by Wine Owners
Posted on 2022-05-20
Just back from the USA where I spent two weeks speaking widely to wine business owners. There are signs of a cooling off in the fine wine market. Even given the buying power a strong dollar confers.
The backdrop is a correcting stock market that’s seen its biggest sell-off since 2020. Unlike 2020, the drivers behind the correction are inflation and the threat of recession. In other words, it’s not driven by a market discontinuity, however persistent Covid proved to be. It’s driven by a fear of market fundamentals turning sour.
As far as blue chip Bordeaux is concerned - as far as collectible fine wine in general is concerned - we don’t yet know the impact of these macro economic factors, nor the impact of a shock to global food security.
But I’d wager there are a fair few highly leveraged buyers, and a lot more feeling considerably poorer than a month or so ago. However immune much of that market may be to cost of living increases, it is not unaffected by sentiment.
The similarities between Spring 2020 and now are striking, albeit the outlook as of early summer 2022 is less positive because it’s harder to look beyond the events that are driving market concerns. Lockdowns drove outsized wine sales. A recession will not have the same effect. A well priced 2019 campaign lit up demand. An overpriced 2021 campaign could douse it.
Meantime arbitrage opportunities in back vintages abound, which is why négoces are busy buying UK stocks and why US fine wine businesses are buyers: but with what intensity and for how long?
by Wine Owners
Posted on 2022-05-18
A long time ago there was a common response to the question "a glass of white wine? What type or style would you like?" That response was "ABC" - anything BUT Chardonnay! Please.
Frequently the affronted sommelier (or smart Alec host) would respond with "how about a nice little Chablis?"
"Oooh, yes please, we love Chablis!"
Oh, how we all laughed!!
The ‘ABC movement’ was brought about by mass market winemakers (and dare I say it, but a hefty percentage from the New World) rather over oaking the pudding. The combination of clumsily used oak, sometimes in floating chip form, a buttery malolactic character and with more residual sugar left in the bottle these heavy, almost sweet, (and obviously oaky) Chardonnays gained mass market popularity. The cognoscenti were appalled and, like anything that becomes over popular, and perhaps regarded as ‘common’, there was an almighty backlash. After all, well made, top class Chardonnays have always been treated to some expensive oak treatment, and when used judiciously, this produces wonderful depth, nuance and flavour.
All of this is very hard to imagine these days and as my colleague Luke argues, ABC should stand for ABSOLUTELY BANGING CHARDONNAY!
I dined with an award winning Australian winemaker last week who makes Chardonnays at every level, represented in, and all the way from, Aldi to Zafferano’s (probably not but I needed a good ‘Z’!). He tells me he simply cannot make enough of the stuff, at every level. Demand is massive. On top of that he runs a wine bar and restaurant in Western Australia for which he bought three pallets of white Burgundy from a local merchant. The same merchant begged him to sell him back some of the Burgundy at a higher price within weeks.
Climate change has led to some well documented problems for Burgundy producers, from frosts to extreme heat, particularly in the most highly prized Cote de Beaune. Winemakers are adapting their skills admirably both in the vines and in the cellars, but there is currently a shortage of fruit and quality wines from this area and obviously prices are rising fast. This is where Chablis comes in! Situated in the north of Burgundy, the slightly cooler climate and without quite the same gamut of superstar names being pursued, other than Dauvissat and Raveneau, wines from here can often be easier to find and possibly represent better value.