Wine Terms: "Reserve"

“Reserve”
What does this mean?

Frequently, nothing.
Only in Spain, Italy and Portugal does the word have any legally defined meaning.
For wines from Spain, and some parts of Italy (Tuscany and Piedmont being the most important), the term Reserve/Reserva indicates that the wine was aged for a locally prescribed, and extended, length of time. These wines are not required to meet any exceptional standard, however, producers know that only their better wines will withstand this extended aging.
Reserve/Reserva is also legally defined in Portugal. In this case, it only means that a wine has a slightly higher alcohol level than regular wines of the same region. (High levels of alcohol – the result of riper grapes – were once exceptional. Contemporary winemaking, however, has made higher and higher alcohol levels routine... leaving the Portugese “Reserve/Reserva” without much genuine luster.)
By the way... in Portgual a wine which has been aged for prescribed, and prolonged, period of time is called a “Garrafeira”.

Outside of Spain, Portugal and (parts of) Italy, the term “Reserve” can be used by producers’ however they see fit. It may mean absolutely nothing. On the other hand, it is often used to designate a higher-quality wine, accompanied by a regular – slightly lower quality – bottling. (In this case, a Reserve bottling might be produced from the best of the grapes, the grapes harvested from the best parts of the vineyard, or from the barrels of wine which turned out best). It is also not uncommon for “Reserve” to indicate a wine aged longer in barrel, or a wine suitable for futher cellaring.

Why is wine so expensive?

I seem to spend most of my disposable income on wine. Even if you're less vino-obsessed than me... you've probably suffered occasional sticker shock at the wine store, and likely cursed wine's impact on your Visa bill.

Why is wine so expensive?

Every Grape Needs a Place to Grow Up
Land is never cheap.
Some of the world’s greatest vineyards cover semi-marginal land (steep slopes, rocky soil, etc). In this case, however, land prices are driven up by competing wine estates, and pressures from developers. Wouldn’t you love a sprawling home next to the vineyard?
Most wine is produced from less marginal sites. Land prices are driven up by competing crops (especially tree fruit), development (expanding subdivisions, tourist hotels, etc).
Want your own wine estate? Wine is sold, partly, based on origin; it’ll be easier to sell your wine if it says “Napa Valley” rather than “Montana”. Land in Napa is ranging from $75,000 to $200,000 per acre.
Of course, almost no one can afford to pay cash for a vineyard... so the estate begins with debt payments to manage.

Now the Vines
Starting from scratch, it costs (very roughly) $40,000 per acre to plant. The soil must be prepared, rootstock and baby vines must be purchased and planted. Local conditions obviously add to these start-up costs. Here in Ontario, starting a vineyard can require digging and laying miles of drainage pipe. In many other regions, an irrigation system must be built. In some cases this may be crude sprinklers, but local conditions (and regulations) may require extremely sophisticated computerized drip systems... miles of tubing delivering calculated portions of water to each individual vine.
While waiting for the vines and debt to bear fruit (this takes four years), a trellising system needs to be built. In most cases, this consists of hundreds of posts, miles of wire, and many hours of work.
During its life, a vineyard is a demanding friend.
Vines are pruned – almost always by hand – at least once (more typically several times) each year. This is complex work, requiring skilled workers.
Vines and fruit must be protected from various hazards. Most operations depend on pesticides; even organic vineyards rely on sprays like copper sulphate. Deer may necessitate expensive fencing, and birds, propane air guns. And then there is hail (netting helps, some use an airplane to disrupt the storm), and frost (Niagara’s vineyards are littered with wind machines which try to stop the coldest air from pooling over the vines). Of course, you can’t always hold back Mother Nature... estates must be able to withstand the occasional disastrous vintage.
Harvesting may be done by hand, or by machine. The machinery is expensive and only of use during the harvest. The cost of labour varies, but every region has the same problem: there are only so many workers and every estate is trying to harvest their grapes at the same time.
As the grapes are harvested, they should be sorted as they come into the winery... more hand labour (by the way, sorting can’t wait; once picked, the grapes begin to rot).

In the Winery
Once the harvest is finished, there are plenty more man-hours to pay for in the winery. Any estate needs at least one winemaker (highly skilled, well educated), a gaggle of cellar-hands, and an office staff like any other business.
The cellar is fitted out with expensive equipment: crushers, presses, stainless steel tanks, pipes, pumps and hoses. Fermenting grapes give off huge amounts of heat, and heat will spoil a wine, so the entire operation must be temperature controlled.
Many wines are aged in oak barrels. These each cost between $600-1200, and a have a lifespan of about four vintages.
Next, wine is bottled... another specialized piece of equipment (plus, of course, the cost of empty bottles).
It would easier if producers could sell their wine at this point (ala Beaujolais Nouveaux), but it must be stored until its ready for sale. This time ranges from months to – for many red wines, champagne, etc – a few years. Meanwhile, the accountants are shaking their heads... the estate is sitting on more and more (indebted) capital.

Now the stuff needs to be sold
Many wineries sell at least some of their wine themselves. This probably means having a retail store... it certainly means paying staff to deal with visitors.
If anyone else is going to sell the wine, it must be loaded onto a truck (and/or ship) and transported. By the way, shipping is paid by the pound and wine in glass bottles is extremely heavy.
A large percentage of wine is sold by retail merchants. If they are willing to stock your wine (this in itself can be a expensive task within a very competitive game) they will, naturally, add a mark-up to the price. Here in Ontario, the LCBO (granted, a state-owned near monopoly) marks up the its own purchase price of wine by 43%.
Its difficult to sell any product which no one has ever seen, or heard of, before. Running a one time (full-page) advertisement in Wine Spectator Magazine costs $35,000. You might also consider paying a retail merchant to stock your product at eye rather than ankle-level (very common practice).
We almost forgot taxes. The wine itself will be taxed (in many jurisdictions, alcohol is taxed very stiffly)... and while you’re figuring that particular price increase, the property tax bill (on all that land the vineyard occupies) has come due.
Similar to taxes, many estates are required to pay a variety of levies. Most common fees paid to the local “appellation” (region) to cover the cost of regulating the industry, paying tasting panels, and other quality assurance measures.

Consumer demand
One final factor: what is the consumer willing to pay?
I happen to be of the opinion that it is disgraceful to sell a product for a price completely out of proportion to the cost of producing it... our society doesn’t agree.
Many great wines are extremely expensive to make. In my mind, the example is a great Trockenbeerenauslesen(TBA): made from grapes picked one by one with a little pair of pickle tongs, carefully fermented over a period of months (sweet wines are very difficult to ferment and do so very slowly), and aged in bottle for years. It may not be sensible to pay hundreds of dollars for a bottle of wine, but at least in this case it has gone “somewhere”.
In some cases, the price of a wine may be driven up by its rarity. A thousand people may want to own one of only a hundred bottles of Chateau X. I’m not sure I have a better solution to the norm which is to settle such squabbles with credit limits. (I would not be the first to suggest that, in some cases, wines are produced in tiny quantities in pursuit of the price escalation which cult status brings.)
In many cases, the price of a wine is inflated by prestige. Consider the result of a wonderful review from a high-powered critic. This may put a strain on supply, causing the price to rise. More often, its a matter of merchants smelling an opportunity to raise the price.
In other cases, the price of a wine just plain inflated. Standing in the aisle of a retail shop, how can you tell the difference between: (a) a $50 bottle of wine which cost about $35-40 to produce, (b) a $50 bottle of wine which cost $5 to produce? Frankly, you can’t.
Sorry.
(Its not hopeless... but that’s a topic for another day).