Why buy local?
Buying local is the buzzword of the decade, but not everyone is on board. Particularly when it comes to buying local wine. The perception for some is that local wines are too expensive or the quality doesn’t correlate with the price. What some may not realize is just how far the economic impact spreads when you buy from a local winery. We’re going to debunk a few common myths about buying local wine.
MYTH: The higher the price, the better the wine should be.
There are a few problems with price-quality correlation myth.
Firstly, there’s no accounting for taste. We all enjoy different styles of wine, regardless of price. Think of it this way: if you love full-bodied, peppery Shiraz you may be able to appreciate one that costs a little more and the higher price tag is worth it. If you don’t enjoy drinking Malbec and see one with the same price tag as the Shiraz, you most likely wouldn’t purchase it since it’s not the style you prefer as it wouldn’t be worth it for you. If you don’t drink white wine, an aged Riesling with an $85 price tag could seem ridiculous to you, but to a white wine lover that price may indicate great quality.
Another problem with this myth is the factors affecting the price of a wine are different with each country, sub-region and winery. This is explained in greater detail below, but essentially, if it cost more to make the wine, the listed price will be higher, regardless of quality.
Sometimes there is an element of truth to the myth. When a winery takes the extra steps to ensure quality, the wine can be more expensive. Hand sorting grapes is labour-intensive and costly. This might be one way a winemaker practices quality control which will directly affect both the price and quality of a wine, but there isn’t always a direct correlation.
FACT: The cost of production directly affects the cost of the wine
The cost of producing wine varies locally and around the world.
No matter where the winery is located, there are some basic factors that affect the price of the wine.
- the cost of labour
- machine vs manual work
- yield size
- cost of land
- labour cost
- type and availability of equipment
- ageing vessels (oak, concrete, stainless steel)
- storage for ageing (facility and tying up capital)
- some grape varieties are more desirable than others
- some grapes are easier to grow in certain climates
- the risk changes from region to region
Packaging and Distribution
- size, shape, weight of bottles
- labels (material, artwork, etching)
- distribution laws
- retailer profit margins
- transport cost (shipping by sea is less expensive than land)
Let’s look at a practical example: You’re in Alberta buying a Merlot from British Columbia vs a Merlot from Chile. Chile has been making wine longer than Canada, so right there the start up costs are different. A 4th generation Chilean winery does not have the same overhead as a winery from BC that’s only been around for 6 years. The Chilean winery may even produce more wine than the BC winery which means they have volume on their side and can produce the wine for less. Because of the difference in climate, those Merlot grapes may ripen quicker than the ones in BC which means a longer wait for harvest.
Let’s say that both vineyards are handpicked, the cost of labour may be considerably different. We could argue that the Chilean winery uses hybrid oak barrels or neutral barrels whereas the BC winery is using newer (and more costly oak barrels) for ageing. Now they need to get it into Alberta. The local law requires an importer to bring the wine into the province as a winery can’t ship directly to a retailer or restaurant. That import agency might love that BC wine and want to represent it, but has to take a greater share of the profit because there isn’t enough volume to make a sufficient income on it. They’re relying on the Chilean wine for volume and can take a smaller cut. Now, it’s at a retailer who then decides how much to sell it for which may be partly based on what they can get for it. In the end, the Chilean Merlot costs you $15.99 and the BC Merlot is $22.99. Is one better quality? Maybe not, since there are so many deciding factors in the price, so the quality might not correlate with the price. But what we do know is that the cost of producing that wine does directly affect the price.
MYTH: Local wineries are greedy. I can buy the same quality wine from another country for a lot less money.
Sure, some people are greedy, but most local wineries don’t actually want to gouge you.
Like any business, there are those who truly love what they do and if their entire staff volunteered to work for free and the owners didn’t have to make a living, maybe you could buy that wine for little to no money. The opposite could also be argued. “Greediness” is found in all industries. There are always people who will want to take the largest profit margin possible, even if it means gouging their customers. This isn’t unique to the wine industry and it certainly does not represent the majority of local wineries.
Can you get the same quality wine elsewhere? Maybe. Just keep in mind you might be comparing apples to oranges. In fact, there are tricks that wineries can use to give you the impression of quality while taking some short cuts. Without calling anyone out, there is a popular oaked Chardonnay that sells for under $20 a bottle and can fool even some of the most discerning palates. That wine never actually sits in an oak barrel ageing, it is “oaked” by adding either chips or essence of oak. This process is an effective way to give you the impression that it has been ageing in oak without the cost of an expensive oak barrel or having the capital tied up in ageing wine. You may try two oaked Chardonnays side by side and not know the difference. One has oak flavouring added and costs $12, while the other has been in an oak barrel for 16 months and costs $35. You might feel cheated by the more expensive one, but what has happened in that case is the less expensive wine is the one taking you for a ride. That being said, if you don’t care too much about the process and they both taste the same, you can definitely save a buck by going with the cheaper option. But we can’t accuse the local winery of being over-priced.
Packaging can also play a role in giving the impression of quality one way or the other. We often judge wine we haven’t tried by its label. A great looking label doesn’t necessarily reflect what’s in the bottle, nor does a label you don’t care for mean the wine isn’t good. There’s a reason we’ve been told not to judge a book by it’s cover.
FACT: When you buy from a local winery, you contribute to the local economy.
If you’re still not convinced to buy local, do it for the economy!
The impact on the local economy has a far greater reach than you may realize. Not only are you supporting that particular winery, but also the local suppliers and contractors that rely on that winery for their livelihood, as well as jobs that are created at the winery itself. In Ontario, the average bottle generates $43.63 towards the local economy.
Another significant impact is the tourism industry and specifically wine tourism. In British Columbia alone, the wine industry has a tourism-related financial impact of approximately $600 million per year.
The impact of local wine on the economy is best illustrated by this great infographic created by the Canadian Vintner’s Association.
If you’re unsure about buying local, there are many factors to consider. Taking the time to learn about wine in general can also help you make better buying decisions. We encourage you to browse through JustWine University to get a handle on some of the foundations of wine.