In 2011, prices for Bordeaux were at an hit all-time high. The region also almost completely dominated the fine wine market, accounting for nearly 95% of trade by value. In the years that followed, its prices and share of the market both dropped.
Five years on and prices for top Bordeaux have climbed – the Bordeaux 500 index is up 21.8% year to date – but its market share is largely unchanged from last year at 74.4% as trading remains broad.
Burgundy bounced back as the second most traded regional group this year, after slipping behind Italy in 2015. It took 7.7% of the market by value, compared to Italy’s 6.0%. In third place, Champagne has taken 5.3% – down a touch on last year, but well above its 2.8% share in 2014.
Market share for the ‘Rest of the World’ held steady at 4.7%. Although the USA was the biggest player here, activity broadened to include trade for English and Chinese wines for the first time. Other regions trading this year include New Zealand, Lebanon, South Africa and Argentina.
Five years ago, the industry benchmark – the Liv-ex 100 index – reached its highest ever level when it closed on 364.7 at the end of June 2011. The Bordeaux 500, which tracks the price performances of 50 leading Bordeaux wines, reached its highest point one month later. This marked the peak of the boom for fine wine that began in mid-2005 and was spurred on when the acclaimed Bordeaux 2009 vintage was released in Spring 2010. But how have prices performed since?
The major indices drifted from peak until the end of June 2014, the market’s recent low. The Liv-ex 100 was down 36%; the Bordeaux 500 dropped 23%. They have both shown signs of recovery since: each has bounced 10%.
However, price performance has not been uniform. The chart below shows disparity between the impact of the downturn on different sub-indices of the Bordeaux 500. While the Left Bank reds – the First Growths in particular – were hit the hardest, top Right Bank wines saw a shorter and less severe period of decline, or even continued to rise. The Sauternes 50 shows no correlation with other sub-indices: it has been gently sliding for the past five years.
The price movements of wines within the index tell a similarly divided story. Of the 50 wines represented by the Bordeaux 500, 32 have dipped since June 2011. The remaining 18 – shown in the table below – have bucked the broader trend by increasing. The biggest climber, Angelus, is up 52.1%; Duhart Milon, which has fallen the furthest, is down 45.5%.
The Right Bank is well represented among those that are up: eight of the 15 Right Bank wines in the index appear in the table below. From the Left Bank, Calon Segur is the best-performer by a significant margin, up 38.8%. Next is Petit Mouton, the only second wine to appear despite a recent boost for the group.
Among the wines that have declined are those that gained the most during bull market. Five of the top ten fallers are First Growths and their second wines – and with Duhart Milon dropping the most, the Lafite stable is very present.
So where next? The Right Bank 100 index is currently at its highest ever level. Other indices – notably the Fine Wine 50 – have still been recovering from the recent low. Whether a more uniform movement will be observed going forward will depend on where buyers find value next. What is clear is that the various groups begin the next five years from very different starting points – and this is just Bordeaux.
One year ago, Robert Parker’s ten-year retrospective review of Bordeaux 2005 was released. Prior to the release of the report, some felt that the critic had initially underrated the vintage. Parker himself had conceded in an interview with Liv-ex in 2012 that although he was “originally worried about the tannin levels in 2005 […] the wines are so concentrated I think they will be just fine – they just need a lot of time.” This, combined with a handful of upgrades in late 2014, led many to anticipate further upgrades across the vintage. Prices began to rise and trading activity increased.
The results of Parker’s tastings revealed 12 ‘perfect’ 100-point wines – up from the two that were awarded three digits in his first in-bottle report. However, with the exception of Haut Brion and Mission Haut Brion, these high scores were concentrated in the Right Bank – a surprise to many.
One year on, trading activity for Bordeaux 2005 has returned to a level seen before interest piqued towards the end of 2014, as the chart above shows. But how have prices reacted?
Between June 2014 and June 2015, when Parker’s report was released, the 2005 vintage wines of the Bordeaux Index gained 10.3%. Since then, increases have been slower: the wines are up 4.9% over the past year on average. Performance has been divided: two thirds are in positive territory over one year; the remainder have declined.
A handful of wines have seen a significant boost. Some of these, including Smith Haut Lafitte and Haut Brion were beneficiaries of Parker’s review. Others owe their successes to current trends in the market. Four of the five second wines of First Growths – which have recently found demand – are represented. Pavillon Rouge 2005 has increased by 18% over the past year despite dropping three points in Parker’s review.
Among those that have declined is Margaux 2005. Parker had twice awarded it a barrel range touching 100 points, making it a candidate for the perfect score last year. The wine instead maintained its score of 98+. It crept up a modest 7.8% in the year ahead of the report but has dipped 5.1% since failing to see an upgrade.
After announcing his Bordeaux retirement last week, Robert Parker released a new batch of scores in the Hedonist’s Gazette on Friday. In total, he offers ratings of 21 wines – including ten Bordeaux reds from the 2009 vintage – which were all tasted at a dinner in January of this year.
Parker describes the 2009 flight as a “colossal showing”. He adds: “As I have written and said publically many times, 2009 is the modern-day version of 1982, except much more consistent…”
The critic awarded five ‘perfect’ 100-point scores, including an upgrade for Pape Clement 2009 which he most recently scored 95 in The Wine Advocate. Wines including Haut Brion 2009 and Montrose 2009 held their perfect scores, while Clinet and Smith Haut Lafitte dipped.
The chart below shows a small flurry of activity for Pape Clement 2009 today. It last traded at £1,130 per 12×75. This is a 35% increase on its last trade price of £835 before the 100-point score was released. Time will tell if the wine holds at this level, but these early indications certainly suggest that the power of Parker is still very much alive.
James Molesworth is a Senior Editor at Wine Spectator with a tasting beat spanning Bordeaux, the Loire Valley, the Rhône Valley and South Africa. Before he headed to Bordeaux to taste the 2015s, Liv-ex caught up with him to find out about his approach to tasting, thoughts on the Bordeaux market and his personal experience of working in the wine industry.
Wine Spectator has a strict tasting policy that involves all wines being tasted blind. How important are blind tastings?
I truly believe single blind tasting is the only credible way for independent journalists to review wines. It’s critical to remove any possibility of label bias from the equation. Our readers seem to agree too: a recent web poll we conducted resulted in nearly 80 percent of respondents saying they felt reviews based on a blind tasting were the only way to guarantee fairness. There’s a lot more to the process than just sitting in an isolated room and tasting wines blind – the context that comes from visiting with producers in their vineyards and cellars is a crucial part of knowing and understanding the wines. But when it comes to the review, you have to remove as much subjectivity as possible from the process.
How should readers understand your scores for wines tasted from barrel?
Barrel reviews are just that – a snapshot of the unfinished wine, and that’s why we rate them with a score range. Generally, I think it’s pretty unusual for the vigneron to screw it up from that point, and I would generally expect the wine to perform as well, if not better, after the élevage. Consequently my score ranges on barrel tastings tend to be conservative.
At what point, and how, do you give definitive scores?
Definitive scores are always based on a blind tasting of the wine from bottle. For Bordeaux, the majority of the wines are tasted October through December following the summer they are bottled. This gives them time to recuperate from the mis – though I should emphasize wines are always rated based on ultimate potential when the wine reaches its peak, not on how the wine is showing just at that moment.
Is it harder for you to score impartially as you get to know the growers more?
Not at all – because I taste blind. I never know the producer or price when reviewing the wines from bottle. It’s true there are producers I respect and like quite a bit – and sometimes the hardest part of the job is when I take the bag off a blind sample and find I wasn’t as enthused about a wine as I thought I would be, based on the producer. On the flip side, there are producers whom I may not know as well, but I still need to respect and appreciate the wine they produce, if they’re good quality. This is how and why blind tasting protects the fairness of the process and promises as much objectivity as possible for the consumer.
In July last year, Suzanne Mustacich wrote in Wine Spectator that retailers reported “little interest” in Bordeaux futures, leading many to abandon the futures market altogether. Do you feel that US interest in En Primeur has been fading?
On the consumer level, it’s absolutely fading. En Primeur is becoming more and more trade oriented – for the negociants of course, and also the bigger retailers, both chain and individual to take positions on the vintage. I don’t think nearly as many end consumers in the U.S. buy En Primeur as there were during the hey day of say 2000.
Does 2015 have the potential to reignite interest in Bordeaux in the US?
Absolutely, But the re-ignition relies on more than just the quality of the vintage. To reignite interest in the U.S., the vintage would have to be superb, but also, and equally important, prices would have to be below perceived value.
Around what levels do you believe that the 2015 vintage should be priced?
I’m pro-consumer, not pro-trade. Prices should be as low as possible to move as much inventory as possible into consumer’s cellars as quickly as possible. Comparisons to previous vintage’s quality aren’t fair. Currency exchange rates, adjustments for inflation, other economic factors – all make straight up comparisons from vintage to vintage silly. There’s also a ton of great wine out there – not just Bordeaux.
Latour have already left the EP system and Mouton recently announced that it would be releasing fewer bottles EP. How do you see the future of the system?
Little will change. Only a few elite chateaus can afford to hold back greater portions of their inventory, or leave the En Primeur market altogether, as with Latour. But most other chateaus need to power of the place de Bordeaux to pay them for their crop before the wine is bottled. It’s still a fairly efficient market, and the negociants that are well capitalized and smartly run are a critical cog in the machine. If there were to be any significant change, I might see some non-Bordeaux proliferating on the place. There’s already a few super Tuscans, Homage a Jacques Perrin from Beaucastel etc. I wouldn’t be surprised if elite Burgundy producers and a few others decided to go that way, and circumvent the margins that are enjoyed by the secondary and grey markets on their wines.
Within Bordeaux, which chateaux are you most excited about?
It’s not my job to force my personal favorites on folks. Instead, I look at the big picture for my readers. It’s fun to compare the first growths each year. To watch the cluster of elite Pomerols push each other. To see how the different areas of St.-Emilion perform each year. And it’s also just as fun to turn folks on to the dry whites, or a great value from Castillon, or remind them of the pleasures of Sauternes and Barsac. It goes back to the rubric of blind tasting, and rewarding consistent quality. Telling that story to my readers is more interesting to me. I want them to make an informed decision about all the wines out there, and then they can home in on their favorites.
Which if any of the recent “great” Bordeaux vintages – 2005, 2009, 2010 – has been your favorite and why?
There’s 2010 and then there’s everything else. Fruit and structure for days. Terrific spine, definition, precision. It’s all there. I’d be ecstatic if I got to review another vintage as good as 2010 before I retire.
Do you feel that any recent Bordeaux vintages have been underrated?
Right now both 2001 and 2004 are delights to drink, with no rush either. 2011 will win fans down the road too. On the flip side, there are overrated vintages. 2008 is a prime example. And 2003 is showing some really weird tendencies too.
There has been discussion about the appeal of Bordeaux wine to millennials. How do you think it competes with the new world/other regions?
Young people don’t have the discretionary income to spend on elite Bordeaux, don’t cellar wine long term (which Bordeaux requires), and are more interested in far flung regions and what’s ‘new’ rather than established benchmarks. Added up, these factors become quite the Gordian knot for Bordeaux to untangle. But any tasting I’m at, if there’s an older bottle of elite Bordeaux being opened, that bottle draws a crowd, millennials included. I think the pendulum will swing back and the millennial generation will eventually investigate Bordeaux, if it hasn’t started to already. Nonetheless, Bordeaux can’t just sit around and wait for that to happen by itself – Bordeaux needs to engage with these consumers on a personal level.
You say that the Rhone is your favourite region. Why is this? Which Rhone producers or appellations are exciting you the most?
The Rhone is where my heart is. I grew up with it. My first visit as a young boy to France was capped with a stay in Provence. My first job in the wine business was with a retailer who specialized in Burgundy and the Rhone. I love the terrain, I love the light, I love the feel of the place. I enjoy the people. I enjoy the shift from Lyonnais cooking to Provencal cooking as you move south. There isn’t a corner of the region I don’t dig. As much as I respect Bordeaux, I do love the Rhone, and it makes up more than half my cellar. But I still need to be objective when I review the wines from all my tasting beats.
Are there any regions in the New World that are exciting you at the moment?
I cover South Africa as well, and I do think the Cape is teeming with new, interesting stuff. I wish I got to taste California a little bit more than I do, but I dig the exploration into more coastal and mountainous areas that’s going on, when it’s driven by terroir and not because of a pre-ordained style. New York’s Finger Lakes has some growing charm and interest. But to be honest, the vast majority of what I taste and work on is French, and primarily Bordeaux and Rhone. So I’m not ultimately qualified to comment on much else.
What would you consider your greatest achievement?
Hmmm, well, I’ll put it this way. I’m not interested in being first to make a grand pronouncement on a vintage or claim to discover a producer or hang my hat on some catchy phrase. Winemaking isn’t a race, so covering it shouldn’t be either. I prefer to put my head down and do the work, and take a long term view. I want to focus on quality first, style second. I think it’s important to describe things to the consumer and educate them, and then let them decide. I’m here to be a conduit of objective information from the field to the consumer. And so when I retire, we’ll let the consumer answer this question.
Before joining Wine Spectator, you worked as a Sommelier. Has this experience informed the way that you communicate about wine in your writing? What information about wine is most compelling to consumers?
My somm stint was brief – just a year, and it was a long time ago. I’ve been at Wine Spectator 19 years now. I worked at a rather old school restaurant with a type of clientele that pretty much knew what they wanted – I wasn’t doing a lot of educating there and the clientele wasn’t too interested in branching out. I think I learned how to describe wines in a way that would turn people on to them, or to differentiate between wines in a way that would help the diner have fun with their decision. Pulling non-wine jargon into the wine lexicon is important for getting people turned onto wine. If anything, my brief sommelier stint gave me an opportunity to do that.
In your Twitter bio you state: “I work hard, I play hard. Tag along if you think you can keep up”. What does playtime look like for you?
Outside of the office I tend to dive into music – I’m a vinyl enthusiast with a passion for jazz and blues. I love cooking. I love the movies, art, photography and a good haiku. I love sport and exercise, from golf to running and more. No surprises really, for someone in the wine business, because we enjoy intellectual hedonism. And when it does come time to enjoy special things – be it wine, food, music – I’m not afraid to put the boat out. But as much I as enjoy hedonism, there needs to be a balance. Simple gluttony or excess is not particularly attractive to me. Consequently I think keeping fit and healthy is a critical component to this job and I work as hard on my 10K time or spinning class as I do on anything else. That’s why you’re just as likely to see a race bib posted on my instagram feed as you are a bottle of wine. You have to pay to play. You can set a pretty busy pace for work and play without burning the candle at both ends.
How do you see the role of critics/writers changing with the internet and peer-to-peer sites and apps such as Cellar Tracker and Vivino?
I don’t see it changing much really. People love to talk about the democratization of wine and how these sites allow for a greater range of discussion and opinion, and that’s all well and good. Wine is a big tent and I encourage that kind of exploration among consumers. But while we all love to talk about a movie or restaurant with our friends over the dinner table, we still reference the movie or restaurant critic’s review. Independent third-party reviews from experienced professionals will always play a huge role in this business.
On March 21, Latour is expected to release the total remaining stock of its 2000 vintage and the 2009 vintage of its second wine, Forts Latour.
The high-scoring Latour 2000 last traded on Liv-ex at £6,800 per 12×75 (€722 per bottle), down 40% from its peak in March 2011 when it traded at £11,275. It has a current Market Price of £7,200 (€767 p/b) and received a score of 98 points by Robert Parker. Current best live bids and offers stand at £6,700 (€712 p/b) and £6,850 (€727 p/b) respectively.
Forts Latour 2009 last traded on Liv-ex at £1,210 (€128 p/b). This is 48% lower than its peak price of £2,306 on the Exchange in June 2011. The wine was awarded 95 points by Robert Parker. Current best live bids and offers are at £1,210 (€128 p/b) and £1,280 (€136 p/b).
With 95-points, 2009 is the second-highest ranking of the vintages released since 2000, pipped only by the 97-point 2010 vintage.
Mission Haut Brion 1998, on the other hand, was recently released ex-Chateau at a price equal to its Market Price and is reported to have sold through.
Robert Parker once said that Latour 2000 “flirts with perfection” and called Forts Latour 2009 “possibly the best second wine ever made” at the property. The quality is there – but will the price be as good?
For the first time since May 2011 – before the peak of the market – the Bordeaux 500 Index is the best performing sub-index of the Liv-ex 1000 over one year. This has been driven by buyers returning to the market, but looking for value.
The best performing sub-index of the Bordeaux 500 is the Second Wines 50: since February 2015 it is up 8.8%, outperforming all other groups. This has been driven by Asian demand for strong brands – at lower price points.
The second best performing sub-index is the Left Bank 200. It has gained 3.8%, and 16 of the 20 wines within the index have appreciated over the year, as shown below.
Like the Second Wines, the wines within this sub-index have strong brands, good-sized productions and are available at relatively accessible prices – the traditional hunting ground for UK, US and European buyers.
The outright best performer, Beychevelle (+13%), appeals to all of these markets.
Search for vintage prices of the above wines at www.cellar-watch.com – or use the price search widget on the blog sidebar.
Last week Liv-ex analysed price variations – the highest and lowest Market Prices against the current and En Primeur release prices – of the Bordeaux First Growths and other Left Bank wines from the 2006 vintage. The charts below display the same data for key wines from the Right Bank sub-indices of the Bordeaux 500 index.
From the Right Bank 50, both Petrus and Le Pin 2006 and have appreciated since En Primeur release, up 7.1% and 7% respectively. The other three have all fallen. The high-scoring Ausone 2006, which Robert Parker describes as “a ballerina with density and power” is available at the greatest discount (-46.7%) to its release price.
Of the 2006 vintage wines in the Right Bank 100 Index – shown below – eight have increased or held their value since release. Only Evangile (-24.6%) and Troplong Mondot (-19.2%) are currently discounted on their release prices. Among the others are some significant movers. Fleur Petrus was released at £420 per 12×75 and has a current market price of £1,250, up 197.6%; Clos Fourtet, currently £585, has gained 101.7% since being released at £290.
See similar analysis on the First Growths and other Left Bank wines. Analysis on the Second Wines and Sauternes – the best and worst performing groups – will be posted this week.
For historic price information on the wines mentioned, use the price search tool on the right-hand sidebar.
Owner: Bruno Borieand family Appellation: St Julien Vineyard area: 100 hectares Average annual production: 120,000 bottles p/a Second wine: La Croix de Beaucaillou
Having once formed part of Beychevelle, the vineyards that were destined to become Ducru Beaucaillou were partitioned and sold off in the 17th century to cover the cumbersome debts of the chateau’s late owner. By 1720 the fledgling estate was run by the Bergeron family, who named it Beaucaillou – or “beautiful pebbles” – after its stony terroir. Following their 70-year tenure, Beaucaillou was bought by Bertand Ducru. As well as appending his name to the property, Bertrand and his children invested heavily in the vineyards and contributed much to the quality of the wine. Their efforts culminated in the chateau’s classification as a Second Growth in 1855, placing it alongside the likes of the Leovilles and Cos d’Estournel. A decade later, however, Bertrand’s daughter Marie-Louise sold Ducru Beaucaillou to Lucie-Caroline Dassier, the wife of a wealthy wine merchant. Lucie-Caroline’s husband, Nathaniel Johnston, went on to become Mayor of St Julien, though his role in the discovery of Bordeaux mix – a copper sulphate solution that ameliorated mildew – is perhaps his most famous achievement.
After Lucie-Caroline’s death, Nathaniel Johnston married Princess Marie Caradja of Constantinople and the couple commissioned an award-winning architect to extend and redesign the chateau to suit Victorian fashions. But economic hardships in 1929 forced the Johnstons to leave their palatial home and in 1941 it was bought by Francis Borie. Today the Bories own a number of chateaux in the Medoc, including Grand Puy Lacoste and Haut Batailley. Ducru Beaucaillou has been run by Francis’ grandson, Bruno, since 2003.
Prices for Ducru Beaucaillou soared during the China-led bull market of 2009-11 and outpaced increases for its parent index, the Left Bank 200. Although both initially declined at a similar pace after the market rolled over in June 2011, Ducru held a steadier level from the beginning of 2012 and has since shown signs of recovery. Over five years, it is up 19.6%; the Left Bank 200 is down 1.2%.
Of Ducru’s recent vintages, the 2008 has been the biggest riser over the past 12 months: its market price has moved from £780 to £850 per 12×75, an increase of 9.0%. As the chart below shows, it is one of the higher-scored vintages but is still available at a significant discount to the “great” vintages of 2005, 2009 and 2010. Robert Parker called it “one of the stars of the vintage”. The next best performer is the 2012, which is up 8.1%.
Other vintages that look to offer relative value, shown below, include 2006 and 2014.
You can view more historic price data for Ducru Beaucaillou vintages on Cellar Watch by clicking here. Cellar Watch subscribers can track the prices of Ducru Beaucaillou vintages by adding them to a cellar. Sign up here.
Following gains made by the Liv-ex 100 and Liv-ex Fine Wine 50, the Liv-ex 1000 index – the broadest measure of the market- moved up 1.1% in January to close on 247.8. The Bordeaux 500 Index also edged up, moving 1.4%. Both of these indices are now at their highest levels since April 2014.
After four and a half years of decline for the region, the Bordeaux indices* led the way in January, with the most positive news coming with the performance of the Bordeaux Legends 50 Index. Composed of a selection of 50 Bordeaux wines from exceptional older vintages (from 1982), it gained 1.5%. This makes it the top-performing sub-index last month.
The Italy 100 gained 1.2% while the Rhone 100, which has been sluggish over the past two years, closed the month up 0.9%. The Champagne 50 is now the weakest sub-index over twelve months: after dipping 0.1% in January it is down 2.6% over one year.
*Bordeaux 500 Index, Liv-ex Fine Wine 50, Bordeaux Legends 50.