How Much Should You Spend for a Bottle of Wine?

You're in a wine shop. You ordinarily spend about $20 for a bottle of wine that you think you will really enjoy (less than $10 for one that you will just drink, but not feel anything special) and you encounter one of the store experts. She sees the sort of wines that you are looking at and recommends a bottle to you. But, it's $29.99. Should you buy it?

It's not really a question I can answer for you, but I can help you to answer it for yourself.

How much does that extra $10 mean to you? If you're Kevin O'Leary of Shark Tank fame and you are both a serious wine drinker and a wealthy man, go fot it. And, I would tell you the same thing if the price was $2,999 or $29,999. For a person like that, he would say that he would appreciate it and the difference in cost just doesn't matter to him.

If you're reading this, however, it's much more likely that the cost difference does mean something to you. Perhaps I've chosen the wrong dollar amounts for you. Perhaps, instead, it should be the difference between $10 and $15 or the difference between $70 and $100. In either case, it might be a tough decision.

There are good value wines at nearly every price point, at least until you get to the point that there can no longer be considered anything of that value. But, what are you buying anyway? This is not necessarily for the person who just wants a glass to have with their dinner, this is for the person who wants an experience. Perhaps that experience is about something that is just better. Perhaps it is something that, at least for your palate, is life-altering. Or, perhaps, it is simply a once in a lifetime experience.

I digress for a quick story. Several years ago, a friend who, at that time, was really beginning to explore wine was traveling for a special occasion. He sent me a link to the wine list, told me his price range, and asked me to make some recommendations. That I recall, his instructions were something like "red, really good, and up to $200."

I looked at the wine list and shocked him. On the list was a white wine from Sine Qua Non. It was in the price range and it was going to be really good. He pushed back, but said okay. I can assure you he did not regret it. Some wines just change the way you think about wine.

I get ads for wine all the time. It's sad when I get one that says that a wine is a bargain because it costs less than $1 per "point." I prefer not to spend $95 for a 96 point wine at retail. But, this is part of the problem. Wine prices do not correlate well to ratings. And ratings do not necessarily correlate well to your tastes or mine. That said, a wine that is nearly unanimously rated 100 points will be better to almost everyone and in fact by quite a bit than a wine with a consensus rating of 95 that will be much better to most people than a wine with a consensus rating of 90 and so forth. It's not a guarantee, but it's a good predictor.

My suggestion is as follows. Understand the types of wine that you like and that you are seeking to purchase. Let's assume, for the moment, that you love Napa Cabernet. You like your wines red and big and bold and really fruit forward. See if you can find a way to taste different versions of that type of wine. Perhaps there is a wine bar near you that does servings by the pour (1 ounce, half glass, full glass) so that you can taste various wines of that type at different price points. So, the $20 per bottle retail wine might be $1.50 or $2 for the 1 ounce pour, the $40 bottle might be nearly twice that and so forth. Taste them side-by-side or back-to-back if you prefer. 

Do you notice a difference? Is the difference worth the price given the size of your budget. If you do this with enough wines, you will reach a point where the wine you are tasting suddenly is noticeably better than everything else you have had. But, is it worth it? How much better will your life be or at least feel because you have had it.

There is a little problem with all of this. Prices do not increase linearly. In fact, to the extent that there is a mathematical relationship between price and quality, it is closer to exponential. In other words, if you are used to drinking a $10 wine and you want one that is twice as good, whatever it means to be twice as good, you might have to pay $40. And, if you want one that is twice as good as that, you might have to pay $160. 

Ouch!

So, how much should you spend? How much should you spend on anything? How much should you spend for a TV? Is the difference between LED and OLED worth it to you? How much should you spend on a car? Is the difference between a Camaro and a Ferrari worth it to you? 

In almost all of these products, and it is the case in wine as well, the margins are higher as you go upstream in pricing. That's why the price to quality relationship is somewhat exponential. 

Here is my advice. When you go into a wine shop, know what you want to buy (4 Chardonnay, 2 Sauvignon Blanc, 2 red blends, 1 Malbec, and 2 Chianti). Set your desired price that you want to pay and give yourself a bit of room in case you find that special bottle. So you have your desired budget and your willing to spend budget. Stick to your desired budget unless you find something that you think will provide you a special experience. And, save the quest for the life-altering experience to those moments when you are prepared to pay for them.