The release of Cheval Blanc 2015 on Tuesday marked the end of this year’s En Primeur campaign. Only a handful of wines from the vintage – those offered later in bottle, or via agencies only – are yet to be released.
Yesterday, Liv-ex published the results of a survey where its merchant members were challenged to predict the release prices of a basket of wines. The average increase predicted was 17.8%; the reality was a 45.8% increase for the basket. Hardly any merchants overestimated.
When Liv-ex first published the chart above two weeks ago, Canon – up a high 56% on 2014 – looked almost anomalous. It now has company, with wines such as Ducru Beaucaillou (+52%) and Figeac (+70%) similarly upping their release prices. Mission Haut Brion is now the stand-out. It flew off the original chart when its 2015 came out a whopping 107% higher than the 2014.
Collectively this illustrates one central theme of this year’s campaign: price hikes on 2014 have significantly exceeded expectation – and the increases increased as the campaign went on.
Liv-ex will publish a concluding report on Bordeaux 2015 in two weeks’ time. It will be distributed to all merchant members. If you are a private collector, you will be able to access an abridged version via your Cellar Watch subscription.
Fine wine market analysis will continue as usual on the blog. Over the coming weeks and months, Liv-ex will explore regions outside of Bordeaux to look at market trends from Italy, Burgundy, Champagne and beyond. From Bordeaux, analysis will be published on 2005 to show what has happened since Robert Parker’s ten year retrospective review of the vintage one year ago.
A number of interviews with leading critics and Chateaux are also planned. You can find all recent interviews here.
We hope that you have found – and will continue to find – the analysis on the Liv-ex blog helpful.
Liv-ex has opened up the blog to Martin Klimmek (winequant.com). Martin is a Data Scientist who moonlights in the wine world. He is known in the financial mathematics community for work on model-independent pricing and hedging (Bruti-Liberati Prize 2012). Here he uses Liv-ex data to look at the historic impact of Robert Parker on the Bordeaux market, and explores whether price points might replace Parker points going forward.
Followers of this year’s En Primeur campaign will have noticed that release prices are creeping up again. What’s behind the upward creep?
In a previous post we saw that release prices have been stuck at elevated levels since 2011: after the heady bull-market for the 2009 and 2010 vintages, prices did not revert to pre-boom levels but got stuck somewhere in between.
You could say that the En Primeur system lost its innocence during the bubble years. Producers still remember a ballooning spread between En Primeur and London prices when the secondary market became red-hot.
The fear of regret is a powerful motivator. No producer wants to run the risk of leaving money on the table again, especially when a vintage feels right. The Wine Society has described the vintage in 2015 as “unquestionably the finest for the past five years.” Producers are aiming higher in case the vintage booms.
Apart from release price stickiness, there’s another reason we should not be surprised by the upward creep in prices: the wine market has lost a well established price signal. Parker’s handover of Wine Advocate tasting duties to Neal Martin marks the end of the era of the monolithic power critic. Consumers of top claret sympathized with Parker’s preference for concentrated, fruit-forward wines. Investors found his ratings helpful and easy to digest. Who or what will they turn to now? Will there be a Parker 2.0? Will vintage winners emerge from a cloud of digitally distributed vintage wisdom?
What would it take to assume the mantle? Let’s look at three examples of Parker’s unique ability to move prices in a market based on the elusive quality of good taste.
The Parker boost could be immediate and lasting. Here’s a chart of what happened to the Liv-ex market price when Parker upgraded his rating for 2009 Pontet Canet from 97 to 100 points (the date of the rating is indicated by the red line). Will anyone else be able to move the market like this again?
Parker helped indecisive buyers off the fence. A Parker upgrade made people willing to stick their necks out and say: “this wine is a winner.”
Let’s look at another example. In February 2009, Parker upgraded his rating of Lafite-Rothschild 2006 from 91 to 97 points. Prices on Liv-ex jumped 20% and the equivalent of 137 cases of Lafite changed hands on Liv-ex the following day.
The effect was immediate: available liquid was lapped up and more sellers entered the fray, competing to sell stock. Prices briefly touched old levels but quickly bounced back: the pre-Parker price level had become an elastic lower bound.
Granted, it’s easy to get carried away writing about Parker’s power. If we take a step back and zoom out in time, Parker’s influence appears as a blip on the radar: not even Parker can take credit for the incredible bull-market between 2010 and 2012. Larger forces were at play.
But suppose that Parker’s rating had been a disappointment. Would Lafite’s course through the bull-market have been less buoyant with fewer points?
Let’s look at an example where Parker points came in below expectations. In April 2008, Parker reduced the point range for Cheval Blanc 2005 from 96-100 to a definitive 96. This was his third rating of the wine after previous ratings in April 2006 and April 2007.
The trend had been upwards: 95-98 in 2006, 96-100 in 2007. The chart suggests investors had high expectations: a definite 100 was on the cards. But reality was four points short. After a gravity defying heroic purchase, the market-price began to decay.
With Parker’s spotlight shining elsewhere, the bull-market passed over this wine without leaving much of a trace. If it hadn’t finally received the expected 100 point rating in June 2015, market prices for Cheval Blanc 2005 may well have suffered further into 2016.
Parker’s influence came in a variety of flavors, from simple to subtle: his points could make a price jump immediately or they might ratchet up the lower bound on good value over time. A less favorable rating could set a ceiling on what investors were willing to pay.
The En Primeur market depends on trust, confidence and on stories that justify shifts in relative value. Sentiment is ultimately based on taste. Parker established a link between a tasting system and wine prices. It will take time for new signals to become established.
Until then the only familiar indicator of a wine’s quality is the price it can command in the market. It’s no surprise producers are aiming high.
Back in April, Liv-ex members predicted that ex-negociant release prices of Bordeaux 2015 would be 18% higher than for 2014 on average.
While the merchants’ prediction may have seemed reasonable towards the start of the campaign, it now seems wildly optimistic for buyers. With the Bordeaux 2015 campaign now entering its final – significant – stretch, one trend has been noticeable: the increases are increasing.
As the chart above shows, increases of 10-15% were common in April and early May. In the past month all key releases have been above 15% and most are much higher.
The impact of these increases on the ability of the wines to sell through has been weighted against reviews of their quality. Canon, the highest riser, has been a success. It was scored 98-100 by Neal Martin; James Suckling awarded a straight 100. Others have made increases without the same critical acclaim and have struggled to sell.
Many key names including the First Growths are yet to release their wines. The chart above points clearly in one direction. As Otis Clay was moved to sing: the only way is up?
It has been one month since Liv-ex reported on the first flurry of 2015 Petits Chateaux releases. At that point, price increases on the previous year were sitting at around 9% in Euro terms. For Sterling buyers, this equated to increases of approximately 19%.
Since then, the increases have increased with the entrances of several bigger names. These are shown in the table below.
With Vinexpo Hong Kong taking the spotlight this week, the pace of En Primeur releases has slowed considerably. After this interval, the floodgates are expected to re-open. Whether the uneven success of releases so far will guide the future of the campaign is yet to be seen.
In the meantime, Liv-ex has mapped scores by a number of key critics including Neal Martin, James Suckling and Jancis Robinson. To see – geographically – where the top scores lie, click here.
Chateau Coutet 2015 has opened this year’s campaign for Sauternes. It has been released at €26.4 per bottle ex-negociant. This is down 12% on the 2005 release (€30 p/b) and up 10% on 2014 (€24 p/b). The wine is being offered by the international trade at £285 per 12×75, making it more expensive than several vintages already in the market.
Still, it has received relatively strong scores from critics: James Molesworth called it “very long, boasting terrific range (94-97)”. Other Coutet vintages with scores at this level are currently commanding prices of £360-380.
See price performance for Coutet vintages on Cellar Watch: click here.
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.
With excitement building around Bordeaux 2015 – and the trade preparing to visit the region next week – Bordeaux grower, winemaker and writer Gavin Quinney (@GavinQuinney) of Chateau Bauduc offers a comprehensive report on how the weather affected the vintage.
You can download the full report as a PDF: please click here.
Mobile users can click on the charts below for larger versions.
As a backdrop to the official ‘en primeur’ tastings in Bordeaux next week, here’s my report on how the weather had an impact on the 2015 vintage. The graphs and images should provide a Bordeaux enthusiast with a fairly thorough grasp of how this fine vintage came about, and also why there are regional differences.
2015 was a dry year, with every month from March to October being drier than average – except for a wetter August.
A cold January and February led to later budding at the start of April but the early growth in the vineyard accelerated through April with warm weather.
The flowering in late May and early June, in close to ideal conditions, was the best for years, followed by useful rain in mid-June.
The summer wasn’t consistent – extremely dry in late June and July, then rain in August. At times, it was hot – 39 out of 92 days of summer saw 30°C or more.
Late August to 10 September was dry – handy for the dry white harvest and ripening of the reds.
The fallout from ‘Storm Henry’ brought rain from 11-17 September, just before the Merlot harvest. The amount varied significantly – eg 87mm in the northern Médoc v 16mm in St-Emilion (see below).
Crucially, it was pretty dry from 18 Sept-2 Oct for the bulk of the red harvest. Chateaux that harvested later had to contend with rain from 2-5 October.
2015 is an excellent vintage but unlike other top vintages in 2000, 2005, 2009 and 2010, the harvest brought plenty of anxiety for many growers over when to pick.
The vines and bunches looked extremely healthy at harvest time, with no rot on the reds to eliminate.
A very good vintage is supported by generally good yields on the reds, but lower yields on the whites.
It’s useful to note the lack of rain each month – and the reverse in August – and how sunny it was in June and July as the grapes formed.
Between April and October, 2015 was drier (375mm) than the 30 year average (497mm) and the four previous years. Compare this with the top vintages of 2005, 2009 and 2010.
It’s probably useful to show what was happening in the vineyard between April and October. This was the same block of Merlot, with Pavie our Jack Russell for scale. You can see how dry it was, especially in late May and at the end of July, then how green it was in August and, importantly, dry again in September for the ripening.
Here is a week-by-week summary, combining figures from 8 sub-regions divided into two graphs – April to June, and July to October. You can find each sub-region’s graphs in the appendix.
The production in 2015 of 529 million litres (equivalent to 700 million bottles) was just above 2014 and exactly matched the average of the last 10 years. Red accounts for more than 85% of the total.
Of the appellations most involved in selling ‘en primeur’, 2015 saw the highest yields for some years. Notably Margaux and St-Julien (highest since 2007), St-Estephe (2006), Pauillac (2010) and the large appellation of St Emilion Grand Cru.
The entire surface area and production of these high profile appellations accounts for just 10% of Bordeaux. The en primeur campaign is largely concentrated around these areas but there’ll be quality and value elsewhere as well – as and when the wines become available.
To download the full report, with additional charts in the appendix, please click here.
The Liv-ex Bordeaux 2015 Price Guide arrived in the office – fresh off the print – this afternoon.
The 100-page printed document has been produced for Liv-ex members to help support decision making throughout the campaign.
The Price Guide presents the evidence as it appears in the data at Liv-ex’s disposal. This has been gathered from chateaux, negociants, the international trade and of course the exchange itself. The report includes:
An overview of the performance of Bordeaux wines in the international market
The price evolution of the last ten En Primeur campaigns
The market outlook for the 2015 vintage
Analysis of price performance, score and supply for 70 leading Bordeaux chateaux
Price analysis online: available to all
Throughout the campaign, Liv-ex will be publishing price analysis – available to all – here on the blog, and sharing information about new releases on Twitter. Analysis will focus on comparisons with previous vintages already in the market, as below.
In addition to price points, scores from key critics will be available through the Liv-ex Bordeaux 2015 web pages, which will be live within the next week.