feel they’re getting a sense of value when they receive their bundles and pop the corks. And to really understand why Burgundy’s price point is on the higher end, we’ll need to dive into *cue groan* the economics of Burgundy winemaking.

With that aim in mind, this article covers some of the more distinctive features of the regional wine making scene in Burgundy. Hopefully by the end of the article, you’ll have an intuitive understanding of why the price point is where it is.

First off, Burgundy is really small

One of the smallest wine regions in France in fact, making up 3% of French wine production. Burgundy has only 70,000 acres under vine. About 14,000 of those are found among the gently rolling slopes of the acclaimed Côte-d’Or region, where the best that Burgundy has to offer is found (and where we source virtually all of our wines). 

Within the Côte, the top vineyards - typically those designated as Grand and Premier Cru - make up only a small fraction of the acreage at less than 15% of production!

To put these numbers into perspective, compare them to Bordeaux’s 300,000 acres under vine, or to California’s 600,000 acres if we want to look a little closer to home.

As much as in any other industry, the economics of supply and demand are hard to get away from. Size puts a fundamental limit on how much wine it can produce, and while Burgundy’s 200 million bottles a year may sound like a lot, when you compare that to California’s three billion bottles a year, it starts to put things in perspective!

On top of that, Burgundy’s grapes can be difficult to work with. Pinot Noir is notorious for low yields and sensitivity to heat, pests and mold, and while Chardonnay is a relatively robust grape, early budburst puts it at grave risk of damage by early spring frosts. This happened as recently as 2021, when most Burgundy vineyards lost nearly 90% of their Chardonnay. 

Lastly we have traditional practices like dry farming (no irrigation allowed!) and green harvesting (dropping fruit in the summer to allow the vines to concentrate on fewer berries), which (like everything in Burgundy) increases the quality of the finished wine, but results in smaller volume. Indeed, to further reduce the potential for quality decline, French laws also put strict limits on total production volumes for the most sought-after appellations, so estates can’t easily make up for volumes lost on less-abundant vintages.

Right out of the gate, small supply puts an upward pressure on price.

Quality, History, Reputation - and extremely high demand

That brings us to the second half of the equation - demand. 

Burgundy makes some of the best wine in the world, and has been doing so for centuries [link to history of Burgundy wine]. As far back as the 1400s, Burgundy was already being served at the tables of kings and popes, and has maintained that premium status to this day. 

That reputation is hard-earned and well-deserved. From the premium domaines to the small-scale producers, winemaking in Burgundy is a way of life, and those who can navigate the region are almost assured of finding remarkable gems at all price points and appellations. 

The quality of Burgundy wine can be attributed to a number of factors. On the one hand is its excellent terroir, perfect weather and a geography that seems designed to produce ever-varied, nuanced and delicious wines. Just as importantly, it’s worked by producers who know how to make the best use of that landscape, and who’ve perfected the cultivation of Pinot Noir and Chardonnay over hundreds of years.

Burgundy is more than the sum of its parts. Every bottle is a taste of history, representing the accrued knowledge of generation after generation of winemakers, of intimate familiarity with the land and the grapes, and a dedication to doing things the right way, not just the quickest or cheapest way. Burgundy is the birthplace of terroir, and producers are rightly respectful of their long heritage, and dedicated to maintaining it.

And that’s why there’s nothing quite like a Burgundian Pinot Noir, a Burgundian Chardonnay. It’s the pinnacle of winemaking, and the world market knows it. 

When demand far outstrips supply, there’s nowhere for the price to go but up. 

Overhead, Equipment, Labor, Taxes

For the most part, that price increase doesn’t go into winemaker’s pockets.

There’s an old joke in the industry that goes something like: “How do you make a million dollars in the wine business? Start with ten million.”

Land prices have skyrocketed in recent years, which means France’s steep inheritance taxes can take decades to pay off. Then there are all the things you’d imagine that go into the costs - equipment, labor, bottling, labeling, storage, shipping, and investment to maintain the land and prepare for coming climate change. 

All these expenses have to be recouped from wine sales so they too are factored into the final price.

Many of these costs are fixed, the same for an expensive bottle as for a cheap one. That’s one of the reasons we sell at the price point we do: it’s where you get the most value, because most of the money goes towards the quality of the wine itself. Bottles at the higher end of the spectrum are undoubtedly delicious, but a lot of what you’re paying for is the name and the prestige. Similarly, buying the cheapest wines means most of your money is going towards bottling, packaging, and other overhead costs, rather than the wine itself.

Wrapping up

Winemaking, on the whole, is not really known as a high-margin industry. In fact, many producers are struggling just to stay afloat. High inheritance taxes, a fragmented ownership preventing economies of scale, and a dedication to preserving traditions like hand-picking and sorting can actually leave many domaines struggling to stay afloat, especially with the increasing damages wrought by climate change. 

All that to say, the higher price you spend generally doesn’t go towards lining the pockets of some rich investor. It goes towards sustaining this unique industry, towards ensuring that winemakers can continue to carry on with the vital traditions that make the region what it is.

The simple truth is that most people in the business aren’t in it for the money. They’re in it for the love of wine, because they want to share this remarkable beverage with the world. And it’s the same for BurgDirect. Ultimately our aim is to deliver great Burgundy wines from smaller estates - wines typically difficult or impossible to find in the United States - because we’re excited to share it, and because good wine should always be shared.

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