A Regional Look at Bordeaux

By Chris Hoel

When I think of the wines of Bordeaux, the luxury chateaus with rich histories that go all the way back to the famous British & Dutch financiers that built region wealth many centuries ago come to mind. While the region has had an unbelievable growth rate in prices over the last two decades, it isn’t impervious to climate variations and market fluctuations.

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While prices have nearly tripled for top estates since the great 2000 vintage (largely driven by an overly enthusiastic Far East market), prices are now settling. The massive new wealth in the markets of China, Japan & Hong Kong has driven prices to unpresented and unfathomable levels at retailers and auction houses across the globe. The biggest driving force came at the beginning of 2008 when Hong Kong eliminated the “duty” paid on imported wines. Imposed in 2002, it had been as high as an 80% duty. After the elimination in 2008, the Bordeaux market went crazy and Chateau Lafite-Rothschild, among others, wasted no time in helping to educate the Hong Kong population of Bordeaux and their wines. This explosion caused the number one consumer of Bordeaux, the US, to lose its crown to China which it still holds a firm grasp on.

I mention this background as it helps put into focus the more salient issue of pricing, the “En Primeur” system and its releases. This futures market (aka En Primeur) was established to allow collectors the ability to ensure access to wines they really want, typically at a discount for forking up their money early. However, recently with vintages like 2011 and 2013, collectors found themselves holding the bag as several wines were more expensive after the wines were released than when issued En Primeur. But, like any rollercoaster, what goes up must come down. Many Chateaus are starting to leave the En Primeur process in search of their own distribution channels or holding back significant amounts of stock to retain the scarcity needed to keep prices in line with the last vintage. It’s sort of a catch-22 they got themselves into. At this point most would surmise that prices are artificially high and will face a major downturn if the biggest supporting markets in the Far East decide they like Burgundy or Californian wines better. There are many signals that seem to be trending in that direction.

Then there’s the most unpredictable variable of them all--Mother Nature. In 2014, the quality was up from the three previous vintages of 2011-2013, but the quantity was down forcing any price drops over that 3-year period to rise back up to compensate for the shortage. The winter of 2014 provided much needed rainfall, which mostly filled up the water tables after a few years of drought conditions stressing out the vines to unamiable levels. The spring and summer got off to a quick and successful start with flowering and fruit set were even. Then, some late rain in May caused overly humid conditions in the vineyard leading to rot, odium and mildew. This caused the vignerons to do massive de-leafing to open the canopies to improve circulation which overly exposed the fruit to the unforeseen and massive hail that arrived on June 8th. Some parts of the northern Medoc lost as much as 80% of their crop, drastically reducing yields. The remaining months of the summer remained wet and cool and right when everyone’s hopes were to be fully diminished, the dry, warm weather came before harvest virtually saving the vintage from total disaster. September was one of the sunniest, warmest and, most importantly, driest months in 40 years leading into an early October harvest.

At the end of the day, quality was much better than expected and there’s still a ton of value to be had in the mid-range where wine critic scores are above average for a vintage with so many hurdles.

Everything changes for 2015 as it was great in many ways and experienced almost none of the viticulture pressures that 2014 presented. The winter was very cold and rainy, which is desirable to keep any early bud break, flowering at bay, and the water reservoirs filled. Great weather started the season and flowering was nearly perfect, occurring in just two days in some areas on the Right Bank. This is highly desirable for an even fruit set giving the vintage an early level start. Clearly the best vintage since the legendary 2010 vintage, with a dry and warm spring and summer leading into the right amount of rain at the right time towards the end of the season.

The resulting fruit was clean and provided wonderful balanced natural acidities and lush polished tanning. However, this tannin is slightly overshadowed by the perfectly ripe if not a touch riper than normal fruit that is currently very forward in the wine. These wines are very approachable right now and offer a ton of pleasure. The yields are up from 2014, but so are the prices. This is due to the mostly uniform quality across the region, including whites made from Sauvignon Blanc. Semillon-based sweet wines faired the least successful and the typical condition just as prevalent as one would expect for Botrytis to set in a meaningful way. For the most part, you can close your eyes and grab ‘15’s where the only drawback is if you’ll be able to grab two bottles or just one due to the elevated pricing.

2016 was also a successful vintage, but for drastically different reasons that produced great wine with markedly different profiles and structures. The winter was wet and warm which caused the vines to wake up a week or more early, setting the season up for potentially risky damage due to frost. Frost came to France in a horrific way that decimated Eastern France and the Loire Valley, but oddly (and thankfully) spared most of the Bordeaux region. As Spring continued, weather conditions remained wet and cool, surprisingly not causing even fruit set but delaying the fruit set as a whole. This caused Asphyxia in water logged areas of the vineyards in both the Medoc and St. Emilion on the Right Bank.

This all changed at the end of June when the weather turned to straight up hot and very dry, which caused an enormous amount of vine vigor, hinting at increased yields for the season. This was a welcome blessing as the vines were still behind due to the cool and wet weather of the spring. Some sun burning of grapes occurred, but this was rare and didn’t contribute to a quality drop off in the vineyards. However, the hot weather did have negative consequences as acidities began to drop faster than normal during the final stages of ripening, dangerously so, until a batch of welcomed rain in mid-September helped correct any real deficiencies. Some have compared the vintage to 2010, but with lower acidities, or even the great 1990 vintage without the balance between fruit and tannin. The skins were rather thick in ’16 and expect deeply colored wines with firm tannin that will need time to shed in your cellar. Given the big currency fluctuations between the USD Dollar, the British Pound and the Euro, the real question this year is whether it will be the last vintage where UK negociants can guarantee En Primeur pricing will be lower than the release prices later this year.

After the two high quality vintages of ’15 and ’16, the shadow vintage of 2017 had a lot to prove. Early reports indicate that the quality is surprisingly good despite the brutal spring frost. However, there seems to be quite a lot of caution as the vintage is not uniform across the board and one must be prudent of what he or she buys. The frost resulted in an overall loss of nearly 40-45% of the regions’ production which is quite significant. This said, the majority of the classified growths of the Medoc remained largely untouched and unaffected. St. Estephe, St. Julien and Pauillac were the most successful due to their location to the Gironde river to the east.

Vineyards on the right bank suffered much worse and, in some cases, lost 60% of its production due to frost. Those great producers at the top of the plateau on Pomerol faired best like Petrus and Le Pin. The top properties are the top properties not just because they have and can attract top winemakers, but typically they are at elevations that guard them from low-lying moisture that can lead to frost. Not that dissimilar when tornadoes in the Midwest take out trailer parks while missing other areas with more expensive homes, it’s all about location. Those with even slightly higher elevations were completely untouched by the super damaging frost, which the region hasn’t seen since 1991.

As this article is being written, the wine critics and connoisseurs alike are in Bordeaux tasting through the most recent vintage while they are still in barrel and offer our first real glimpse into the vintage. We will all be on bated breath to see what shakes up in the end and while some producers will do quite well, it’s those who didn’t that will make the headlines quicker and be of utmost importance. There will also be all eyes on the pricing that will soon follow and whether or not the En Primeur system is dead. What the release prices are and how much stock will be made available will dictate that judgement and ultimately be the deciding factor for a system that has become antiquated in the information age that we live in today. The reach and networks of DTC (Direct to Consumer) systems via the internet and prominent retailers across the globe could easily upend the futures market, especially as Chateaux decides to bring distribution under their own roofs and capture the additional margin applied by courtiers. This isn’t an uncommon practice today in other wine regions like California and Italy. This modern distribution process will ultimately cut out at least one of many middle men that exist in the excruciatingly complicated process of a bottle leaving the Chateau and making its way to your cellar. Expectations are high and the future of Bordeaux may lay in the balance.