Buenos Aires, by Noelia Diaco. Photo is not visible, used only for sharing on social networks.

The economics of wine tastings

August 27, 2013
A few weekends ago we took the motorcycle up to Sonoma and had a very nice time tasting wine and enjoying the sunshine. The only less-than-stellar part of the day was a visit to Ravenswood Winery, which got us thinking about the economics of wine tastings.

We usually stop at wineries with $5 or $10 tasting fees (part of the reason we prefer Sonoma to Napa, where tastings can run $25 or more), and most of the time the fee is waived if you buy a bottle. We've always felt this is a fair and mutually beneficial arrangement. If you don't like the wine enough to buy a bottle, you still pay for the wine you drank. If you do buy a bottle, which we often do, the winery makes money from the sale and potentially earns a repeat customer (and many people join the wine clubs of their favorite wineries).

We were surprised when we arrived at Ravenswood to learn that the cost of a tasting is $15 and that the tasting fee is only waived if you buy three bottles. We ended up getting a pour or two for free and headed out. We weren't impressed at all with the wines we tasted and were glad we hadn't paid the fee. We scribbled some back-of-the-napkin calculations later and realized we were doubly glad we hadn't gotten ripped off. Here's our math:

  • Most of the wines being poured retail for at most $35 per bottle (and retail price obviously already includes a significant markup)
  • Most wine tastings include 5 pours of 1oz each for a total of 5oz
  • A bottle of wine contains 25oz
  • Conclusion: The wine tasting cost $3 per ounce; the retail cost of a bottle is $1.40 per ounce. That's a more than 50% markup, and the fee isn't even waived if you buy a bottle

That's not to say that every $15 tasting isn't worth the money. The tipping point for a $15 tasting using the math above is $75 — that's to say you're more than getting your money's worth for wines that cost more than $75 and you're overpaying for wines that cost less. Given the price of the bottles being poured at Ravenswood, a $7 tasting fee would have been fair.

Wine tasting fee Equivalent bottle price with 1oz pours Equivalent bottle price with 1.5oz pours*
$5 $25 $16
$10 $50 $33
$15 $75 $50
$20 $100 $66
$25 $125 $83

* Some wineries are more generous with their pours, which would change the calculation

Caveat #1: I am ignoring other costs that wineries incur from offering tastings, including paying staff to work the tastings. But there's also a clear marketing and long-term sales value to the tastings not counted in the straight-up fee.

Caveat #2: Some places, like Scribe Winery, sit down and talk to you about their wines for a significant amount of time. That would be a completely different situation. This was not the case at Ravenwood.

- Steph

Photo by Dave Dugdale

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