A Lesson in Wine Costs: Alit Pinot Noir
Wine Cost Transparency – Should You Care?
Have you ever wondered about the costs going into that bottle of wine you’re enjoying? How much of the bottle price was the grapes? How does a $5 wine differ from a $50 wine in terms of actual costs? The cost of the grapes really does matter, in some less popular regions, growers may only earn $500/ton of grapes, but if you own the To Kalon vineyard in Napa Valley, you can charge $50,000/ton!
There’s a new game in town. Alit Wines is a new winery in the Willamette Valley in Oregon, and they are promoting a fully transparent, direct-to-consumer only approach. The idea is to create a close relationship with their customers by providing full transparency as to their process and costs as well as a high quality Pinot Noir; all at a lower cost by avoiding the whole multi-tier distribution system.
The American wine distribution system legally must go through a 3 tier system. The winery sells wine to a distributor, who sells it to a wine shop, who sells it to a customer. At each step, the business involved makes a profit and the government taxes the transaction. As the customer, you may pay 2x – 3x the price the winery sold the wine to the distributor. As you can imagine, neither the government nor the middlemen in the system have any incentive to change.
For many years, American wineries have promoted sales directly to customers through their wine clubs and direct-to-consumer sales. In order to not undercut their distributors, they sell their wines direct for the same price the customer pays in the shop.
Alit Wine – Transparent Pricing Direct to the Customer
The Alit team shares quite a bit about who they are and their approach to making the wine:
- Experienced, well-known winegrowing team: alumni of Evening Land and members of Chapter 24 Vineyards team.
- All the vineyard sources are organic and dry farmed
- The grapes are pressed whole cluster, no destemming
- Native yeasts and minimal sulfur are used in winery processing. No synthetic ingredients whatsoever
- Wines are aged 12 months in French oak, approximately 1/3 new barrels
The Alit Wines website goes into fascinating detail on their actual costs and profit. Have you every wondered where your wine dollar goes? Alit tells you down to the penny.
|All Natural Farming & Fruit (including land depreciation)||$5.66|
|Alit Team of Five salaries||$2.14|
|Winery & Equipment (including depreciation)||$3.31|
|French Oak Barrels||$1.11|
|Total Cost at the winery||$15.10|
|Gross Profit (45%)||$12.35|
|Total Price Shipped to Your Door||$33.33|
Is Alit a Good Deal? Should You Buy It?
At the end of the day, Alit Pinot Noir is a Willamette Valley Pinot Noir. How much should you pay? A quick check of non-single vineyard Willamette Valley Pinot Noirs available in Minneapolis shows a range of $16-$43. How does Alit’s inaugural effort measure up?
I purchased one of their 3 bottle packages and gave them a try.
Alit Willamette Valley Pinot Noir 2015 ($27.45 + $5.88 shipping direct to customer only)
Eye: Clear, pale ruby with a cool toned edge. Typical depth for Oregon Pinot Noir.
Nose: Clean, medium+ intensity, red fruit: strawberries, some light mushroomy warmth
Mouth: Dry, medium+ concentration, medium+ acidity, medium- tannins, pretty strawberry dominates the flavor. Has the smooth impression from oak but no obvious oaky flavor or aroma overtones. Well done.
The wine had very nice concentration – if Oregon had vineyard classifications as they do in Burgundy, I’d place this as a nice village level wine. The wine was enjoyable now and would benefit from perhaps 5 additional years of aging.
The Alit Pinot Noir was perfect with flank steak & risotto fritto. Risotto is a staple at our house, partly because leftover risotto fried pancake style in a hot steel skillet is so delicious. At the end of the day and the end of the bottle, I felt it was a very nice wine and represented good value.
Other thoughts on Alit Wines
If you’re interested in a bit more to the story, here are a couple of articles you might enjoy:
- Wine Spectator article on Alit and Transparent Pricing
- Wine Spectator article on Chapter 24 (appears to be the parent of Alit)