http://www.nytimes.com/2009/03/31/busin ... f=business
The last sentence is a killer.
You'll notice how much the article once again focuses on money, the economic crisis, physchological factors, etc. etc. and so very little on the wine itself.
Best regards,
Alex R.
NY TImes article on 2008 Bordeaux
Re: NY TImes article on 2008 Bordeaux
Good article. I think it is perfectly reasonable to focus on prices. We are in an economic crisis. My biggest consulting client just went under yesterday. I still have my medical practice, but it will put a big dent in the wine budget. I'm sure I'm not the only one. And at this stage of the game, the reality of how the '08 Bordeaux will turn out once in bottle or mature is probably no more predictable than next year's economy.
Here is the last couple of sentences that Alex mentions - a quote from Angelique de Lencquesaing of iDealWine (perhaps related to May-Eliane of Pichon Lalande?). It's a good one:
“In England and other countries people have a view of wine as a financial product that can go up or down in value,” she said. “In France, wine is sacred.”
Great sentiment. But the cynic in me is wondering what Angelique was really thinking, and what was edited out. I can't help thinking that the quote really should have been: “In England and other countries people have a view of wine as a financial product that can go up or down in value,” she said. “In France, wine is sacred - it always goes up in value."
Here is the last couple of sentences that Alex mentions - a quote from Angelique de Lencquesaing of iDealWine (perhaps related to May-Eliane of Pichon Lalande?). It's a good one:
“In England and other countries people have a view of wine as a financial product that can go up or down in value,” she said. “In France, wine is sacred.”
Great sentiment. But the cynic in me is wondering what Angelique was really thinking, and what was edited out. I can't help thinking that the quote really should have been: “In England and other countries people have a view of wine as a financial product that can go up or down in value,” she said. “In France, wine is sacred - it always goes up in value."
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Chasse-Spleen
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Re: NY TImes article on 2008 Bordeaux
I think there's a lot of interest in the article. It is in the business section, and the Times tends to focus on upper level finance, so they're not talking about Chateau La Cardonne, not even Chateau Plince ;0) But one of the things that struck me and that's a factor is that the wines are not an immediately perishable product, and that's how the big chateaux are able to play such hardball on prices. As it says in the article, they can hold the wines for 10 years if they want to. They're a bit like untouchable royalty who are sitting on priceless real estate. Not a bad position to be in.
-Chasse
PS. At the wine/liquor store across the street from me in SoHo this afternoon, I saw a bottle of '00 Petrus sitting up on the shelf, a chain around its neck but not temp controlled in any way. The price? $4,000. I think they're serious.
-Chasse
PS. At the wine/liquor store across the street from me in SoHo this afternoon, I saw a bottle of '00 Petrus sitting up on the shelf, a chain around its neck but not temp controlled in any way. The price? $4,000. I think they're serious.
Re: NY TImes article on 2008 Bordeaux
Do I hear "Let them drink OZ." ringing in my ears?? Off with their heads!
Re: NY TImes article on 2008 Bordeaux
Chris,
Sitting on the wines is indeed a possibility, but it's a very risky game to play.
I asked Monsieur Chevalier of Ch. Lafite about this on Tuesday. He said that Eric de Rothschild took over management in 1974, at the worst possible time. He was hardly able to sell any wine for three years (this is the one and only true Bordeaux wine crisis in my lifetime) and this left an indelible memory.
M. Chevalier said that they never keep back more than, let's say, 15% of the crop.
And that's Lafite - just think of the challenge to the others!
Also, from time to time you read that the bottle sold at 300 dollars costs 14 dollars to produce...
I do not think this is true. The finest châteaux lavish an inordinate amount of care and attention, and have a different type of infrastructure than a minor château.
Last, but not least, each wine estate is like a company. They have to finance investments (those state-of-the-art cellars are not paid outright, cash on the line...), repay debts, pay an army of workers, etc.
In short, a bird in the hand is worth two in the bush. When faced with the prospect of sitting on millions of euros worth of wine because you *might* be able to sell it at a much higher price in 2 or 3 years or receving a lower price upfront long before the wine is even bottled, I predict that almost everyone will choose the latter option.
Tradition weighs in heavy here too. That "things have always been done like that" is not to be scoffed at. It's the way the wine has been bought and sold for many years.
Those châteaux that decide to go their own way are truly taking an enormous risk.
It reminds me of châteaux like Giscours that fell flat on their face because they wanted to control distribution. Heck, even Mouton Rothschild sells to all the négociants, despite possessing their own powerful négociant firm.
The distribution networks are currently clogged with several vintages in the pipeline qualified as uninteresting by the media. However, there is no more market-oriented product in the world than the great growths of Bordeaux. Château owners will react as they always have. Sure, it's harder to react *downward*, but everyone knows this must happen. If the "first tranche" prices don't work, well, they'll lower the prices further still, because they have too.
Alain Vauthier of Ch. Ausone told me: "I'm not worried. I don't set the price of my wine. The brokers tell me what it should be sold for".
Not forgetting, however, the allocation game, whereby you have to buy into the so-so year to keep your place in wine for the good year.
Best regards,
Alex R.
Sitting on the wines is indeed a possibility, but it's a very risky game to play.
I asked Monsieur Chevalier of Ch. Lafite about this on Tuesday. He said that Eric de Rothschild took over management in 1974, at the worst possible time. He was hardly able to sell any wine for three years (this is the one and only true Bordeaux wine crisis in my lifetime) and this left an indelible memory.
M. Chevalier said that they never keep back more than, let's say, 15% of the crop.
And that's Lafite - just think of the challenge to the others!
Also, from time to time you read that the bottle sold at 300 dollars costs 14 dollars to produce...
I do not think this is true. The finest châteaux lavish an inordinate amount of care and attention, and have a different type of infrastructure than a minor château.
Last, but not least, each wine estate is like a company. They have to finance investments (those state-of-the-art cellars are not paid outright, cash on the line...), repay debts, pay an army of workers, etc.
In short, a bird in the hand is worth two in the bush. When faced with the prospect of sitting on millions of euros worth of wine because you *might* be able to sell it at a much higher price in 2 or 3 years or receving a lower price upfront long before the wine is even bottled, I predict that almost everyone will choose the latter option.
Tradition weighs in heavy here too. That "things have always been done like that" is not to be scoffed at. It's the way the wine has been bought and sold for many years.
Those châteaux that decide to go their own way are truly taking an enormous risk.
It reminds me of châteaux like Giscours that fell flat on their face because they wanted to control distribution. Heck, even Mouton Rothschild sells to all the négociants, despite possessing their own powerful négociant firm.
The distribution networks are currently clogged with several vintages in the pipeline qualified as uninteresting by the media. However, there is no more market-oriented product in the world than the great growths of Bordeaux. Château owners will react as they always have. Sure, it's harder to react *downward*, but everyone knows this must happen. If the "first tranche" prices don't work, well, they'll lower the prices further still, because they have too.
Alain Vauthier of Ch. Ausone told me: "I'm not worried. I don't set the price of my wine. The brokers tell me what it should be sold for".
Not forgetting, however, the allocation game, whereby you have to buy into the so-so year to keep your place in wine for the good year.
Best regards,
Alex R.
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Chasse-Spleen
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Re: NY TImes article on 2008 Bordeaux
Alex,
I believe everything you say and truthfully, I'm really exagerating when I say 10 years. But I do think it's true that a bottle of Lafite say, does not lose value as it grows older, no matter who is holding onto it, we all know this. It's an incredibly complex pricing strategy they work with. I haven't looked at the numbers currently on 2000, but it takes big cujones or shall we say chuztpah to sell say, 2005 1st growths at twice the price of 2000 1sts, only five years later when everyone knows that the 2000s are better. But in 10 years, everything will even out. They'll get their (or somebody will) $2000 a bottle (or much more) for that '05 1st growth.
Believe me, I'm as perplexed as the next guy who isn't a wine professional. But I would like to add an interesting anecdote. A guitar student of mine is the wine director at a very famous NYC French restaurant. I asked him today if he thought 2000 is better than 2005. He answered unequivocally, yes. But he added, they have to sell the 2005s.
I really do wonder, finally, what will happen to all the '06, '07 and '08 Bordeaux that will fall like rain on the marketplace eventually. I hope we are the beneficiaries.
-Chasse (still under $50 a bottle)
I believe everything you say and truthfully, I'm really exagerating when I say 10 years. But I do think it's true that a bottle of Lafite say, does not lose value as it grows older, no matter who is holding onto it, we all know this. It's an incredibly complex pricing strategy they work with. I haven't looked at the numbers currently on 2000, but it takes big cujones or shall we say chuztpah to sell say, 2005 1st growths at twice the price of 2000 1sts, only five years later when everyone knows that the 2000s are better. But in 10 years, everything will even out. They'll get their (or somebody will) $2000 a bottle (or much more) for that '05 1st growth.
Believe me, I'm as perplexed as the next guy who isn't a wine professional. But I would like to add an interesting anecdote. A guitar student of mine is the wine director at a very famous NYC French restaurant. I asked him today if he thought 2000 is better than 2005. He answered unequivocally, yes. But he added, they have to sell the 2005s.
I really do wonder, finally, what will happen to all the '06, '07 and '08 Bordeaux that will fall like rain on the marketplace eventually. I hope we are the beneficiaries.
-Chasse (still under $50 a bottle)
Re: NY TImes article on 2008 Bordeaux
Chris,
It is certain that there are psychological (read: irrational) as well as economic factors in play here.
One of these is the "thrill of the hunt", the fact of getting in on the ground floor.
Let's not forget too that there are up and coming generations of wine consumers, who perhaps weren't buying the 2000s, as well as loads of people getting married or having babies in 2005. For them, a great vintage from a benchmark year is of great interest.
I'm not sure that Lafite in any vintage gains value... Look at 2007 Lafite. I'm willing to bet that it will be sold at a knock-down price, i.e. under purchase price in many of the world's wine shops.
In the long term, Lafite from a good vintage probably won't go down in price. However, you may need to sit on it for a very long time...
2000 vs 2005? I'm sure there will be tastings down the line will give us a better idea of where these vintages stand.
It is too early to say now IMHO.
You ask about the '06, '07 and '08 Bordeaux. I think there may well be a shakeout, i.e. fire sales, particularly in vintage-sensitive markets like the US.
All the best,
Alex
It is certain that there are psychological (read: irrational) as well as economic factors in play here.
One of these is the "thrill of the hunt", the fact of getting in on the ground floor.
Let's not forget too that there are up and coming generations of wine consumers, who perhaps weren't buying the 2000s, as well as loads of people getting married or having babies in 2005. For them, a great vintage from a benchmark year is of great interest.
I'm not sure that Lafite in any vintage gains value... Look at 2007 Lafite. I'm willing to bet that it will be sold at a knock-down price, i.e. under purchase price in many of the world's wine shops.
In the long term, Lafite from a good vintage probably won't go down in price. However, you may need to sit on it for a very long time...
2000 vs 2005? I'm sure there will be tastings down the line will give us a better idea of where these vintages stand.
It is too early to say now IMHO.
You ask about the '06, '07 and '08 Bordeaux. I think there may well be a shakeout, i.e. fire sales, particularly in vintage-sensitive markets like the US.
All the best,
Alex
Re: NY TImes article on 2008 Bordeaux
I guess my question is, is the new generation of US wine drinker going to go after Bordeaux? When I was just getting into wine (well after the Ruinite and Blue Nun phase), Bordeaux was the place. There were certianly people into Burgundy, California was up and coming and getting interesting, but Bordeuax still captured the hearts and minds of the people that wanted to drink great red wine.AlexR wrote:
Let's not forget too that there are up and coming generations of wine consumers, who perhaps weren't buying the 2000s, as well as loads of people getting married or having babies in 2005. For them, a great vintage from a benchmark year is of great interest.
It's thirty years later, and I just don't see the younger crowd buying/drinking Bordeaux like we did. I'm not talking just about the 20 something crowd, I'm talking about the people in their late 20s and 30s that have disposable income and are starting cellars. They will certainly lay out $200-$300 to splurge on a top California wine from a good vintage, but they see the price tag of a top Bordeaux in a good vintage and can't justify the 2x-4x increase in price.
Is Bordeaux (as a group) pricing the young US wine drinker out and letting California train the taste buds of the next generation of US wine drinker? Based on my experience, I would say yes, but that's just in my one small corner of the world.
Andy
Re: NY TImes article on 2008 Bordeaux
Hi Andy,
Living in the US, you are, of course, far more aware of market trends than I am.
All I know is the figures, and the most recent ones say that the US is the second largest customer in terms of value.
So somebody's buying the stuff!
However, the US is a market where the great growths play a predominant role, and these are experiencing pricing issues all around the world at present.
My answer to you post is to point out that there are some simply wonderful wines in Bordeaux in the non-cru-classé category.
In my opinion, Bordeaux represents better value for money than California, although I'm ready to be challenged on this
.
Even so, I'm the first to admit that these "minor" Bordeaux are harder to get a handle on: importers don't bring them in, and that they're more challenging to get to know.
Still, the price rise may be an impetus to distributing thse wines more widely.
I think that there will always be a market for classic Bordeaux, even if it''s a lot harder to relate to than a wine that has just a grape variety and a producer's name rather
than some unpronouncable foreign name and a vintage year whose quality varies much more than in the Golden State.
All the best,
Alex R.
Living in the US, you are, of course, far more aware of market trends than I am.
All I know is the figures, and the most recent ones say that the US is the second largest customer in terms of value.
So somebody's buying the stuff!
However, the US is a market where the great growths play a predominant role, and these are experiencing pricing issues all around the world at present.
My answer to you post is to point out that there are some simply wonderful wines in Bordeaux in the non-cru-classé category.
In my opinion, Bordeaux represents better value for money than California, although I'm ready to be challenged on this
.Even so, I'm the first to admit that these "minor" Bordeaux are harder to get a handle on: importers don't bring them in, and that they're more challenging to get to know.
Still, the price rise may be an impetus to distributing thse wines more widely.
I think that there will always be a market for classic Bordeaux, even if it''s a lot harder to relate to than a wine that has just a grape variety and a producer's name rather
than some unpronouncable foreign name and a vintage year whose quality varies much more than in the Golden State.
All the best,
Alex R.
Re: NY TImes article on 2008 Bordeaux
I wouldn't go that far... It's just the younger people I drink with don't even talk much about Bordeaux. They may enjoy it when someone opens a bottle, but they are much more into Cali Cult and mailing list wines and have very little Bordeaux in the cellar. Again, this is just my small corner of the world, but it makes me wonder.AlexR wrote: Living in the US, you are, of course, far more aware of market trends than I am.
Yes, people are still buying it, but I think it's mostly those of us that grew up on Bordeaux not really the next generation. When new Bordeaux hits the shelves around here, the crowd gathering is generally mid forties and up. I'm not saying my experience is indicitive of everyone elses', which is why I asked the question. Is this what other's are seeing or are they seeing the younger US wine drinkers buying a lot of Bordeaux? Of course, there are exceptions but as a general trend. Or maybe the better questions is, what percentage of younger US drinkers are buying Bordeaux and how does that compare to your experiences 15-20 years ago?AlexR wrote: All I know is the figures, and the most recent ones say that the US is the second largest customer in terms of value.
So somebody's buying the stuff! .
You won't get a challange from me. In the $15 - $50 range, in general, I'll take a Bordeaux. The problem is with the prestige wines. You can't get "the best" wines from a great vintages (whatever that means, but it's about perception, not reality) from Bordeaux without mortaging the house. You can from California and the people I drink with regularly that are "the next generation" are going with California. That's shaping their tastes in what is considered a great wine.AlexR wrote: My answer to you post is to point out that there are some simply wonderful wines in Bordeaux in the non-cru-classé category.
In my opinion, Bordeaux represents better value for money than California, although I'm ready to be challenged on this
I don't buy the foreign name or vintage thing. Sure that's difficult for a real newbie, but these guys (and gilrs) recognize that names and vintages are supposed to be good (they read Parker) it's that they want to splurge and try the "best" once in a while. At $1200 a bottle for the "best" Bordeaux, they are looking elsewhere. To California mostly, because as we all know that Cali wines beat Bordeaux in blind tastings anyway, so they must be betterAlexR wrote: I think that there will always be a market for classic Bordeaux, even if it''s a lot harder to relate to than a wine that has just a grape variety and a producer's name rather than some unpronouncable foreign name and a vintage year whose quality varies much more than in the Golden State.
And to you.AlexR wrote: All the best,
Alex R.
Andy
Re: NY TImes article on 2008 Bordeaux
Andy,
Interesting post.
I share your doubt about young people and Bordeaux. I don't have the slightest idea!
There are apparently *two* films about to be released about the so-called "Judgement of Paris" in 1976.
I believe at least one of them is out already in the States.
I think the answer to the future of Bordeaux in the States among younger drinkers depends on a variety of factors:
- the exchange rate
- a new generation of importers that is willing to get behind wines that are not "pre-sold"
- the future of wine criticism when Parker retires
- the promotional efforts made by the Bordelais
- the cost of good California wines
- whether or not Australian wines will lose popularity
- to name just a few
All the best,
Alex
Interesting post.
I share your doubt about young people and Bordeaux. I don't have the slightest idea!
There are apparently *two* films about to be released about the so-called "Judgement of Paris" in 1976.
I believe at least one of them is out already in the States.
I think the answer to the future of Bordeaux in the States among younger drinkers depends on a variety of factors:
- the exchange rate
- a new generation of importers that is willing to get behind wines that are not "pre-sold"
- the future of wine criticism when Parker retires
- the promotional efforts made by the Bordelais
- the cost of good California wines
- whether or not Australian wines will lose popularity
- to name just a few
All the best,
Alex
Re: NY TImes article on 2008 Bordeaux
Quick note to say that the blog from the en primeur tastings posted by Berry Bros in UK (never usually averse to whipping up interest in a new en primeur campaign) says firmly that 08 is not as good as 04 or 06 but better than 07. Wonder if their official website will say the same when / if they start trying to sell the wines!
Richard
Richard
Re: NY TImes article on 2008 Bordeaux
as you consider demographics
there is research showing that peak wine buying age is mid 50s
The peak baby boomers are 49yr old this year thus the peak is still growing on wine spend
However these stats may not be as predictable in the midst of a rather serious recession/depression
especially if the stimulus does not work and the boomers do not start spending again and we fall into a worse depression late this year/ or next
Most of us at BWE 09 seemed to be buying a lot less on wine........sure is a more fun drinking the cellar now and appreciating the wine knowing I may never be able to replace the wines at the same level of sprend but lots of high quality wine at reasonable prices
Rick
there is research showing that peak wine buying age is mid 50s
The peak baby boomers are 49yr old this year thus the peak is still growing on wine spend
However these stats may not be as predictable in the midst of a rather serious recession/depression
especially if the stimulus does not work and the boomers do not start spending again and we fall into a worse depression late this year/ or next
Most of us at BWE 09 seemed to be buying a lot less on wine........sure is a more fun drinking the cellar now and appreciating the wine knowing I may never be able to replace the wines at the same level of sprend but lots of high quality wine at reasonable prices
Rick
Re: NY TImes article on 2008 Bordeaux
That is interesting (that peak wine buying age is mid-50s). I must be precocious, because I am hitting the mid-50s and am experiencing a major slowdown in wine purchases. And only partly because of the economy. I've been buying more than I've been drinking for 15+ years, and I have to start reversing that trend.
Re: NY TImes article on 2008 Bordeaux
I'm in my mid-fifties and I'm slowing down too.
Factors:
- I need the money for major work on the house (building an extension)
- Fine Bordeaux takes 20 and 30 years to age as the BWE weekend shows. That'd put me in my late 70s
- Neither of my children are particularly interested in fine wine
- You can't take it with you - I would like to drink what I have before I kick the bucket.
Yours truly,
Alex R.
Factors:
- I need the money for major work on the house (building an extension)
- Fine Bordeaux takes 20 and 30 years to age as the BWE weekend shows. That'd put me in my late 70s
- Neither of my children are particularly interested in fine wine
- You can't take it with you - I would like to drink what I have before I kick the bucket.
Yours truly,
Alex R.
Re: NY TImes article on 2008 Bordeaux
Alex, you and I have similar personal approaches to this. Others keep accumulating way beyond their means to consume. And still others don't stop buying just because the dont have time to lay the wines down - they just buy older vintages.
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JCNorthway
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Re: NY TImes article on 2008 Bordeaux
Alex's and David's comments are interesting in that I was involved in some similar conversations over the weekend at the BWE convention. I'm even a few years ahead of both Alex and David. My last vintage of buying something more than a sampling was 2000. I bought a couple of cases of 2003 Pontet Canet based on BWE recommendations, and I also bought a case of 2005 Pontet Canet as my swan song in futures purchases. I'm betting (and hoping) that my current collection - mostly from 95, 96, 98, and 00, and supplemented by my continuing purchases of Burgundy, Rhone and Italian - will last me until I am ready to go to that great vineyard in the sky. If not, I imagine I will just have to buy inexpensive Bordeaux bottlings to tide me over. But my goal is to not leave any behind since there is really no one in the family with the interest.
Jon
Jon
Re: NY TImes article on 2008 Bordeaux
Jon, I'm probably not that far behind you. My swan song for ageable Bordeaux was the '05 vintage, and I suspect my swan song for CduP will be '07.
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