We've touched on pricing several times in class and have been repeatedly told that pricing of a wine is "more art than science" or "determined by what the market can bear". While all luxury goods have a certain degree of mystery around why some brands can charge x and others can only charge y, to me, wine is the most perplexing.
If a winery took an Everlane approach to pricing, I wonder if it would be accepted by the market? For those who aren't familiar with Everlane, it is a luxury clothing manufacturer and e-commerce retailer that offers products at a low retail markup. Every item for sale on Everlane's website has transparent pricing for the consumer, below is an example of what they provide for a cashmere sweater:
A winery could potential add similar transparency to the back of the bottle. The components would clearly be less precise and the majority of the cost would be based on depreciation of capex, but this would give vineyards a way to justify some prices. The costs of higher end oak barrels, longer aging, yeast, packaging materials, distribution, land, etc could be included. Additionally, a scarcity factor could be included if they only do small batch product which will naturally incur higher prices.
I doubt this would be successful for high end wines because their prices often can't actually be justified as they are based more on prestige than anything. However, for a winery that produces $15-30 bottles of wine, this would be a great way to explain the difference between their cheapest and most expensive bottle.
Keri, thank you for this post and sharing on Everlane! Am going to see if this might work for my wine business in Singapore as fair pricing is something we do, but perhaps we don't shout about enough!
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