Once the winemaker has her expensive French oak barrels and begins aging her Cabernet Sauvignon in them, she will probably have to wait a good two years before that bottle hits the marketplace. Some winemakers will age their Cabernets in bottle for an additional year before release. The reality of the business is that winemakers do not make any money in the short term to cover production costs. At least they have time to consider all the other costs looming before them.

Packaging to Sell

When wines are ready for bottling, distinctive packaging is a must. The bottle itself can start at 50 cents and go up to $2 for a thicker, higher-quality version. Corks can cost anywhere from ten cents to $1.

The wine needs a label. First, someone has to design it. Then, the labels have to be printed — at 20 to 30 cents apiece. And before the wine goes out the door, it goes into a cardboard case, which can cost up to $7.

Establishing a Price

The winery has measurable production costs that it has to cover if it's going to stay in business. But, in setting a price for the wine, there are other matters to consider. One is the winery's profit. How does the producer allocate that on a per bottle basis? It will depend on the number of bottles produced. The fewer bottles the winery has to sell, the more it has to charge per bottle. Larger volumes will make up for a smaller per bottle margin.

Another consideration is the perceived value of the wine. The winery wants to position its wine at a price that is in line with other wines of the same caliber and stature. If the producer prices it too high, consumers will buy other wines instead. If the producer prices it too low, not only will the company lose money, but it will hurt the reputation of the wine as well. The winery's goal is to price it high enough to attract serious wine drinkers, but low enough to make sure it all gets sold.

Marketing Costs

Wine producers do advertise, but the money they spend on such outreach pales to what big brands such as Coca-Cola and McDonald's spend. Wine marketing dollars mainly pay for tasting rooms, a sales force, and promotions. In addition, given that wines are sold through distributors in each state means that most of a winery's marketing efforts are directed toward building relationships with those entities, rather than with individual consumers.