Market insight


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Why is Piedmont the region to keep your eye on in the coming years?

by Wine Owners

Posted on 2016-09-30


We are currently in the midst of a renaissance in both interest and prices in a little known wine growing corner of France called Bordeaux. Having languished in the doldrums since mid-2011 the last 12 months has seen a resurgence of the pre-eminent fine wine producing region. Although still way short of the peaks of May 2011, prices are steadily rising, and a stellar 2015 vintage has breathed life into a moribund en primeur system. It is still some way from leaving the hospital, but at least ‘La Place’ is now out of intensive care. You may have noticed that our introduction to a piece purportedly about Piedmont has focused squarely on Bordeaux. There is a design behind this geographical madness, we assure you.

As Bordeaux has once again become flavour of the month (year?) it seems that Super-Tuscans have suffered by comparison. This is, of course, the equal and opposite reaction to the increase in interest in Super-Tuscans in the period mid-2011 to December 2014, when Tig, Sass, Masseto et al moved ahead in pricing terms as Bordeaux buyers looked for high quality wines in sufficient quantities, and with sufficient liquidity, to adequately substitute in…

(Again, where is Piedmont is all this?)

Bear with us.

The point here is that Bordeaux and Tuscany appear to have a pricing relationship based on the similarity of styles, and a similarity of production levels. They are yin and yang, and if the focus is on Bordeaux, then logically it follows there is an absence of focus on Tuscany.

So, the scene is set; now on to Piedmont. Where the Super-Tuscans are Johnny come latelies, deliberately combining the traditional virtues of Sangiovese with alien plantings like Cab Sav, Merlot and Cab Franc, the best wines of Piedmont – and we're thinking, naturally, of Barolo in particular – are a bastion of hundreds of years of mono-varietal wine making, where Nebbiolo is revered as King to the exclusion of all others. Many wine lovers would agree that the best wines of Barolo, from producers such as Conterno, Rinaldi, Giacosa et al, are a match for anything made in France in terms of complexity, balance, ageing potential and sheer quality. If, as seems to be the case, Tuscan wines are perceived as an alternative to Bordeaux, then it stands to reason Piedmont is a natural counterpoint to Burgundy. Single dominant varietal? Check. Small average production levels per producer? Check. Passionate following by hardcore wine lovers? Check. Both regions have even undergone similar improvements in quality control, with Burgundy improving through the 80s and Barolo a little later, through the 90s. But…stratospherically high prices for the best producers? We're afraid the comparison falls down on this point.

Even the best producers in Barolo can be bought for a fraction of the prices paid for DRC, Leroy, Rousseau or Roumier. Certainly they aren’t cheap, but the huge increases in values that have been seen in the Bourgogne haven’t been replicated in Barolo. But things might be beginning to change. Interest in a broader array of regions by increasingly well-educated global wine buyers has opened doors into markets that didn’t exist a decade ago. Slowly, but with gradually increasing speed, these top Piedmont wines are attracting attention, and if (as many commentators believe) Burgundy prices may beginning to slow, plateau or even fall, then there is every chance that the relationship between Tuscany and Bordeaux may be mirrored by the Burgundy and Piedmont regions. Long term buyers of Burgundy, looking for value, could well switch attention to new areas, and thereby reduce exposure to Burgundy. Piedmont could well be the major beneficiary of any such move…


The nature/nurture debate

by Wine Owners

Posted on 2016-09-20


There is a central theme within psychology that is concerned with the extent to which behaviour is a product of either inherited (i.e. genetic) or acquired (i.e. learned) characteristics. It seeks to explain how much of a person’s character, personality and behaviour can be attributed purely to evolutionary biology, and how important environmental factors such as education, parenting styles, social status and geographical location are in defining an individual.

There are those who come under the term nativists who believe that genetic characteristics are pre-eminent, and that to a large extent there is genetic ‘pre-wiring’ that is the foundation of all behaviour. On the other hand, there is school of thought labelled behaviourism that suggests humans are a ‘blank slate’ upon which anything can be written.

Anyway, enough of the psychobabble. What has this got to do with wine? The analogy will I am sure be obvious to many of you. All you need do is replace ‘nature’ with ‘terroir’, and ‘nurture’ with ‘winemaker’.

In the 80s and 90s there was a well-documented move towards the winemaker being paramount, particularly prevalent in the New World. This ‘Cult of the Winemaker’ phenomenon, exemplified by such luminaries as Michel Rolland meant that certain styles of wine could be created via specific cellar techniques, which lessened the importance of the raw ingredients and ‘terroir’. This move also coincided with the rise of the superstar wine critics such as Robert Parker whose commentaries not only reflected their tastes and inclinations, but also helped shape the style of wines being made. Even if the effects of ‘Parkerization’ are debatable, the mere fact that the word itself exists suggests an impact of sorts. If nurture, in the guise of the Winemaker and the Critic, were the focus of the final decades of the previous decade, it seems that nature has been making a comeback in this millennium.

Biodynamic techniques, natural wines, and a pointed re-focussing on allowing the land to speak for itself seem to have come back into vogue. Arguably, it is the improvements in cellar technology and techniques introduced by modern Winemakers that have allowed producers to once again champion the primacy of their soil and vines in characterising their wines. Certainly there is a very real sense that individuality is the current keyword for winemakers, and that the best wines being made today have nature rather than nurture as their heartbeat.

The very best wines have always been the expression of their terroir, and it is this link to the land that had made generation after generation fall in love with particular wines. The fact that a vineyard a few hundred yards up the slope from another, or just along the road from another, can produce a wine that is distinct and unique from its neighbour is one of the most fascinating aspects of wine making, and the root of much that intrigues us. Increasingly it is the role of the winemaker to allow this land to express itself eloquently with minimal intervention. The true mark of a great winemaker is now seen as how they can allow the terroir to shine through, rather than how distinctive their ‘signature’ wine making style is.

In recent years there has been a growing consensus within the world of academic psychology that we are now in a post Nature v Nurture world – that no further intellectual currency can be gained by debating a polarised topic when the answer is clearly an amalgam of the two. The interaction and ‘feedback loops’ between the two positions mean that it is a fool’s errand to work out which is more important when it comes to explaining behaviour, and in the world of wine I suspect the same story will play out.

Great wines need both great raw products and great winemakers to help them realise their full potential. To suggest that great wines can be made from average grapes is clearly illogical. Equally, it is unreasonable to think that average winemakers can turn an incredible crop into incredible wines.

History suggests that there are certain plots of land where alchemy can happen. It also shows that there are certain people who can, through talent, hard work and a drop of genius make the products of this land into elixirs. You cannot speak of Montrachet, Hermitage and Cote Rotie without mention of Leflaive, Chave and Guigal.

We do feel in our bones that as wine is the product of an agricultural process, one should accept that what goes on in the field is the number one priority for any producer. But you’d better have a great cellar and great people in it if you want to make magic…



Firsts on fire

by Wine Owners

Posted on 2016-09-12


The WO First Growth Index showed price appreciation over the last 12 months pushed through the 20% threshold last week.


Haut Brion’s emergence as a wine that can now rivals its peers in the secondary market is clear, with 4 vintages in the top 10 movers, namely 2000, 2003, 2006 and 2008. Will we see Haut Brion close the gap where historically it would have sold at a discount to the other Firsts? The data seems to support the likelihood of this happening.

The top 10 movers have risen 23%-32% in the last year. Furthermore there has been just one faller out of the 75 constituents of the WO First Growth Index, namely Latour 2005.


Top 10 movers over the last 12 months

Chateau Margaux Premier Grand Cru Classe

2010

Chateau Lafite Rothschild Pauillac Premier Grand Cru Classe

2010

Chateau Mouton Rothschild Pauillac Premier Grand Cru Classe

2010

Chateau Haut-Brion Pessac-Léognan Premier Grand Cru Classe

2010

Chateau Latour Pauillac Premier Grand Cru Classe

2010

Chateau Margaux Premier Grand Cru Classe

2009

Chateau Mouton Rothschild Pauillac Premier Grand Cru Classe

2009

Chateau Haut-Brion Pessac-Leognan Premier Grand Cru Classe

2009

Chateau Latour Pauillac Premier Grand Cru Classe

2009

Chateau Lafite Rothschild Pauillac Premier Grand Cru Classe

2009


For the first time in years, we see a wine from the twin peaks of 2009 and 2010 in the top 10 movers, in the shape of the exceptional Margaux 2010. Scores from Robert Parker, Neal Martin and Stephen Tanzer oscillate in the 96-99 range, but the market is indicating it thinks that this could be a perfect wine. It’s now caught up with Haut Brion and Lafite at circa £540 per bottle.





Latour’s withdrawal from the en primeur business looks like paying dividends. Although the 2010’s value is far out in front of the field at £845 a bottle, it’s still not broken through it’s retail en primeur opening offer price of £950. Nevertheless it has performed well through the worst of the Bordeaux market’s 3-4 year slide, losing just 26% of its value by November 2015 before recovering, quite a decent performance compared with Lafite considering their similarly high release prices.

Can the Firsts continue this powerful recovery? Can they recapture the heights of their 2009 and 2010 release prices? If, so which will be the first ‘First’ to do so?

Wine

Year

% change

Current price £

Release £

Variance £

Chateau Margaux Premier Grand Cru Classé

2010

27.21

544.89

667

-123

Chateau Lafite Rothschild Pauillac Premier Grand Cru Classé

2010

18

540.85

983

-443

Chateau Mouton Rothschild Pauillac Premier Grand Cru Classé

2010

15.92

473.33

667

-194

Chateau Haut-Brion Pessac-Léognan Premier Grand Cru Classé

2010

14.46

543.7

667

-124

Chateau Latour Pauillac Premier Grand Cru Classé

2010

12.77

845.99

950

-105

Chateau Margaux Premier Grand Cru Classé

2009

19.71

538.68

808

-270

Chateau Mouton Rothschild Pauillac Premier Grand Cru Classé

2009

14.8

454.6

708

-254

Chateau Haut-Brion Pessac-Léognan Premier Grand Cru Classé

2009

12.71

507.21

708

-201

Chateau Latour Pauillac Premier Grand Cru Classé

2009

10.13

780.1

892

-112

Chateau Lafite Rothschild Pauillac Premier Grand Cru Classé

2009

7.58

560.32

1000

-440

Least likely is Lafite, whose 2010 release price of £983 per bottle reflects a moment in time when Lafite was practically a Chinese barter currency, not to mention the 2009’s vertiginous release of £1,000. In each case there is a loss per per bottle of £440 versus en primeur retail.

Most likely to get back to even terms, in order of proximity of current market price vs opening retail offer price, is:

Latour 2010

Latour 2009

Margaux 2010

Haut Brion 2010

Confidence has returned and momentum is driving the market forward. If and when the current price of the above 4 wines exceeds their opening prices, and buyers of 2009 and 2010 First Growths no longer see a sea of red loss/gain percentages in their portfolios, confidence will be given a further boost.


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