Fine wine markets, ageing Baby Boomers, and soft-porn influencers walk into a bar…

While tradition dictates I should prank you with a made-up Château or a spoof EP score, the real market might be pulling enough tricks of its own.

According to our latest In the Mood for Wine survey, most respondents expect the Liv-ex 100 Index to decline slightly in 2025. Bad news, good news, I think—it seems that people think fine wine is finally bottoming out.

The pain may be ending.

Or just beginning?

“The Great Wealth Transfer and the coming fine wine market reckoning” — by Greg Sherwood MW

While we’re still debating whether fine wine has bottomed out, Greg Sherwood MW delivers a gut punch: the pain in the fine wine market may have only just begun.

In “The Great Wealth Transfer and the Coming Fine Wine Reckoning”, Sherwood explores the demographic and economic bomb quietly ticking in bonded warehouses.

Boomers (born 1946–64) and the Silent Generation (1928–45) are expected to pass on $84.4 trillion in assets by 2045—$72.6 trillion directly to heirs. In the UK alone, £5–6 billion of fine wine sits in storage under Boomer ownership.

What happens when the next generation—less sentimental, more liquid—decides to sell?

Implications for investors:

• Market Saturation: Too much supply of certain labels could deflate prices.

• Portfolio Diversification: Investors may shift towards low-volume or emerging region wines.

• Lower Entry Barriers: Falling prices could welcome a new wave of collectors.

Sherwood’s takeaway is that a surge in supply will still pressure wine prices down for a longer period of time.

Latour 2016: The Must-Have Loss

But for now, we are fine.

Several merchants told me their allocations of Latour 2016 sold out in minutes. Clearly, not all of you read our recent piece: “How Much Money Latour Investors Have Lost: A Quick Calculation.”

(And no, I haven’t forgotten all the requests for an Yquem 2022 version. Time will come for that too.)

What followed was a cascade of comments around whether fine wine investing even makes sense.

Here are the most common objections I’ve heard in the past few weeks:

• “Wine is for drinking, not trading.” Treating it like an asset devalues its cultural, emotional, and social significance.

• “Financialisation has pushed prices up.” The more investors pile in, the fewer people can afford to drink it.

• “The logistics are brutal.” Storage, insurance, perishability—none of it screams 'attractive asset'.

• “Access is a joke.” Without allocations, you're just paying inflated prices and eroding your margins.

• “It’s a wasting asset.” Cellars are sunk costs, not investment portfolios.

So, in light of all the criticism against fine wine as an asset class, thank you for giving me the space to write a silly article about the very serious business of wine investing.

EVERYDAY DRINKING

A Question of Taste, A Question of Money

For today’s post, I’m excited to introduce our newest contributor Sara Danese, who writes the excellent In The Mood For Wine, a newsletter focused on investing in wine. In this essay, Sara makes the case for wine as investment. It’s a topic I’ve written about not too long ago …

Read more

a year ago · 25 likes · Sara Danese

Thankfully, there are people like Dr Gertjan Verdickt, Professor of Finance, who spend their time and skills analysing this emerging corner of the investment universe.

In his book, The Passion Portfolio, he draws a fascinating parallel: wine is more like corporate bonds than commodities.

Wine ≠ Art

I read a piece by an art market analyst. I don’t know much about art, but I couldn’t help wondering whether wine investment is similar similar in that way. If investors only buy the big names, are they investing—or just historians?

But while art is fixed—there will only ever be one Picasso—wine is dynamic. First Growths still produce every vintage. Their product evolves. Sometimes it improves. Sometimes it doesn’t.

Despite this, we still remain obsessed with the classics.

Latour 2016 is proof.

Yet, at the same time, Bordeaux’s market share has been shrinking for 15 years. That shift matters. It suggests the market is opening up.

On one side, some investors prefer blue-chip wines. They value low risk and long-term stability. On the other, newer and more involved buyers look to experimental producers. They are searching for asymmetric returns.

As a result, we need to change how we speak about fine wine—diversifying the conversation to reflect what the market is already telling us.

Lessons from my experience in China.

After publishing “What Have the Merchants Ever Done for Us?” on Tim Atkin MW’s site, I was invited by Wine Owners’ CEO Nick Martin to speak at their networking event.

I challenged whether merchants are really adapting to younger drinkers.

My perspective came from launching a wine business in China, where everything—from logistics to marketing—moves at tech speed.

In the UK, wine came first and tech is still catching up. In China, tech came first, and wine had to squeeze into the frame. It’s a different world: fast, transparent, digital-native.

Three lessons that stuck with me:

1. FOMO is not a strategy. TikTok was booming, but our wine campaigns flopped. Alcohol gets penalised in algorithms. Hype ≠ relevance.

2. The best messenger isn’t always who you’d expect. Our most successful partner? A soft-porn fiction writer on WeChat. Her readers trusted her. Loyalty beats credentials.

3. Belonging beats scarcity. We built small WeChat groups to test demand and build trust. When collectors feel like participants, not targets, sales soar.

As the wine world grapples with stagnation, some say the worst:

That wine is dead.
That young people don’t drink it.

But I don’t think wine is dead.

I think it just changed address.

We need a wine industry that’s:
Faster. Braver. Less nostalgic.
More curious. More open.
More connected.

And yes—
one that ships faster!

And on that note…

Congratulations to WineFi for their Crowdfunding!

A massive congrats to Callum Woodcock and the team at WineFi, who just raised over £1 million on Crowdcube from 300+ investors.

A sign that wine investing is alive and well? Maybe.

Proof that younger generations are still excited about wine? Absolutely.

And Finally…

For the 10% of you who speak Italian 🇮🇹: I had the pleasure of being interviewed by Iacopo Valori for Rai3’s FarWest, directed by Salvo Sottile. We talked about fine wine investing, cultural shifts, and what happens when this tradition-bound industry gets shaken up.

Thanks for reading.

Sara Danese

One more thing…

If you like this format and want to contribute, send me any articles or charts you find interesting at sara@inthemoodforwine.com.

Thanks again.

SUPPORT ITMFW

If you appreciate In the Mood for Wine and its mission to help you understand fine wine as an investable asset class, consider becoming a supporter with a paid subscription. You'll unlock exclusive perks, surprises, etc.—while ensuring the free edition remains accessible to all.

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Well, Liv-ex certainly thinks so.

Liv-ex Is Optimistic

Liv-ex reports that the bid:offer spread of the Fine Wine 50 has hit a two-year low, while traded volumes have reached their highest levels since 2021. This indicates greater alignment between buyers and sellers, suggesting increased market confidence because a tight bid-offer spread means that the difference between the highest price a buyer is willing to pay (bid) and the lowest price a seller is willing to accept (offer) is small. Since the start of 2024, the spread has narrowed, dropping below 8% for the first time since mid-2022.

The tighter spread has coincided with a rise in traded volumes. In the first three weeks of February, more Fine Wine 50 components changed hands than in all of January, which itself saw a 33.8% increase over December. If this trend continues, February is set to record the highest trade volumes since July 2021.

In addition, Liv-ex members were surveyed on their outlook for the Fine Wine 100 Index by the end of 2025. On average, respondents predicted a 1.9% decline, with the index expected to close at 320, compared to a 9.1% drop in 2024. This forecast closely aligns with the index’s 2018 peak of 316.

What do In the Mood for Wine readers think? Share your view in the poll below!

“Why fine wine and fancy art have slumped this year?” — The Economist

Luxury assets have had a rough year. We know that. It’s not just wine. While the Liv-ex Fine Wine 1000 shows fine wine prices fell 12% in 2024, according to Art Market Research, investors in art lost an average of 16% in 2024. Diamonds dropped nearly 20%, and collectible cars remained flat.

This downturn follows years of soaring prices, particularly during the pandemic, when high-end goods saw unprecedented demand.

Despite global GDP growth (3.2%), booming stock markets, and a rising ultra-rich population (expected to reach 86 million millionaires by 2027), luxury assets have struggled.

Why?

The Economist highlights two reasons.

Traditional financial assets have offered higher returns. The MSCI World Index is up 17%, Bitcoin has surged 140%, and even short-term Treasuries have delivered 5%+ returns.

Geopolitics has also played a (minor) role. Conflicts in Ukraine and the Middle East, uncertainty over the U.S. election, and fears of trade wars (like Trump’s 2019 25% wine tariffs) have dampened demand. Meanwhile, China’s slowdown—marked by a property crisis and government crackdowns on wealth—has hurt luxury consumption, especially Burgundy wines, whose prices have plunged 30% in two years.

So, if all passion assets have been in decline since 2023, perhaps fine wine’s downturn isn’t a structural issue, but part of a broader interest rate-driven cycle?

Higher interest rates hurt assets with high cost of carry (see here for an explanation), making fine wine less attractive unless producers absorb more of the risk—a shift that will take time.

Demographics could also reshape demand, as younger buyers reject En Primeur, forcing producers to rethink pricing and maturation strategies.

The rise of digital marketplaces will enhance liquidity and price transparency, squeezing intermediary margins and accelerating price discovery. Whether this leads to higher or lower returns remains uncertain, making speculation risky.

Any recovery will likely be slow and volatile, as investors prioritise capital preservation over speculative gains.

Why Invest In Fine Wine? A Forgotten Asset Class — A Presentation To The CFA Madrid

The CFA (Chartered Financial Analyst) designation is one of the most rigorous credentials for investment professionals. It requires passing three six-hour exams covering everything from accounting and ethics to asset classes and portfolio management.

I’ve been a CFA charterholder since 2017, but fine wine was never part of the curriculum.

At CFA Madrid, I had the opportunity to introduce fine wine as an alternative investment, discussing why it deserves attention and how investors can approach it strategically.

Among the things that we discussed, ageability is key. Wine is the only asset that improves over time at no extra cost.

(We also tasted a ‘78 Prado Enea from Bodegas Muga. It was nothing like I expected—proof of the magic of drinking old vintages.)

“The Best of Rioja 2025” Event — by Tim Atkin MW

Rarely does a wine critic take the bold step of organising an event exclusively featuring (what he thinks are) the top bodegas of a vintage—those he has ranked as First, Second, and Third Growths, along with a select group of ‘Rising Stars’—producers he believes are the ones to watch. Most critics steer clear of such rankings, either to avoid backlash from excluded estates or simply to not rock the boat.

But this is Tim Atkin’s tenth, deliberately controversial attempt to classify Rioja’s best producers, loosely inspired by the 1855 Bordeaux Classification. His list ranks wines into five bands of 20 (First to Fifth Growths), plus a group of 100 Crus Bourgeois.

However, there’s a difference, Atkin explains: “Unlike the 1855 Classification, quality is the only criterion I use, although some of my top wines are certainly expensive, too.” He clarifies that “[…]these are my favourite producers, chosen on the basis of tasting and, in most cases, one or more visits to their bodegas. I hope that the selection, which includes a mixture of producers (modern, traditional, large, small, recent and well- established), will again stimulate debate and encourage people to try the best wines that Rioja has to offer.”

Why is it important for the readers of this publication?

Much has been said about the importance of wine scores. Most recently, in “Are Wine Scores a Waste of Time?” questioned their true value for consumers. Originally popularised by Robert Parker’s 100-point system, scores are widely used in the industry but remain subjective, inconsistent, and often misleading.

That said, while I’m also skeptical of most wine scores, I believe a wine critic’s role extends beyond scoring—it’s about guiding both consumers and the trade toward the most exciting wines, producers, regions, and vintages.

That’s why I see Tim Atkin’s classification as invaluable for collectors and investors.

“Bierzo Reborn”, Decanter — by Beth Willard

At a dinner in Madrid, Beth Willard introduced me to José Antonio García’s wines and mentioned that she was writing a Decanter piece on Bierzo, focusing on its quality and its potential to be recognised as one of the world's great terroirs. Aside from being fluent in Spanish and French—and who knows how many other languages—she’s also a great taster and, even better, an opinionated one. And that’s exactly what I like.

Her perspective got me thinking about a question I’m often asked —can fine wine investors look beyond Bordeaux?

Well, I certainly hope so.

Investors and collectors remain largely focused on traditional French regions and winemakers. However, I’ve noticed some smaller, more adventurous merchants starting to push wines from new regions—not just the occasional bottle, but as a concept.

However, it’s crucial that independent, authoritative voices like hers lead the conversation on what constitutes fine wine. Right now, that narrative is largely controlled by merchants and La Place, who remain fixated on pushing the same old Bordeaux names. This leaves collectors with a single, biased perspective—all they hear is Bordeaux, Bordeaux, Bordeaux.

Highlighting new and exciting regions like Bierzo is a step toward diversifying the conversation.

If successful, it could shift attention first among merchants and eventually among consumers. From a investor’s perspective, understanding a region’s wine ageability is key—yet often overlooked. To truly engage serious buyers, showcasing 10+ year-old wines would make a huge difference. It’s one thing to talk about ageability; it’s another to prove it.

And frankly, now is the perfect moment. Bordeaux has alienated investors with En Primeur pricing that, at this point, is nothing short of an insult to their intelligence.

Bolgheri 2022 Vintage Tasting — Organised By & Federico Moccia at 67 Pall Mall

& Federico Moccia hosted a tasting of the latest Bolgheri vintage at 67 Pall Mall.

Talking about Bolgheri 2022 is tricky.

Why?

Because 2019, 2020 and 2021 were such exceptional vintages—widely praised by critics—that now everyone seems eager to dismiss 2022, 2023, and 2024 before even tasting them.

But as always, Pari and Moccia’s motto is taste first, then judge.

“Surprisingly, both Federico Moccia—head sommelier of 67 Pall Mall—and I personally prefer the 2022 vintage to 2021,” says Pari.

“The noses tend to lean towards red fruit, offering plenty of expressiveness, while the palates remain strikingly austere. These are wines built for longevity, easily capable of aging 15 to 20 years. And yet, they come from a challenging year—one that, on paper, shouldn’t have produced wines of this calibre. The first half of the year was marked by rain and frost, while the latter half saw extreme drought. Few would have expected such remarkable results.”

They’re particularly excited to discuss these wines because, in a region often framed as a battle between Sassicaia and Ornellaia, 2022 presents a fascinating shift. Pari mentioned that what started as a top 3 blind tasting of the vintage quickly expanded to a top 14—a testament to the denomination-wide success of 2022. In addition, this year, the stylistic differences between Sassicaia and Ornellaia are not as clear-cut. The old elegance versus power narrative doesn’t apply to 2022. Instead, the region's expressiveness is deepening, with wines speaking more distinctly of their terroir. Ornellaia is evolving towards a character reminiscent of “Léoville-Las Cases of the Mediterranean”, while Sassicaia is embracing an ethereal, forest-floor complexity, a bold response to following up its legendary 2021 vintage—introducing an incredible innovation.

Piastraia deserves special mention. My notes on the 2021 vintage were glowing (see below), but 2022 seems to have delivered something even more compelling.

And Finally… See You In London 👋🏻

For those in London, Wine Owners is hosting an event on 26th March 2025 at Davy’s Wine House in Holborn, and I’m delighted to be joining as a speaker.

I’ll be sharing my experience navigating challenges in the Chinese market and the evolution of consumer behavior. More importantly, I’ll explore how these insights are especially relevant today, as structural shifts reshape the wine market and businesses must adapt to stay ahead.

I hope to see you there—make sure to RSVP here.

Thanks for reading.

Sara Danese

One more thing…

If you like this format and want to contribute, send me any articles or charts you find interesting at sara@inthemoodforwine.com.

Thanks again.

SUPPORT ITMFW

If you appreciate In the Mood for Wine and its mission to help you understand fine wine as an investable asset class, consider becoming a supporter with a paid subscription. You'll unlock exclusive perks, surprises, etc.—while ensuring the free edition remains accessible to all.

Subscribe now

Can’t (or don’t want to) pay for a supporter sub, for any reason whatsoever? Then share it widely!

Share In the mood for wine

A new format to wrap up everything exciting that happened in the world of wine this month.

The end of Dry January

I doubt many of my readers are dedicated Dry Januariers. Or are there?!

Liv-ex Data

Liv-ex hasn’t released its full monthly returns yet (I’ll update them here when they do), but a few interesting charts stand out:

• Bid-to-Offer Ratio at Historic Lows → A (continued) bearish market signal.

• U.S. Buying Power Increasing → Relative to other regions, the U.S. has stepped up its fine wine acquisitions. That makes Trump’s tariff threat yet another blow to the wine trade.

Burgundy 2023 EP

Peter Dean’s The Buyer report n the 2023 Burgundy En Primeur vintage can be summarised as follows:

Great and bountiful vintage, but pricing has left customers perplexed. Again.

Yesterday I got a consumer offer from Lay & Wheeler on a 2023 village Chablis of good repute but why would I want to buy it if I can buy the 2019 for 75% of the price? or buy 2021 cheaper? I’ve tasted this 2023 and it’s well made, classic Chablis but it’s not opening my wallet. You can actually buy a 12 pack of half bottles of the 2019 of a 1er Cru from the same producer for less than half of the 2023 price – and the importer has 360 of these cases still in stock.

So why are prices still high?

Producers justify it by pointing to the catastrophic 2024 harvest, which will severely impact next year’s cash flow.

…and on the topic of Burgundy and En Primeur:

Bouchard Père & Fils withdraws from en primeur

Big changes are happening at Bouchard P&F, as reported by The Drinks Business.

Bouchard Père & Fils is owned by Artémis Domaines, the wine investment arm of François Pinault’s Artémis Group. As part of this restructuring:

• Narrowing Focus → Vineyards in the Côte de Nuits previously under Bouchard’s control will be transferred to Domaine d’Eugénie, another Artémis Domaines property, while Bouchard will now focus solely on its holdings in the Côte de Beaune, refining its portfolio and production strategy.

• No More En Primeur → Starting with the 2023 vintage, Bouchard will no longer participate in En Primeur. Instead, wines will be aged in their cellars and released when ready, with the 2023 vintage set for release in March 2026.

• Ending Négociant Activities → The estate will stop its négociant business, cutting overall production by 60-75% compared to five years ago.

Fine wine investors will face delayed access to Bouchard wines as they will no longer be available EP, reduced availability due to the estate cutting négociant activities and production volumes, and a market shift as Bouchard focuses on estate-grown wines, potentially increasing quality and desirability.

Given the state of En Primeur, I’m not sure investors will mind the delay…

Barolo 2021 Vintage Report

Ahead of the Grandi Langhe, & Federico Moccia released the Barolo del Comune 2021 Vintage Report.

So how was 2021?

“If you love classic Barolo - wines with tension and muscles - you will adore this vintage, but be aware that, compared to its two siblings - the colder 2016 and the more balanced 2019 - this is a warmer spin-off.”

Which Comune Wins?

“For the second consecutive year, Monforte takes the crown as the overall best commune. Its classic traits of forest floor and mushroom with an austere palate remain, now enhanced by an ethereal layer - occasionally amplified where volatile acidity is slightly higher.”

Among Monforte producers, Domenico Clerico and Castello di Perno stand out. Thanks to their transparency, you’ll find a spreadsheet with their tasting notes in the full article.

UK Duty Increase – Effective 1st Feb

Commiserations to all UK-based fine wine collectors with bonded stock.

From 1st February, a new duty regime will base alcohol duty on ABV, leading to higher costs for most wines.

To lock in the lower duty rates, release your wine before 1st Feb.

Might be a good excuse to end Dry January a little early!

Read David Quinney’s excellent breakdown of the new duty rules.

Wine Market – Predictions for 2025 by Simon Farr

Simon Farr is, by any measurable standard, one of the most successful business figures in the wine industry. He has decades of experience in the wine industry, co-founding Bibendum in 1979 and later founding and serving as Chairman of Cru World Wine. He’s also involved with ventures like Wine Owners and Nebbia & Luce, and owns a vineyard in South Africa. His career has spanned wine distribution, trading, and collection management, shaping various aspects of the fine wine market.

In just 12 minutes, he sums up his outlook on the wine market for 2025.

Worth a watch.

A few points:

• The wine market downturn is expected to continue through 2025.

• Is there a ceiling on how much consumers will pay for a bottle of wine?

• The cost of holding wine to maturity may have been underestimated, particularly in En Primeur pricing.

• Structural shifts: Baby boomers, now in their 70s, won’t be financing En Primeur for wines they’ll drink in their 90s—so who will fund wine to maturity?

• Younger generations may have more adventurous tastes, shifting demand away from traditional regions.

• Marketplaces will increasingly play a key role in price discovery, and they are distinct from the notion of e-commerce.

• This shift in price discovery could reshape the role of wine merchants, as price transparency has been the Achilles’ heel of the wine trade.

• Brexit impact: Movixng and storing wine in the UK has become too costly and bureaucratic.

A positive POV

Amid all the negative press surrounding alcohol, I’ve found someone even more bullish than I am.

Well, found him and interviewed him.

His name is Noah Sanborn Friedman, and his VC firm, Top Shelf Ventures, invests exclusively in alcoholic beverages.

Worth a listen.

Drinks Insider

Noah Sanborn Friedman on Why the Best Time to Invest in Alcohol is Now

Alcohol stocks tumbled last week, almost the minute the US Surgeon General announced that alcohol causes cancer — a dismal start to the alcohol sector’s 2025…

Read more

a year ago · 3 likes · Felicity Carter

And Finally…

Happy Year of the Snake, from a snake myself!

Thanks for reading.

Sara Danese 🐍

One more thing…

Two polls in one email???! Yes, I am feeling extra today.

If you like this format and want to contribute, send me any articles or charts you find interesting at sara@inthemoodforwine.com.

Thanks again.

SUPPORT ITMFW

If you appreciate In the Mood for Wine and its mission to help you understand fine wine as an investable asset class, consider becoming a supporter with a paid subscription. You'll unlock exclusive perks, surprises, etc.—while ensuring the free edition remains accessible to all.

Subscribe now

Can’t (or don’t want to) pay for a supporter sub, for any reason whatsoever? Then share it widely!

Share In the mood for wine

I had promised the second part of the Nebbiolo edition, focussing on Barbaresco this time. So here it is.

If you are new, you can join here to receive straight to your inbox updates about this project, WineLeaks, a curated overview of the wine market, and other in-depth reports.

The Market Take

📅 Week 45

Markets in a Minute

Inflation (CPI) 12-M to October: 
US +7.7% ↓ / UK +9.6% ↑ / Euro +10.7% ↑

Interest Rates (Bank Rates): 
US +3.75 - 4.00% / UK +3.00% / Euro +1.5 - 2.25%  

S&P 500 (5D): 
-0.69%

Crude Oil WTI (5D): 
-9.85%

Gold (5D): 
-1.25%

CBOE Volatility Index VIX (5D): 
+2.66%

US$ Index DXY (5D): 
+0.64%

What happened in the markets last week?

▪️Last week, everyone that hates crypto came out of their hole to do a good old I told you so. Charlie Munger (Warren Buffett’s right-hand man) said “crypto is a bad combo of fraud and delusion”.

Minneapolis Fed President Neel Kashkari said it's not just FTX: crypto in its entirety is “nonsense”, pushing back on some of the merits most-cited by crypto adherents:

▪️Stocks looked fine last week. As long as you look away from the energy sector. Lower prices for oil and gas, however, meant a 1.7% decline across energy stocks.

Oil traders have pulled back because of weak demand from Asia, and China is grappling with a new surge in Covid-19 cases, slowing its pandemic reopening and tempering optimism about global demand.

▪️The yield curve is highly inverted. Two-year yields have risen much higher than 10-year yields, a dynamic that has, in the past, preceded a recession.

The Wine Market Update

(MoM = month on month)

Livex 50 (MoM): 
-0.4% 
Value 409.37

Livex 100 (MoM): 
-0.5%
Value 422.06

Livex 1000 (MoM): 
+0.2%
Value 484.99

What happened in the fine wine markets last week?

▪️Liv-ex reported a widening of the gap between first growths wines and their respective second wines.

▪️Last week, the Consorzio del Vino Brunello di Montalcino hosted the first 2018 Brunello di Montalcino En Primeur in London. If you want a candid opinion about the vintage look no further than's substack.

I’ll let you make up your mind on the quality, but want to draw your attention to value.

Nonetheless, the Consorzio has rated this vintage with four stars out of five and we all know what that means: the prices will stay high. 

▪️Moving northwards, Piemonte (Piedmont) is gaining ground in terms of trade share; however, on the thinnest of margins, commanding no more than 3% of overall trade between July to September.

I hope that this WineLeaks will support the continued share increase in favour of the fantastic wines from Piemonte.

Barbaresco Best Crus

In the first part of the Nebbiolo edition, I looked at six wonderful Barolos. If you are interested, you can read it here:

in the mood for wine

WineLeaks #13 - The Nebbiolo Edition

Welcome to In the mood for wine — a weekly newsletter on wine for the next gen of wine lovers and investors. This is WineLeaks, a curated overview of the wine market, which will be with you every Monday at 10 a.m. (London time). You can find all the links to this newsletter’s past editions on…

Read more

4 years ago · 6 likes · Sara Danese

In this edition, I want to draw your attention to Barolo’s lesser-known cousin — Barbaresco.

What’s the difference between Barolo & Barbaresco?

Let’s start with what’s the same.

▪️Both wines are made with 100% Nebbiolo.

▪️In addition, during the Barolo & Barbaresco Academy, Sandro Minella, a representative of Langhe Vini, debunked the biggest myth about the difference between Barolo and Barbaresco.

Many wine critics (and producers!) think that the biggest difference between the two is about the soil. You can see in the maps below that the laminated Sant’Agata Marls (marls are rocks made of clay and limestone) are present in the geological composition of Barbaresco (especially for crus around the River Tanaro) as in the south-eastern and central region of Barolo. This limestone-clay-based soil is ideal for Nebbiolo.

There are two main differences:

▪️There is, on average, 30% less rainfall in Barbaresco than in Barolo. Barbaresco’s proximity to the Tanaro River creates warmer morning temperatures during the growing season and cool evening breezes that keep vines refreshed and healthy — showing a greater diurnal range. Barbaresco vineyards facing the Tanaro River the harvest will start on average 7 to 10 days earlier than in Barolo. Thanks to this, its structure is more refined and Barbaresco can generally be enjoyed earlier than Barolo.

▪️Ageing requirements are shorter for Barbaresco (2 years) than for Barolo (3 years).

In his Pocket Guide, Hugh Johnson writes of Barbaresco:

Often better than Barolo, Barbaresco’s lesser reputation is undeserved. When spot on, the gracefulness, age-worthiness and perfumed intensity are like that of no other wine in Italy — the world, really.

Riserva vs Standard Release

Barbaresco DOCG must be aged for at least two years and two months before release, with a minimum of nine months in oak. The mandatory ageing period for Barbaresco Riserva DOCG is 50 months starting November 1st of the harvesting year, ageing two more years, but not necessarily in oak. Not all winemakers produce a Riserva and most of the ones who do just make it in special years.

For example, in a French style, Gaja doesn’t produce any Riserva.

Others, many, instead decide to go out with a ‘standard release wine’ aged longer than the minimum, going to market when they believe the wine to be ready.

What are Barbaresco Best Crus?

MGA = Menzione Geografica Aggiuntiva. Delineated place-name or, more simply, cru.

Barbaresco Official Map

Note that I was cautioned against calling some MGAs better than others — and instead point at those more historical ones. In the map drawn by Renato Ratti in 1984, you can see which ones were considered “with special character”. This, of course, doesn't exclude others, especially in light of climate change and the new available technologies both in the vineyard and the cellar.

The Barbaresco DOCG production area includes the city of Barbaresco itself as well as the two neighbouring cities of Neive to the east and Treiso to the south. Hugh Johnson in his Pocket Wine Book summarises it well:

• Barbaresco: most complete, balanced.

• Treiso: freshest, most refined.

• Neive: most powerful, fleshiest.

You can see that the historical maps focus on sites predominantly in the city of Barbaresco and the immediately adjacent areas in Neive and Treiso. Treiso, particularly, was mainly planted with Moscato and is one of the few areas in the Langhe where forests still grow tall and temperatures are noticeably cooler, especially at night. The best crus are all located to the north and west of the town. However, this coolness could become a godsend in an increasingly warmer earth in the years to come.

Until the 1960s, both Barolo and Barbaresco were blended wines, using fruit from different vineyards and sectors. Some producers, such as Bartolo Mascarello, still believe this is the best approach. The estate owns vines in Cannubi, so could theoretically produce a single-vineyard wine from this great site, but Maria Teresa Mascarello believes the blend is superior to the wine she could make from this single vineyard.

Among the most exciting crus in Barbaresco, I’ll explore the ones in the city of Barbaresco, Asili, Montestefano and Rabajà. However, that’s just because of length constraint — Martinenga, Montefico and Roncagliette are three more worth noting.

2019 Vintage

Before delving into the MGAs, let’s take a look at the most recent 2019 vintage data from Saturnalia.

A mild winter was followed by a rainy spring and the hottest June of the last decade. Temperatures cooled in rainy July and September/October offered large differences in temperature between days and nights — which rewarded grapes with plenty of fresh acidity, complexity and not excessive alcohol, one key requirement for high-class Nebbiolo.

• “It is too early to assess the 2019 Barolos as they are not on the market yet, but the Barbarescos I have tasted look very exciting.” (TWI) ($)

As part of Susan Hulme’s Spin the Bottle piece on Barolo & Barbaresco 2017, 2018 and 2019 for The Wine Independent, she noticed that, when tasting the 2019 Barbarescos, her scores are higher on average than for 2017 and 2018.

“For the eighty 2019 Barbarescos I tasted, I gave an average score of 91. What is very attractive in the 2019s is the poise and brightness of the aromas and flavours. These are firmly structured wines with a very pure and pristine quality of fruit. They have plenty of firm tannins, but the tannins are polished and refined. They need more time to open and show their real potential, but they look like wines capable of long aging.”

Among the top scoring are the 2019 Gaja Barbaresco (£155/bottle) and 2019 Massolino Barbaresco Albesani.

▪️Asili

Asili is the first ‘single vineyard’ to appear on wines in 1967 and since then the site was championed by Ceretto and, most famously, Bruno Giacosa. It is Bruno Giacosa that notoriously said:

“Even out of a lineup of dozens of Barbarescos, I can always pick out Asili, thanks to its intense floral perfume and its extraordinary elegance.”

2019 Ceretto Barbaresco Asili (£107/bottle)

This is an outstanding wine, Susan Hulme MW sang praises about Ceretto’s Asili and its longevity; Aldo Fiorelli at Decanter focused on the elegance of the MGA, which is most representative of Ceretto’s style. Poised, restrained strawberry, dried flowers and liquorice root wrapped up in ripe tannins and lifted acidity. Concentration, weight and balance make this a wine for the long haul. Both awarded it a 95-point score. For Monica Larner, at Robert Parker, it is ‘a special treat’ and awarded it a 96. It received 18 points from Walter Speller at Jancis Robinson. Although, for some reason, Kerin O’Keefe was the only wine critic to not believe in its longevity.

Despite this, 2019 is considered a great vintage. David Fletcher, who has been making wine for Ceretto and under his own label, believes that 2019 is better than both 2010 and 2016 because it has a less generous mouthfeel and is more elegant. He told Walter Speller at Jancis Robinson:

“2019 is better because of the exceptional purity of the fruit. It is like a cross between 2013 and 2016. It is very refined and structured even if right now still a little aggressive.”

At the top end of Asili sits Bruno Giacosa (£138 / bottle). Bruno himself passed away in 2018, but his daughter Barbara has ensured continuity in always crafting wines with a beautiful embracing velvety texture with buried dense, rich, tannins like a little full stop of crushed chalk firmness. Their 2016 Asili Riserva (£350 / bottle), which was scored 100 by many wine critics, is among the world’s top wines. Another interesting winemaker is Roagna, producing some of the most convincing Barbaresco crus, in tiny quantities, with maniacal attention to details; and the cooperative Produttori del Barbaresco (for Asili in Riserva) offers truly unmatched value for money.

▪️Rabajà

Finding information about Italian MGAs is very hard. Nonetheless, Rabajà borders Asili to the east. It is known to deliver elegant yet muscular wines that age well, although they can certainly be appreciated when young.

2019 Giuseppe Cortese Barbaresco Rabajà (£36/bottle)

Daniele Cernilli in his latest book The Essential Guide to Italian Wine 2022 summarises both Rabajà and Giuseppe Cortese quite well:

“Rabajà is, along Martinenga and Asili, an authentic grand cru, the same as Chambertin and Chambertin Clos de Béze in Gevrey Chambertin are. The difference is that in Burgundy this is officially recognised whereas in Italy it almost seems to be a secret among sector operators. The most authentic Rabajà winemaker is Giuseppe Cortese whose Barbaresco is tradition in a bottle.“

Walter Speller awarded it an 18 and defined it as a “thoroughbred”.

▪️Montestefano

Aldo Vacca, the long-term director of Produttori del Barbaresco, believes this vineyard gives the most Barolo-like wine from Barbaresco. The steep site and the high calcium content in the soil deliver a weighty yet classic style of Nebbiolo that, with time, develops secondary aromas of leather and tobacco.

2019 La Ca’ Nova Barbaresco Montestefano (£43/bottle)

La Ca’ Nova’s cru of Montestefano is approximately 270 metres above sea level and facing south, which enables them to produce more powerful, deeper styles. They not only make some of the most breathtaking Barbaresco, but they make some of the most reasonably priced. Savoury and structured, the palate shows raspberry compote, juicy Morello cherry and baking spice alongside taut, refined tannins and fresh acidity. Very long and captivating and can already be approached. 97 points from Kerin O’Keefe (WE), and 17++ from Walter Speller (JR), this is the best Barbaresco that you’ve never heard of. 2019 is, alongside 2016, one of the top vintages of the Rocca family.

Labelling

To conclude, a word of warning about MGAs. Some winemakers — such as Gaja in this instance, produce a wine with grapes from a particular cru but some vintages declassify it from Barbaresco DOCG to Langhe DOC (before 2014), but the wine can still include the MGA name on the bottle.

The requirements for Langhe DOC are less stringent, as other grapes can be incorporated into the blend and there is no minimum ageing requirement.

For example, I found the listing of 2014 Barbaresco, Sorì Tildìn, Gaja, Piedmont, Italy on the BBR website quite confusing:

While it says Barbaresco, Sorì Tildìn, and the price is that of the Barbaresco DOCG, the label clearly shows the Langhe DOC version. In addition, the description doesn’t mention whether the appellation is Barbaresco DOCG or Langhe DOC.

Here’s instead an example where it’s clearly stated.

This may be obvious to you, but it was quite confusing to me.

I hope you found this useful. If you did, why not share it?

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Thank you!

Sara Danese

PS: I’ll be in Sicily over the next week to taste some delicious wines with the Consorzio Sicilia DOC. I’ll report back to you soon!

Directory of All Investment Cases

in the mood for wine

Directory of Investment Cases

Wine lovers, I’ve put together a list of all the investment cases discussed in In the mood for wine, classified by region. If you are new, you can join here to receive straight to your inbox updates about this project, WineLeaks, a curated overview of the wine market, and other in-depth reports…

Read more

4 years ago · 1 like · Sara Danese

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IG: In the mood for wine / Twitter: In the mood for wine

DISCLAIMER:

My investment thesis, risk appetite, and time frames are strictly my own and significantly different from my readership's. As such, the investments covered in this publication and in this article are not to be considered investment advice nor do they represent an offer to buy or sell securities or services, and should be regarded as information only. 

Last week, the Union des Grand Cru de Bordeaux hosted their annual tasting in London, showcasing the recently bottled 2020 vintage, and I was eager to see how the wines have turned out. I feature some of those wines in today’s WineLeaks — which is a bit longer (and later) than usual!

If you are new, you can join here to receive straight to your inbox updates about this project, WineLeaks, a curated overview of the wine market, and other in-depth reports.

The Market Take

📅 Week 45

Markets in a Minute

Inflation (CPI) 12-M to October: 
US +7.7% ↓ / UK -- / Euro +10.7% ↑

Interest Rates (Bank Rates): 
US +3.75% / UK +3.00% / Euro +1.5%  

S&P 500 (5D): 
+5.90%

Crude Oil WTI (5D): 
-4.04%

Gold (5D): 
+5.25%

CBOE Volatility Index VIX (5D): 
-8.27%

US$ Index DXY (5D): 
-4.02%

▪️What happened in the markets last week?

A lot. You win some, you lose some. I know you are here mainly for wine — but some of the events this week may or may not have a ripple effect on other assets, including fine wine.

FTX Files For Chapter 11

FTX, the third-largest crypto exchange, growing in size and recognition over the past two years, filed for bankruptcy.

What happened? On November 2nd, CoinDesk, a news website focusing on crypto, published Alameda’s balance sheet, revealing its incestuous relationship with FTX. Alameda is a trading firm also owned by the founder of FTX, Sam Bankman-Fried.

Alameda was facing a barrage of demands from lenders after crypto hedge fund Three Arrows Capital collapsed in June, creating losses for crypto brokers such as Voyager Digital.

It later emerged FTX had lent $10bn of the $16bn of crypto-assets customers had entrusted with it to Alameda, to help it meet its liabilities, which the trading firm is alleged to have used to make risky bets.

In addition, the Securities and Exchange Commission (SEC) is said to be examining whether the platform (FTX) is following securities laws related to the segregation of customer assets and trading against customers, Reuters reported. The probe began a number of months ago.

Binance CEO Changpeng Zhao said he’d be selling his remaining holdings of FTT tokens but a few days later Binance announced a non-binding letter of intent to buy FTX subject to due diligence. Binance officially walked away from the deal after a few hours of checking its books and loans.

On Friday, FTX Filed for Chapter 11.

Consequences:

• Bitcoin price ↓

• Trust in crypto-currencies ↓

• Market cap of Robinhood ↓

• Ripple effect ??

The collapse of the third largest crypto exchange, FTX was quite a blow to the digital token market. "FTX going down is not good for anyone in the industry. Do not view it as a win for us. User confidence is severely shaken," wrote Changpeng Zhao, the chief executive of FTX's larger rival, Binance.

The fallout from these revelations included a nosedive in the value of ftt, a token issued by FTX. The collapse of FTX and the uncertainty it has brought to the crypto industry is a damaging blow — prices of bitcoin et al. remain under pressure and vulnerable to further sharp declines.

Will that impact the broader market and the economy? Some analysts think it’s an isolated case — such as the one appearing on the BBC, Dan Ives, an analyst at Wedbush Securities, said he did not think FTX's troubles would spark wider problems in the stock market.

"It's a black swan event. There's really no bleed over into the overall market, there's containment," he said. "That's extremely important and another positive signal in terms of the walls between systematic risk and not."

Others - such as , in his most recent piece, talk about the current economic environment in terms of the mechanics of a tsunami:

The financial system, conditioned by low-interest rates, is struggling to cope with a historic acceleration of interest rates. As rates rise and liquidity gets pulled out of the system, the tide is receding and exposing a variety of previously unsuspecting naked swimmers [read: FTX].

Cubic Analytics

The Earthquake Effect

Read more

3 years ago · 9 likes · 5 comments · Caleb Franzen

Inflation

At the same time as the FTX was filing for bankruptcy, in the US, inflation data showed an increase by a less-than-expected annual rate of 7.7% in October.

Consequences:

• S&P 500 ↑

• Yield on treasuries ↓

• Dollar ↓

• Volatility ↓

The stock market soared. The S&P 500 index finished 5.5 per cent higher on Friday, while the yield on the benchmark 10-year Treasury note fell 0.27 percentage points to 3.82 per cent, while the DXY (the dollar index against a basket of six peers) dropped 2.3%, its worst day in seven years.

Why? In a number of the inflationary historical bear market cases, equities turned up just as inflation turned down from highs. Across the historical cases, however, the turn in inflation was accompanied by a meaningful economic weakness that required the Fed to choose between inflation and economic pain. And as discussed, this weaker growth and high unemployment was itself an ongoing downward pressure on inflation.

However, today, moderating inflation is not accompanied by weaker growth and inflation seems unlikely to hit central bank targets any time soon.

The Wine Market Update

(MoM = month on month)

Livex 50 (MoM): 
+0.1% 
Value 409.44

Livex 100 (MoM): 
-0.5%
Value 422.06

Livex 1000 (MoM): 
+0.2%
Value 484.99

▪️What happened in the fine wine markets last week?

Liv-ex published a report showing the most profitable Bordeaux vintage: 2014, known as the best-rated ‘off’ vintage of the modern era.

This analysis doesn’t have much standing as the vintages have different released dates and judging them over the same three-year period is irrelevant.

I suppose it’s an interesting trivia to know.

In other news, Matteo Ascheri, President of the Consorzio di Tutela Barolo Barbaresco Alba Langhe e Dogliani confirmed to The Drink Business that the Barolo en primeur was set to become an annual official appointment from 2024.

Having shared this news, some people don’t like the idea because ‘it doesn’t benefit the final consumer’ and others believe en primeur altogether to be a marketing stunt.

On one side, you’d have a build-up to the release — more cohesive information regarding the vintage and a wider exchange of ideas on the wines. It is a marketing stunt, but one that increases the profile, transparency and awareness around some wines in the area. I think that’s a benefit to the consumers.

Will the prices go up? Probably. But at the same time I do believe that the current prices are too low, when accounting for the quantity produced, the quality of Barolo DOCG and especially when compared to Bordeaux and Burgundy.

My only worry is the risk that — like en primeur — allocations will be controlled by few(er) operators in the market. I hope not.

Bordeaux 2020 wines

Another week, another GCC tasting. This time it was focused on the 2020 vintage. Here’s a summary of the main characteristics:

• Quality: 2020 = 2018; not as consistent as 2019, 2016, 2010

• Yields ↓ = Concentration ↑

• Alcohol ↓

• Could find dry tannins that are sometimes underripe esp. in second wines

• The Right Bank had an easier time: less rain in August, with clay-limestone soils that kept the freshness

• Top scores by critics favour the Right Bank wines

I’ll pick one wine in each of the main AOCs to discuss but you can find the full list of wines in the vintage with individual scores that I downloaded from BordOverview, with the £ updated min prices & the link to wine-searcher.

Pauillac 2020 

We need to talk about Pontet-Canet.

2020 Pontet-Canet

I am completely intrigued that this wine comes highly recommended by all wine critics: Anson (97) and Perrotti-Brown (96-98+). Robinson gives it a less-enthused 17.

I didn’t enjoy any of the most recent vintages: 2017, 2018, 2019, 2020. While tasting it (on three separate occasions), I received similar feedback from people around me, MWs, wine merchants and sommeliers. I tasted it a few times and then went back to it some more. I just don’t think it’s good.

But who am I to judge? It’s better you listen to those more competent wine experts.

Jane Anson hailed Château Pontet-Canet as a serious over-performer “a brilliant wine in this vintage”. Lisa Perrotti-Brown MW writes in the Wine Advocate: “This is a singular, fascinating expression of the vintage and highly recommended!”. Jancis Robinson says: “This should mature into something really exciting. Real energy here.“

This discrepancy that I cannot riconciliate is driving me mad — what do you think of Pontet-Canet? Let me know.

In terms of value itself, I would pick the muscular Grand-Puy-Lacoste or the distinctly-Pauillac Batailley ahead of Pontet-Canet. If I were to follow my taste buds, I would choose Pichon-Longueville Comtesse de Lalande — a stunning wine and easily among my favourites in Bordeaux.

St-Estèphe 2020

Densely-coloured, classic, spicy and rich are the 2020 wines of St-Estèphe. Cos D’Estournel, Montrose and Calon-Ségur all presented with elegance and definition.

2020 Calon-Ségur

Calon-Ségur is classified as 3rd growth, but Jane Anson in Inside Bordeaux re-classifies them as 2nd growth. She particularly believes that its soils have a killer combination of gravel and clay typical of St-Estèphe which “transmit a powerful shot of ageing potential and concentration to the wine”.

For the 2020 in particular, Calon-Ségur presented a “concentrated, chiselled and juicy, this has clear personality and equals the great, classically balanced vintages of Calon like 2016.” It finishes with impressive length and depth. Fantastic wine!

It received 98 from Anson, (95 - 97)+ from the Wine Advocate, 18 from Jancis Robinson. A few months ago, Liv-ex produced a historical analysis of the château — showing a very low aggregate critics score for the 2020 vintage. That tells me that Liv-ex benchmark score must be heavily dependent on Neal Martin’s, the only among the top wine critics who awarded Calon-Ségur a score lower than 95 points (or eq.).

While the Liv-ex report is recommending 2019 as it’s trading at a 11.7% discount from the 2020. A word of caution: 2017-2019 vintages showed atypical Calon-Ségur in their concentration and character. William Kelley was particularly critical about the high alcohol levels in the 2019.

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St-Julien 2020

It seems as though St-Julien didn’t shine bright as most years in 2020. Léoville-Las-Cases and Ducru-Beaucaillou performed well still, but it wasn’t one for the annals. So let’s talk about the smallest of the appellation’s classified properties — Château Saint-Pierre.

2016 Saint-Pierre

And the cheapest.

Planted to 75% Cabernet Sauvignon, 15% Merlot, 10% Cabernet Franc, it’s one of the underdogs of the appellation, which is gaining more exposure and recognition. Once again Jane Anson upgrades this domaine from a 4th growth to a 3rd growth, as it’s situated in the heart of St Julien, directly opposite Ducru-Beaucaillou, a stone’s throw from Beychevelle and Branaire Ducru.

Investment-wise, when buying gems at undervalued prices, it’s better value-for-money to buy an ‘on-vintage’ (the opposite is true for 1GCC: buying ‘off-vintages’ at discounted prices is the better strategy). 2016 is the most effortlessly incredible vintage in St Julien, and St Pierre is right up there with the best examples you can find. It is one of the most Pauillac-like wines, the tannins are pretty fierce, and it needs time but it will reward ageing.

A very well-crafted, understated, elegant wine that will age for 20 to 30 years.

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Margaux 2020

Jane Anson awarded Left Bank wine of the vintage crown to Château Margaux. Needless to say, there were a few wines here worthy of attention in 2020. Along with Margaux, Rauzan-Ségla & Palmer set the bar for high quality in this AOC.

While Rauzan-Ségla is certainly a must-buy in 2020 — the 2016 is still priced at modest 6% premium, which makes it a great bargain!

2020 D’Issan

Among the top wines of the appellation, Château D’Issan is an undervalued estate worth watching out for.

D’Issan is a 3rd growth which, in terms of quality, has been scored as 2nd growth by Anson in Inside Bordeaux. Issan had suffered from decades of under-investment but has since the mid-90s begun upgrades both in the vineyard and the cellar worth €10m. It offers some good value Margaux.

In terms of the price difference, it’s once again better to invest in 2016 rather than a lesser vintage, especially in cases such as this one whereby the price difference is zero.

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Pomerol 2020

Do you remember when I made the case for Vieux Château Certan 2012 in WineLeaks #12? It seems that, differently from Margaux above, in Pomerol, the wine’s prices levels are driven by the brand (of course!) but then purely by vintage and critics’ score.

Vieux Château Certan 2020

There were quite a few estates that received high appraised in 2020 and among those Vieux Château Certan stole the heart of a lot of wine critics. That’s why the price is also higher:

There are going to be two ways to approach this: 1) Just let the remarkably sensual, inexplicable beauty of it wash over you or 2) Try to unravel all those intricate layers and have it blow you mind. Either way, this is simply an incredible achievement—bravo Alexandre and Guillaume Thienpont!

In 2021, Europe was facing one of the largest shortages of raw materials with a consequent increase in prices. Therefore, a lot of estates came out with higher release prices en primeur to make up for that. Vieux Château Certan increased their release prices by 33% on their 2019. In their case, they were helped by raging reviews.

Currently, the 2020 vintage is selling for £250, the 2019 for £236. It’s not a big difference at all — but why go for the lesser vintage? In Vieux Château Certan’s case, the difference is so minimal that once it’s released in bottle, being available more widely might actually boast its price.

Trotanoy 2019

The same price dynamic, albeit more marked, can be observed with one of my absolute favourite wines — Trotanoy. Their widely acclaimed 2020 vintage is selling for £311, while 2019 for £253. Which one to go for? In this case, I’ll probably pick the 2019.

In addition to the price increase, I believe there’s also a supply-demand ratio here. 2020 was a vintage that somewhat disappointed everywhere else but some, generally Right Bank, names stood out. Critics awarded the best scores and buyers jumped on them, inflating 2020 prices higher.

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St-Emilion 2020

For St-Emilion, Larcis Ducasse is still, in my view, a great investment. Check out the investment thesis on WineLeaks #12.

The greatest success of the vintage, however, was Canon. Nicolas Audebert and his team also work at Château Rauzan-Ségla, to craft another wine that was among the top of the vintage. Jane Anson awarded Right Bank wine of the vintage crown to Château Canon, with a 99-point score. And she was not alone — it was hailed as an “exhilarating triumph!“ by most of the critics. And for that reason, the 2020 Canon has been released for €96 per bottle ex-négociant, up 37.9% on the 2019 release.

Is 2020 Canon overpriced?

Yes, I think so. Saturnalia also agrees. However, you can see that I’ve bought 2019, 2016 and 2014 Canon for the Saturnalia Model Portfolio in the October update.

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Pessac-Léognan 2020

I could not close this 2020 without mentioning Château La Mission Haut-Brion. Certainly not the cheapest, but what a brilliant wine, and underpriced too!

La Mission Haut-Brion, 2020

Tightly in control, superbly elegant, this 2020 is a stunning expression of the vintage!

I hope you enjoyed this edition. If you did, why not share it?

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Thank you!

Sara Danese

Directory of All Investment Cases

in the mood for wine

Directory of Investment Cases

Wine lovers, I’ve put together a list of all the investment cases discussed in In the mood for wine, classified by region. If you are new, you can join here to receive straight to your inbox updates about this project, WineLeaks, a curated overview of the wine market, and other in-depth reports…

Read more

4 years ago · 1 like · Sara Danese

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Got Feedback? Just Hit Reply

IG: In the mood for wine / Twitter: In the mood for wine

DISCLAIMER:

My investment thesis, risk appetite, and time frames are strictly my own and significantly different from my readership's. As such, the investments covered in this publication and in this article are not to be considered investment advice nor do they represent an offer to buy or sell securities or services, and should be regarded as information only. 

Good morning Wine lovers,

Last week, I was very busy tasting some delicious wines indeed. The Masters of Wine Institute organised a tasting showcasing the 2018 vintage of the Grands Crus Classés from the Médoc, Pessac Léognan, St Emilion and the top Pomerol estates, including most of the First Growths and their Right Bank equivalents.

That was followed by a more mundane event at 67 Pall Mall. “Beatles B Sides & A List English Wines with Nelson Pari Mmus & Richard Bampfield MW” turned out to be an incredibly fun evening, where we tasted some incredible ESW accompanied by the sounds of the Sixties.

I feature some of those wines in today’s WineLeaks.

If you are new, you can join here to receive straight to your inbox updates about this project, WineLeaks, a curated overview of the wine market, and other in-depth reports.

The Market Take

📅 Week 44

Inflation (CPI) 12-M to September: 
US +8.20% / UK +8.80% / Euro +10.00%

Interest Rates (Bank Rates): 
US +3.75% / UK +3.00% / Euro +1.5%  

S&P 500 (5D): 
-3.35%

Crude Oil WTI (5D): 
+5.71%

Gold (5D): 
+2.07%

CBOE Volatility Index VIX (5D): 
-4.66%

US$ Index DXY (5D): 
-0.32%

▪️What happened in the markets last week?

🇺🇸The Federal Reserve’s signals of more interest-rate increases ahead rattled financial markets anew last Thursday, sending stocks lower and driving bond yields back near multiyear highs. Powell firmly dashed Wall Street’s hopes for some relief after officials lifted the target fed-funds rate by 0.75 percentage points for the fourth straight meeting.

🇬🇧The Bank of England raised its key interest rate by 0.75 percentage points on Thursday, the largest increase since 1989, in an effort to tame surging inflation but which, by the bank’s own estimates, will help drive the U.K. economy into a recession lasting over a year.

🇪🇺Consumer prices in October were up a record 10.7% from a year earlier, exceeding economists’ expectations. The ECB raised its key interest rate to 1.5% from 0.75% Thursday as part of its anti-inflation campaign but signalled mounting concerns about economic growth, which investors took to mean it could soon ease back on rate rises. The inflation surge raises doubts about that.

🇨🇳China’s exports to the rest of the world shrank unexpectedly in October, a sign that global trade is in sharp retreat as consumers and businesses cut back spending in response to central banks’ aggressive moves to tame inflation.

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(MoM = month on month)

Livex 50 (MoM): 
-0.3% 
Value 410.24

Livex 100 (MoM): 
-0.5%
Value 422.06

Livex 1000 (MoM): 
+0.2%
Value 484.99

▪️What happened in the fine wine markets last week?

The Liv-ex 100 was down -0.5% and the Liv-ex 50 -0.7%. But not the Liv-ex 1000, though! Why? The market segment that didn’t see a dip was the Champagne 50, once again driving the performance. The sub-index rose 2.1% in October and was the best-performing of the seven sub-indices for the fifth month in a row.

Liv-ex published a report on fine wine in Asia, taking a very grim view of China, driven by pessimism over the zero-covid policy, the weakness of the Yuan and the recent re-election of President Xi.

However, it was interesting to know the market differences: China’s obsession with Burgundy has changed the price market dynamics, while in Hong Kong Bordeaux & Burgundy go head-to-head, and Italian wines shine in Singapore and Champagne takes more than 20% of sales in Japan and South-East Asia.

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Sauternes & Barsac 2018 wines

At The Masters of Wine Institute’s Grands Crus Classé 2018 vintage tasting, it was easy to get lost in the puzzling midst of the reds, and the eight sweet Sauternes may have been left for last, as an afterthought.

Diminished sales of sweet wines have been an all too real problem for growers in Sauternes and Barsac, and they have been looking to develop new dry white wines from their vineyards in Sauternes. And because people seem to have forgotten how to enjoy sweet wine, although the quality of these wines stands tall, their investment value heavily depends on the brand itself.

Château d'Yquem (the only First Growth Superieur) commands a pricing power that others simply don’t. Jane Anson charts the average prices of Sauternes wines and notes how they are heavily affected by production volumes. Also, the first growth average prices are heavily skewed by Château d'Yquem (£233 vs £35 average of most first growths). That is especially true in the latest vintages, since when Pierre Lurton announced that the new release would be held back and not released en primeur. Their 2019 vintage was released in March 2022, at a premium.

In terms of production, 2012 was an extremely difficult vintage for Sauternes, with many classified growths (including Yquem) choosing not to produce a Grand Vin. Yquem’s effect is clear: the average price drops below €40/bottle. Prices once again dropped in 2015 and 2017 following a plentiful crop being released to a market that couldn’t absorb all this production for the sweet wine areas. Small production years in 2017 and 2018 after frost led to a rise in prices for the generic Sauternes, but plentiful 2019 and 2020 saw it drop again. More recently, in 2021, the frost was brutal. It destroyed a lot of the crops and left some estates under enormous financial strain.

At the Masters of Wine tasting, Coutet, D’Arche, De Myrat, Doisy-Daëne, Filhot, Lafaurie-Peyraguey, Rayne Vigneau and Suduiraut from the 2018 vintage were on display.

Jane Anson notes that the vintage suffered from the same issues as did some other parts of Bordeaux: rain and mildew. Estates such as Coutet, Suduiraut and de Fargues had yields right down to 5hl/ha or less — hence the lusciousness.

The two standouts at the 2018 tasting were: Lafaurie-Peyraguey and Suduiraut. Jane Anson praises d’Arche for being a great value for money in her Decanter article.

2018 can’t stand up to the great vintages of Sauternes. Lisa Perrotti-Brown writes in The Wine Advocate:

The 2018 wines from Sauternes do not possess the profound botrytis signatures of a truly great vintage, nor do they have the marked acidity & freshness of the 2017s or 2016s. These are bolder, forward wines with well-defined tropical and stone fruits expressions, albeit more of a late harvest style in some cases than a textbook Sauternes. Indeed, the best wines of Sauternes and Barsac in 2018 came in as late as possible—in late October and even into early November. These wines have notably more botrytic character than the earlier harvested wines and therefore also have livelier acid profiles.

The great vintages of Sauternes in the last decade are 2014 and 2011.

Jancis Robinson on 2014:

A triumph for Sauternes in this vintage, with some botrytis in September and plenty in late October. Some observers are even calling it the best vintage since the turn of the century.

Jancis Robinson on 2011:

Where red Bordeaux failed, Sauternes triumphed in 2011, giving opulent, rich, fresh wines of excellent quality.

The 2017 vintage, along with 2001, offers quality and value, writes Liv-ex. The jury is still out on the 2017 vintage — in the article, praised perhaps by comparison with other categories for Bordeaux. On the other hand, 2001 is hailed by Jancis Robinson as “perhaps the greatest Sauternes vintage in modern times”

The fact is that Sauternes offers great value to investors — more specifically because the prices of first growth (excl. Yquem) are driven solely by yields and not so much by the secondary market or other market dynamics, the savvy investor can afford to buy top first growth châteaux from top vintages at reasonable prices.

Here’s an example:

🍬 Château Lafaurie-Peyraguey 2014 (£36/bottle)

Lafaurie-Peyraguey is a château that dates back to the 13th century — how much more glam can you ask for? They are considered one of the top 5 Sauternes châteaux and some of the on-vintages are cheaper than their lesser ones (because of the yields).

For example, 2018 now sells for £40-£45 / bottle. When compared to their 2014 vintage, £36/bottle, it’s just a no-brainer. Incidentally, 2014 is when new owner Silvio Denz of Lalique took ownership of the estate, starting with a bang. Jane Anson in Inside Bordeaux notes that “their wine has always been excellent quality, but the flavour definition has really tightened up since Denz’s team (Valerie Lavigne & Axel Marchal consult on both LP & Yquem, following Denis Dubourdiu) took full charge of winemaking; this is clearly noticeable from the 2014 vintage.” Awarding the wine a 96, she writes:

Very rich, complex wine offering lemony and smoky botrytis, melon, honeyed pineapple and apricot. Dense but suave, this is the biggest Sauternes of the year, in the typical LP style.

In addition, the other on-vintages, 2001 and 2011, trading at £54/bottle and £56/bottle respectively, didn't impress the critic.

English Sparkling Wines

I know among you, there are many English Sparkling Wine (ESW) sceptics.

in the mood for wine

Can a bottle of English sparkling wine be worth £195?

In the mood for wine joins the nation in mourning the passing of Her Majesty The Queen. We wish to convey our condolences to the Royal Family at this time of great sorrow…

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4 years ago · 4 likes · 4 comments · Sara Danese

I count myself in that bracket — not necessarily as quality is concerned. I am more apprehensive about the following:

1. Brand track record

   Brands aren’t built in a day and it takes a lot of cold hard cash invested over a sustained period of time and the right kind of investment and the right kind of winemakers and the right kind of vision and…and…and… Long story short, we don’t yet know which brands will make the right strategic moves and now we can only make an informed guess.

2. Quantity

   Quantity is a double-edged sword for the ESW. Of course, as I have discussed in the Gusbourne 51DN piece, low quantity allows English winemakers to go out with higher prices. However, I do believe that, if ESW were to be taken seriously, it should be promoted by US and Asian wine critics and should be widely available in these critical markets. If we take the example of Argentina’s Malbec, most of Malbec’s consumption was driven by internal demand up until recently. It took a considerable amount of time for Malbec to be taken seriously by foreign buyers and it’s probably still suffering from it.

3. Ability to age gracefully

   The ability to age gracefully and for a long time is critical to its future investment value. And, because little track record is available, the investment risk increases.

On that particular last point, during the Beatles & ESW tasting at 67 Pall Mall, I had the pleasure to try Ridgeview’s 2009 Blanc de Blancs, en Magnum (£150 / magnum).

I wrote on my notes: “Magic.“

Richard Bampfield MW, who was guiding us through the tasting, decided to set the standards very high, starting the tasting with this wine. It showed all the hallmarks of a slow ageing process, still incredibly fresh on the palate and the nose. A rich texture and the biscuit notes made it oh-so seductive. Richard mentioned that he tried older vintages from the early 2000s and he found them equally vivacious and enticing. This may or may not reassure some wine collectors, but it certainly put my doubts about the ageability of ESW to rest.

I must say — I, selfishly, thought long and hard about publicising how great this 2009 Ridgeview is because Richard mentioned there are “only a few bottles“. Back to problem #2!

The other ESW on the list that had to follow such a special vintage were:

1. 2014 Wiston Estate, Rosé (£49 / bottle)

2. 2010 Breaky Bottom, Cuvée Koizumi Yakumu Seyval Blanc (£79 / bottle)

3. 2018 Rosé de Saignée, Hundred Hills (£60 / bottle)

4. NV Gusbourne Brut Reserve, 2019 Base (£45 / bottle)

5. 2018 Bride Valley, Blanc de Blancs (£35.95 / bottle)

A couple of estates (Breaky Bottom and Bride Valley) were a first for me. Richard Bampfield, who is a Master of Wine himself, said he tasted Breaky Bottoms blind alongside other wine experts and they all applauded it for its precision and finesse. Bride Valley, an estate in Dorset, was founded by the late Steven Spurrier, an English wine merchant in Paris. You may remember him because he went on to organise the famous (or infamous, depending on which side you are on!) Judgment of Paris Tasting of 1976, when a Chardonnay and Cabernet Sauvignon from California were ranked above some of the most prestigious wines of Burgundy and Bordeaux. Spurrier, by his admission, said that the 2018 was the first great vintage of Bride Valley — but unfortunately was only able to taste it in its infancy.

Gusbourne NV showed off all of the winemaking skills to craft a harmonious and balanced wine, even in a notoriously tricky vintage in England such as 2019.

Hundred Hill’s Saignée has such a vibrant colour. You may remember it from the Saignée blind tasting in WineLeaks #8, as it was the standout and the top-scoring wine of the line-up. The other rosé, made by Wiston (an estate known for its daring winemaking), a 2014 vintage, eight years old and “fresh like a daisy“ — or better, like a bed of roses.

All in all, I thought it was a very impressive line-up, one that showed ageing potential, incredible winemaking skills and the different personalities of ESWs. 🥂

Lastly, I wanted to check in with you on content. I am thinking of making Thursday a fixture for more in-depth pieces. Please share your opinion in the poll below or the comments!

Thank you,

Sara Danese

Directory of All Investment Cases

in the mood for wine

Directory of Investment Cases

Wine lovers, I’ve put together a list of all the investment cases discussed in In the mood for wine, classified by region. If you are new, you can join here to receive straight to your inbox updates about this project, WineLeaks, a curated overview of the wine market, and other in-depth reports…

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4 years ago · 1 like · Sara Danese

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DISCLAIMER:

My investment thesis, risk appetite, and time frames are strictly my own and are significantly different from that of my readership. As such, the investments covered in this publication and in this article are not to be considered investment advice nor do they represent an offer to buy or sell securities or services, and should be regarded as information only. 

I created a new work-in-progress directory of all the investment cases we discuss, which I hope you’ll find useful.

in the mood for wine

Directory of Investment Cases

Wine lovers, I’ve put together a list of all the investment cases discussed in In the mood for wine, classified by region. If you are new, you can join here to receive straight to your inbox updates about this project, WineLeaks, a curated overview of the wine market, and other in-depth reports…

Read more

4 years ago · 1 like · Sara Danese

If you are new, you can join here to receive straight to your inbox updates about this project, WineLeaks, a curated overview of the wine market, and other in-depth reports.

The Market Take

📅 Week 43

Inflation (CPI) 12-M to September: 
US +8.20% / UK +8.80% / Euro +10.00%

Interest Rates (Bank Rates): 
US +3.25% / UK +2.25% / Euro +2.00%  

S&P 500 $SPX (5D): 
+3.63%

Crude Oil WTI (5D): 
+2.64%

Gold (5D): 
-1.05% 

CBOE Volatility Index VIX (5D): 
-12.39%

US$ Index DXY (5D): 
-0.99%

▪️What happened in the markets last week?

The UK has a new PM — Rishi Sunak and all is well again (in the markets). For now, at least.

In the US, GDP growth figures for the third quarter of 2022 appear strong, drastically improving from anaemic results in Q1 & Q2, but likely strengthens the Fed’s resolve to combat inflation and maintain an aggressive monetary policy stance. And interestingly, the real GDP growth can be attributed to stronger net exports (exports - imports).

Other (lagging) indicators seem to completely negate the work of the Fed. In fact, despite ongoing rate hikes, designed to tighten financial conditions & anchor borrowing/lending activity, total loans & leases in bank credit and private fixed investment continue to hit new all-time highs.

Also, the stock market is experiencing the strongest rally of the 2022 bear market, led by the Dow Jones Industrial Average, despite negative reactions to Q3 corporate earnings. Some analysts have started to gain optimism that this could be the final +0.75% rate hike, with the perception that the Federal Reserve could raise by +0.50% in December 2022, followed by +0.25% in January 2023, the perceived path of monetary policy is becoming less aggressive.

In Asia, Hong Kong’s economy recorded its worst contraction in more than two years as the financial hub’s recovery was stymied by weak global demand, China’s continued Covid curbs and a slow reopening from years of pandemic isolation. In the mainland, Chinese stocks have faced relentless selling pressure through most of the year, with investors increasingly concerned about three issues in particular, namely that China’s reopening might take longer than expected, China’s social priorities may take precedence over the economy and Beijing’s emphasis on security. China itself is gloomily preparing for the biggest shopping festival of the year, known as Double 11 or Single’s Day.

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Note: I am sharing the year-to-date (2022) figures are Liv-ex hasn’t released the monthly returns.

Livex 50 (YTD): 
+3.9%

Livex 100 (YTD): 
+8.1%

Livex 1000 (YTD): 
+14.1%

What happened in the fine wine markets last week?

1️⃣ Did you miss Champagne Day?! Six Atmosphere’s Tom Hewson reported on the latest new releases of Champagne.

Among those is the Rare Rosé 2012. You may remember in the Champagne Investing piece we co-authored, Tom mentioned that “scores for Rare have been fairly Euro-centric, and that an upturn in reputation in the USA would probably send these prices considerably higher”.

Specifically on the Rare Rosé 2012 he comments: “An extremely fine release which nimbly navigates the lines between seriousness and accessibility, giving us (perhaps) a hint of what the straight Rare 2012 may offer.”

Next, we are expecting the 2012 Taittinger Comtes de Champagne, which received a 97 from Essi Avellan MW and a 95+ from William Kelley.

2️⃣ And LVMH’s Champagne maisons were also the drivers of LVMH's strong Wine & Spirits Q3 performance, which enjoyed excellent momentum and increased pressure on supplies. Growth was particularly strong in Europe and Japan but, more importantly, in the US. Jean Jacques Guiony, Chief Financial Officer of the group warned in the Q3 press conference: “We still had bottles available to satisfy the demand for Q3 — which won’t necessarily be the case for Q4.”

LVMH counts Dom Pérignon, Krug and Ruinart in their portfolio, along with Moët & Chandon, Mercier and Veuve Clicquot. Watch out bubbleheads!

3️⃣ Burgundy is back on top, up 27.6% for 2022 so far. Back in May, Liv-ex analysed the most over- and under-priced Grand Crus. Note the top most expensive crus (Romanée-Conti, La Tâche, Musigny and La Romanée) have been excluded to avoid a skewing of the results. The average grand cru costs around £5,000 / 12-bottle case. This falls to £4,000 when the four most expensive appellations are excluded. 

Corton (in the Côte de Beaune) is the least expensive grand cru on average, followed by: Mazis-Chambertin (Côte de Nuits), Clos de la Roche (Côte de Nuits), Corton-Charlemagne (Côte de Beaune) and Charmes-Chambertin (Côte de Nuits) are close to 50% less than the average case price.

See the full list of AOCs in Burgundy.

Why is Corton Grand Cru so underpriced?

In former times, it was a highly esteemed appellation, so much so that Dr Jules Lavalle, in his seminal 1855 work, remarks, “the wines of Corton are closer to the wines of Chambertin than to any other wine of the Côte d’Or”. High praise indeed, but not one that seems to be shared today. In support of this notion, in 2008, Domaine de la Romanée-Conti leased 2.28 hectares of vineyards in Corton from the estate of the Prince de Mérode, and in 2018 it leased a further 2.91 hectares of Corton Charlemagne from Bonneau du Martray.

Corton is the Côte de Beaune's only Grand Cru appellation for red wine. “In geological terms,” writes Charles Curtis MW “the hill of Corton is an outlier—a freestanding hill, separated from the rest of the Côte by erosion”. This part of the hill faces southwest, and it is not as sunny and warm as the east-facing slopes, which is considered a disadvantage for red wine. However, during these times of global warming, things may change.

In case you missed it — William Kelley takes us on a little trip to Corton.

Talking of Corton — Hospices de Beaune to stage one of the largest offerings in History:

“The 162nd edition of the annual Hospices de Beaune wine sale on November 20 will present a total of 51 different cuvées of the 2022 vintage produced from vineyards across the Hospices’ 60-hectare holdings, now in its second year of organic conversion, making it one of the largest ever offerings in the history of the auction, says Sotheby’s in a press release.

These 51 cuvées will be divided into 802 lots: 620 barrels of red wines and 182 barrels of white wines. This year’s offering will include two new cuvées: Corton Grand Cru cuvée Les Renardes and Beaune 1er cru Clos des mouches cuvée Hugues et Louis Bétault.”

This seems like a great segway to explore some special wines in the lesser-known appellations in Burgundy.

The Lesser-Known Appellations of the Côte D'Or

William Kelley has become something of a maker-or-breaker of grower Champagnes. Among them, Ulysse Collin and Egly-Ouriet have quadrupled in price in the space of a few years, thanks to Kelley’s stellar 100-points reviews.

His approach to offering exposure to the lesser-known but worthy-of-attention winemakers is particularly interesting to savvy collectors & investors (such as us!).

On that note, since residing in Beaune, he instituted for the Wine Advocate, a regular coverage of the Côte Chalonnaise, Burgundy’s Hautes Côtes and the less-famous appellations of the Côte d’Or itself.

Many investors & collectors may have been priced out of the most famous grand crus, but they haven’t given up on the wonders that Burgundy has to offer. Here are some underpriced gems in these lesser-known appellations worthy of being hunted down.

Note: 🟥 = Pinot Noir ⬜ = Chardonnay

🟥 Henri et Gilles Buisson 2020, Corton Grand Cru Les Renardes (~£153 / bottle)

Among the plots producing predominately or exclusively red wine in Corton, Dr Jules Lavalle singled out Corton-Renardes and Clos du Roi above the rest, with Chaumes, rated slightly lower.

“Today Les Renardes and Le Clos du Roi can produce spectacular wine,” writes Charlie Curtis MW.

The Buissons have been part of Burgundy’s vine-growing fabric for over 250 years, and mainstays of Saint-Romain since it achieved appellation status just after the Second World War. In addition, they have holdings in those corners of Burgundy considered vineyard nobility: Corton and Corton Charlemagne.

It’s a hard one to find this one in the UK, but it’s available in Europe directly from the producer for €180/bottle. 2020 is one to watch out for once released. Hedonism Wines offers the lesser (and more abundant) 2019 vintage for £182 (not in bond).

Kelley warmly recommends this estate and describes the palate of this wine as “lively and seamless that's deep and elegant, with bright acids, supple tannin and a long, sapid finish.”

⬜ Domaine Dureuil-Janthial 2020, Puligny-Montrachet 1er Cru Les Champs Gains

Vincent Dureuil’s wines are so good; and, while reviews in this publication (The Wine Advocate) may have expedited the inevitable, it was only a matter of time until Domaine Dureuil-Janthial became one of Burgundy's highly allocated producers. The 2020s at this address have turned out predictably brilliant.

This is what Kelley thinks of Dureuil’s work. Tim Atkins MW is also a fan.

And in fact, Vincent Dureuil is one of the leading names in Rully, but he also makes a little bit of very good wine in Puligny-Montrachet, which features very subtle flinty reduction, lees-influenced complexity with layers of aromatic new wood and zesty acidity.

2020 hasn’t been released yet, this is another one not widely available in the UK (and to a certain extent the US). Prices hover below the £100 mark. For now.

A step-up in the same appellation — the Domaine Bachelet-Monnot 2019, Bâtard-Montrachet Grand Cru. Bâtard-Montrachet is a Grand Cru appellation, located within the communes of Puligny-Montrachet and Chassagne-Montrachet.

🟥 Domaine Boris Champy 2020, Beaune 1er Cru Vignes Franches (£60/bottle)

This is an appellation in the Bourgogne Hautes Côtes de Beaune, a 1er Cru appellation called Les Vignes Franches. They are south- and southeast-facing slopes of valleys cut into the limestone plateaus at between 100-200m higher than the Côte de Beaune, which results in slightly later maturing and harvesting on average around one week later. Boris Champy believes in the future of the Hautes-Côtes, particularly thanks to their altitude in the context of global warming.

Boris Champy, originally from Champagne, is one of the newest and most interesting names in Burgundy: having worked as technical director of Napa Valley's Dominus Estate for a decade, he returned to France to take the reins at Maison Louis Latour, and then at Domaine des Lambrays. He took over completely the domaine of biodynamic farming pioneer Didier Montchovet, rebranded it and 2020 is his first vintage. Kelley hails Champy as the new reference point domaine of the Hautes-Côtes.

While one can rest assured of its quality, no historical data is available on this (for obvious reasons).

And from the Côte Chalonnaise…

Not surprisingly, the top wines of the latest Insiders' Burgundy report are outside the Côte D'Or, in the Côte Chalonnaise, from the two best-known appellations of Rully and Mercurey. Kelly explains that they were once so underrated that “they have been the victim of a vicious cycle, whereby negative consumer perceptions impose low prices, encouraging producers to privilege quantity and cash flow over quality, resulting in mediocre wines that reinforce those negative perceptions”.

⬜ Domaine Dureuil-Janthial 2020, Rully 1er Cru Meix Cadot Vieilles Vignes

The first name is the familiar one of Vincent Dureuil aka the Rully superstar. Kelley awarded this wine a 96, two points more than the Puligny-Montrachet and highest-scoring wine of his Insiders' Burgundy report, calling it a “benchmark wine”.

Domaine Bruno Lorenzon 2020, Mercurey 1er Cru 🟥 Pièce 13 (~£100/bottle) and ⬜ Pièce 15 (£73/bottle)

Kelley is smitten with Bruno Lorenzon — yet another “glitch in the appellation hierarchy’s matrix” as he refers to his and the above-mentioned Vincent Dureuil’s wines.

These wines are not merely excellent but also thought-provoking and indeed inspiring.

However, he also notes that the Anglophone press’ near-total silence concerning Lorenzon’s wines points to the reality that “consumers, importers and journalists alike find the appellation hierarchy a convenient crutch”.

You can read the full profile of Domaine Bruno Lorenzon in the Wine Advocate. Kelley believes there’s a clear step-up between the 2007 and the 2012 vintages, with incremental improvements since.

Last year, I wrote that the 2019 vintage might turn out to be the best of Bruno Lorenzon's career to date. Tasting those wines from my cellar, I see no reason to revise that claim—with the sole exception that his 2020 vintage seems liable to be even better!

Both Pièce 13 (Pinot Noir) and Pièce 15 (Chardonnay) have consistently scored 95 and above since that 2012 watershed year, so there’s little reason to stop at the most recent vintages.

I hope some of you manage to grab some of these beauties!

Best,

Sara Danese

In case you missed it…

in the mood for wine

Is high altitude turning Malbecs into Volnays?

My conversation with Luigi Bosca's head winemaker, Pablo Cúneo. He took me on a high-altitude trip around Mendoza. Pablo Cúneo, Head Winemaker at Luigi Bosca winery, grew up in Mendoza, a city surrounded by the sublime landscape of Argentina’s Andes mountains. He graduated in Agricultural Engineering from the Universidad Nacional de Cuyo in 1999 and wen…

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4 years ago · 1 like · Sara Danese

in the mood for wine

Can a bottle of English sparkling wine be worth £195?

In the mood for wine joins the nation in mourning the passing of Her Majesty The Queen. We wish to convey our condolences to the Royal Family at this time of great sorrow…

Read more

4 years ago · 4 likes · 4 comments · Sara Danese

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DISCLAIMER:

My investment thesis, risk appetite, and time frames are strictly my own and are significantly different from that of my readership. As such, the investments covered in this publication and this article are not to be considered investment advice nor do they represent an offer to buy or sell securities or services and should be regarded as information only. 

Share in the mood for wine

The Market Take

📅 Week 42

Inflation (CPI) 12-M to September: 
US +8.20% / UK +8.80% / Euro +10.00%

Interest Rates (Bank Rates): 
US +3.25% / UK +2.25% / Euro +1.25%  

S&P 500 (5D): 
+4.74%

Crude Oil WTI (5D): 
-0.48%

Gold (5D): 
+0.75% 

CBOE Volatility Index VIX (5D): 
-7.28%

US$ Index DXY (5D): 
-1.27%

▪️What happened in the markets last week?

A lot of drama in the UK. The shortest-serving Prime Minister Liz Truss resigned. We had not one, but two (!) former Bank of England governors speaking up against the actions of this government. The latest, Lord Mervyn King, former governor of the Bank of England between 2003 and 2013, came out to say:

Markets are not in charge. Governments and central banks are. Markets respond to the announcements made by governments and central banks. And central banks have lost control of inflation, the government lost control of public finance; not surprising that markets respond to that.

He added, quite succinctly, painting a grim picture:

Public expenditure isn’t going down, if anything it will go up. Therefore taxes will have to rise to fill the gap which is there at present. That doesn’t make a very happy picture for the next few years.

The BOE had to step in, buying bonds, in an attempt to calm the markets; such action goes against the tightening policies (read: raising of bank rates) to rein in inflation. Inflation in the UK rose by 8.8% in the 12 months to September 2022, up from 8.6% in August and returning to July's recent high. On the other hand, retail sales in the UK declined in September for a second consecutive month (-1.4%), a sign that consumers are pulling back on spending.

This morning, the pound gains as Sunak leads the race to become PM.

In the US, stock markets have gained and volatility has come down, taking a respite ahead of the earning season.

Meanwhile, in China, Chairman Xi Jinping secured a third term as China’s leader after a steady drive to consolidate power. The makeup of the Politburo and Standing Committee seems to be turning away from the opening-up policies of the last two decades. As a consequence, China’s yuan weakened and the country’s stocks tumbled in Hong Kong to the lowest level since the depths of the 2008 global financial crisis, a stark rebuke of President Xi Jinping’s move to stack his leadership ranks with loyalists. More on this to come.

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(MoM = month on month)

Livex 50 (MoM): 
+0.3%

Livex 100 (MoM): 
+1.9%

Livex 1000 (MoM): 
+2.1%

▪️What happened in the fine wine markets last week?

Another strong week in the fine wine market. This is very surprising, especially when compared to investor sentiment, which remains at extreme bearish levels, the latest American Association of Individual Investors survey shows.

On Oct. 11, the same day the IMF warned of darker economic clouds on the horizon, the world’s biggest luxury giant LVMH posted sales that beat analyst estimates.

LVMH’s CFO Jean Jacques Guiony explains the "divorce" between global economic fundamentals-sharply rising interest rates, widespread inflation, and looming recession and the resilience of the luxury industry.

"Luxury is not a proxy for the general economy. We end up selling to affluent people and they have behaviour on their own, which is not necessarily totally aligned with economics."

LVMH may not be a proxy for the global economy but it certainly is a proxy for luxury goods. A few key takeaways that might apply to the fine wine industry as a whole:

• Asia, including China, saw slower growth over the first nine months of the year, though growth accelerated in the third quarter due to the easing of Covid-19 restrictions. A recovery in China could come as consumers in the West begin to sober up from the post-pandemic euphoria.

  When it comes to wine, this would translate into a continued focus on Bordeaux and Burgundy to the detriment of Italy, the US and other less established wine investment regions.

  

• Sales at US jeweller Tiffany & Co were slowing in the US. American wealthy shoppers in Europe splashed out on making the most of the strong dollar, to the detriment of local US brands.

  Transliteration of this in terms of US fine wine might be a bit behind the curve. The California 50 posted positive returns: +9.5% year-to-date, and trade hasn’t shown signs of slowing in the last month, posting gains that are only second to Champagne and Burgundy.

  

On another note, the thirst for Champagne seems unquenchable — and Louis Roederer’s Cristal 2014 vintage led as the most traded wine by the value this week, followed by Dom Pérignon 2012 and Jacques Selosse 2008.

Is the market for Champagne over-heated? Is the bubble about to burst? In my piece with Six Atmospheres’ Tom Hewson, we look at the market for Champagne investing:

Six Atmospheres

Is it worth investing in Champagne?

Welcome, bubbleheads. A look at a slightly contentious topic this week : the market for Champagne, with thanks to merchant and investment specialist Sara Danese. Also, a quick note to say that the England Special Report 2022 is finally here! A real labour of love this year, with almost 300 wines tasted, fourteen awards, in-depth analysis and a feature o…

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4 years ago · 2 likes · Tom Hewson

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New Wine Reports

Jane Anson published an AOC review of St Estèphe, on the 2014 and 2016 vintages, which I very much enjoyed reading.

What an odd choice of vintages, I thought. However, Anson explains that, alongside the tasting of one of the most celebrated vintages of the past few decades, 2014 is widely seen to have over-performed specifically in the St Estèphe appellation because of low rain during summer, and a gorgeous late season that was again less disrupted by rainfall here than elsewhere. This benefitted the Cabernet Sauvignon grape in particular.

• St Estèphe is the most northerly of the main four commune appellations of the Médoc and the one with the fewest 1855-classified estates: only five classed growths.

• The clay in the soils is proving a boon in terms of protecting freshness in increasingly hot summers.

  Jane Anson claims that “this just might be St Estèphe’s decade”

• As you would expect, the 2016 is significantly riper as a whole than the 2014, and it is a vintage to buy.

• Montrose was awarded 100 points for their 2016. Other top three estates — Montrose (2nd growth), Cos d'Estournel (2nd growth) and Calon Ségur (3rd growth).

A few wines to consider from the report.

• Château Montrose 2014 (£85 / bottle)

2014s trade at a 40% discount of their respective 2016s. However, it feels justified as they have scored, on average, 2 pts less. If in doubt about which one to choose between Montrose 2014 and Cos d'Estournel 2014 (both second growth), the former scored 97 points (vs. 96 of Cos d'Estournel ) and is priced at a 15% discount.

[The same dynamic appears for the 2016 vintage - but the margin is much lower (<4%).]

• Château Cos Labory 2016 (£21 / bottle)

I am not quite sure if Cos Labory can be viewed as a (good) investment — price of their wines in the last decade seem to be stubbornly hovering around the same £21 / bottle mark.

The one exception, their 2010 vintage seems to have doubled in price to around £40 (but is not available from UK merchants) — because a large part of the sales is direct from the château, in line with their philosophy.

However, it feels a steal for one of the (five) classed-growth estates of the appellation.

This is a definite contender for the most under-the-radar (and best value) of all 1855-classified Bordeaux, and yet it keeps quietly delivering hugely drinkable and enjoyable wines: often far less glossy than its neighbours, and one of the few classified growths to still merit the term ‘old-school’, it has stepped up gears over recent vintages.

While Anson recognises the château may lack consistency at times, she also agrees that 2016 may be the vintage to bet on.

• Chateau Phelan Segur 2016 (£31 / bottle)

In Inside Bordeaux, Anson praises Phelan Segur:

This is a definite star in the appellation, and in my mind would make it into a new version of the 1855 classification in one ever came around (which it won’t!).

As you can see from the Saturnalia map, it is right next to Montrose. Phelan had expanded to 90 hectares but sold a section that was once part of Montrose back to them in 2010.

With a score of 95 points, Anson writes: “Beautiful texture and grip right from the first moment, showcasing why this is one of the best estates in the appellation.”

In addition, she praises the estate’s consistency and character.

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Liv-ex reports an increased appetite for Figeac since their promotion to Premier Grand Cru Classé ‘A’ in the 2022 revision of the Saint-Émilion classification.

I will discuss Figeac in my October Portfolio Update (on 4th Nov) for my Saturnalia model portfolio, as I had added the 2019 vintage ahead of the reclassification.

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After Catena Zapata’s landslide success, especially at the latest release on Place de Bordeaux, Argentina’s Malbecs are now viewed in a different light.

The tiny production (around 400-450 cases) of Catena Zapata Adrianna Vineyard Mundus Bacillus Terrae label has become one of the most prized and collected Malbecs, now sold via the Place de Bordeaux (since 2015) and distributed around the world. Their latest 2019 vintage was awarded 100 points by Jane Anson, and she also nominated it as her one wine to buy.

Laura Catena (the daughter of founder Nicolàs Catena Zapata and managing director of the family estate) shares the secret of their success with Lisa Perrotti-Brown in TWI: her father’s vision.

What my father started was to build around altitude. With higher altitude comes a cooler climate, slower ripening, and lower alcohols because the sugars happen at the same time as the phenolics. The big problem with this is frost. We lose out some of our crop 1 year out of 4. You just have to accept that.

Jane Anson also believes that Catena Zapata’s 100% Malbec wines show the type of longevity we expect from very fine wines (20 years). Lisa Perrotti-Brown, in her latest article, agrees with Anson on this crucial point: tasting Nicolás Catena Zapata and Adrianna Vineyard Malbec with vintages from 1999 to 2015, she points out that the 2015 Adrianna Vineyard Mundus Bacillus Terrae “should cellar gracefully over the next 20+years.“ It scores 97 points, and currently priced at £118 / bottle, which is the most underpriced vintage (compared to £161 / bottle for the 2019).

In addition to tasting their 100% Malbec, Perrotti-Brown evaluates the Cabernet Sauvignon/Malbec blend labels (Nicolas Catena Zapata) going back to 1999. In terms of longevity, the 1999 reached its peak. “It should plateau, remaining like this for 10-12 years, before gradually fading.” The 2004 Nicolas Catena Zapata seems to even beat that, with a long life ahead lasting to 2037. Prices on the back vintages in general seem to have increased — while 2019 and other more recent ones, such as 2016 haven’t moved much since their release price.

On this note, a couple of weeks ago, I had the chance of meeting Pablo Cúneo, head winemaker at Luigi Bosca, one of the most respected and oldest Mendoza producers. I will share my thoughts on Paraíso 2019, their most prized wine and, more generally, on the new-wave Malbecs.

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In case you missed it…

in the mood for wine

WineLeaks #14 - Finding Value in Champagne

This week, we are looking at the Champagne market with Tom Hewson at Six Atmospheres. The Market Take 📅 Week 41 🔴 Markets in a Minute Inflation (CPI) 12-M to September: US +8.20% / Euro +10% Interest Rates (10-Year Treasuries): US +4.024% / UK +4.389% / Germany +2.353…

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4 years ago · 2 likes · Sara Danese

in the mood for wine

Can a bottle of English sparkling wine be worth £195?

In the mood for wine joins the nation in mourning the passing of Her Majesty The Queen. We wish to convey our condolences to the Royal Family at this time of great sorrow…

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4 years ago · 4 likes · 4 comments · Sara Danese

Until Thursday,

In the mood for wine (a.k.a. Sara Danese)

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IG: In the mood for wine

In the mood for wine nor this article represent investment advice or any kind of professional counsel, nor does it represent an offer to buy or sell securities or investment services.

This week, we are looking at the Champagne market with Tom Hewson at Six Atmospheres.

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The Market Take

📅 Week 41

Inflation (CPI) 12-M to September: 
US +8.20% / Euro +10% 

Interest Rates (10-Year Treasuries): 
US +4.024% / UK +4.389% / Germany +2.353%  

S&P 500 (5D): 
-1.55% 

Crude Oil WTI (5D): 
-8.21%

Gold (5D): 
-3.03% 

CBOE Volatility Index VIX (5D): 
+2.10%

US$ Index DXY (5D): 
+0.45%

What happened in the markets last week?

1️⃣ Derivatives markets sent out an ominous signal to investors on Monday, pointing to a persistently volatile stock market for the coming months. Futures contracts tied to the CBOE Volatility Index, or VIX, rose above 30 across the entire term structure, according to FactSet. That's far above the long-term average of 20.

2️⃣ Federal Reserve officials expressed concern at their meeting last month over the persistence of high inflation, underscoring their intention to continue raising interest rates in large steps despite the pain that could cause.

There are two inflation indicators — one, the so-called core consumer-price index—which excludes volatile energy and food prices, rose 6.6% in September from a year earlier, the biggest increase since August 1982, a sign that strong and broad price pressures are persisting. The measure increased 6.3% in August. 

The second one, the overall CPI which includes energy and food prices ticked down to +8.20% (from +8.30% in August).

A hot inflation report would normally push up long-term interest rates and pull down stocks. That's exactly what happened on Thursday morning. But by midday stocks were powering higher, which continued into the afternoon, only to tumble again Friday.

What drove the market's move higher? It's a puzzle.

Some investors say the market’s roller-coaster ride as of late seems like a classic bear-market rally: a case of beaten-down markets temporarily bouncing higher, only to resume selling off. “Stocks have often posted some of their biggest gains of the year in the midst of their worst selloffs, like after the dot-com bubble burst in 2000, in the months before Lehman Brothers collapsed in 2008 and after the start of the Covid-19 pandemic in 2020”, reports the WSJ.

3️⃣ Inventories at general-merchandise stores were at an all-time high in July, up 30% from a year earlier, according to the latest data from the U.S. Census Bureau. What does it mean? Increased inventories are linked to delays in the supply chain—followed by an abrupt improvement—which have meant that “a few seasons” worth of goods are landing in the marketplace at the same time.

While the costs and delays associated with transporting goods have eased, retailers will likely be fighting for a shrinking pie given consumers’ worries over the economy and inflation.

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(MoM = month on month)

Livex 100 (MoM): 
+1.9%

Livex 1000 (MoM): 
+2.1%

Champagne 50 (MoM): 
+3.2%

1️⃣ There doesn’t seem to be an end in sight to how much the Champagne prices are increasing in value. Liv-ex reports that Champagne outperforms mainstream equities — that’s not difficult as the S&P 500 is down 20% year-to-date.

However, that the Champagne market is seeing a virtuous cycle is undeniable. In the last year, as can be observed in the chart from Liv-ex, the top 50 champagnes outperformed even Burgundy for the second year in a row.

Collectors might feel quite nervous, then, about investing in a bottle of Champagne at the moment. Is the bubble about to burst? A looming recession, a panicked stock market, a cold winter ahead of us and a war at the doorstep of Europe – can we expect the Champagne market to continue its run, or to hold its value?  

A few reports below to answer that question, including the one I co-authored with Six Atmospheres’ Tom Hewson.

2️⃣ What are the overvalued Champagne names?

For starter, the back vintages of Salon Le Mesnil-sur-Oger Grand Cru have risen the most (2006 +142.0% and 2007 +140.5%, while the 2004 is up 113.7%).

Louis Roederer Cristal Rosé 2008, that has 100-points from The Wine Advocate’s William Kelley, is up 88.8% over the past two years.

Grower Champagne has joined the hype game, thanks to Kelley, with canny buyers eyeing up the secondary market, spurred on by the astronomical increases in price achieved by the likes of Jacques Selosse, Egly-Ouriet, Ulysse Collin and Cedric Bouchard.

3️⃣ After the Champagne Magnum premium, Liv-ex reports there’s a Rosé Champagne premium.

On average, the 2008 vintage rosés trade at a 96% premium when compared to their white counterparts across the six most-traded houses, with Louis Roederer Cristal’s 100-point rosé, which costs 112.7% more than the white.

However, rosé Champagne prices have only risen 29.0% year-to-date, compared to 52.3% of the benchmark index — the Champagne 50.

A few reasons for this premium could be:

• The production of rosé requires a different winemaking technique from Champagne producers;

• Many of the reputable houses have made investments in the vineyards that supply them with red grapes;

• Volumes are limited, both because of planted red grapes (only 38% of total vineyards are of Pinot Noir) and because of legacy reasons.

However, this will probably reverse: as climate change impacts Champagne, we can expect an increased focus on the production of Blancs de Noirs and rosé Champagnes.

New Champagne Reports

🔴 ‘Is it worth investing in Champagne?’ (Six Atmospheres)

In this piece, Tom and I look at the economic drivers for investing in Champagne. It’s hard to find pockets of value in a rising market – more so than in a down market.

However, market dynamics as well as supply and demand point at staying laser-focused on a few names that can weather the storm of a recession, offering better downside protection with the potential of increasing in value in next five years.

Particularly:

• An economic downturn will likely favour wines with a stable track record, a strong brand recognition and, perhaps more importantly, liquidity to sustain a period of relative instability – all requirements that are met by large Champagne brands.

• Trades on Liv-ex indicate that wine merchants are trading some of these Champagnes at prices that are close to the retail in-bond prices, suggesting perhaps that wine merchants are confident they will be able to shift such wines at increasingly higher prices in the near future.

• It looks like the only vintage since 2013 likely to go down as a classic will be 2019. Perhaps investors know that we may all be feeling a little starved of top vintages in a few years’ time.

Two names which tick all the above criteria are the Dom Pérignon 2012 and Piper-Heidsieck Rare 2008. Read the full thesis here:

Six Atmospheres

Is it worth investing in Champagne?

Welcome, bubbleheads. A look at a slightly contentious topic this week : the market for Champagne, with thanks to merchant and investment specialist Sara Danese. Also, a quick note to say that the England Special Report 2022 is finally here! A real labour of love this year, with almost 300 wines tasted, fourteen awards, in-depth analysis and a feature o…

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4 years ago · 1 like · Tom Hewson

🔴 ‘Champagne vintages to buy now’ (Club Oenologique) by Essi Avellan MW

• Wines from the much-hyped 2008 vintage have largely lived up to their billing. In the shadow of the mighty 2008, neither of the fine vintages of 2012 and 2013 have received the attention they deserve.

• 2012: quite magnificent, a vintage hard not to like in all its powerful, compact fruitiness and energising freshness. It is a vintage that tastes delicious immediately but has all the building blocks of longevity.

• 2013: it sits somewhere in between the concentrated 2012 and the acid-lined 2008, promises tension, acidity and longevity.

• 2014: shows promise but variable (among the great ones: Bollinger’s La Grande Année, which really nailed the year with its minerally elegant and vivacious)

• 2015: was widely declared, a great number of the wines show unripe aromatics characterised by austere vegetal or ashy notes, despite the warm weather.

• 2016: Chardonnay struggled to ripen in the year.

• 2017: harvest spoiled by rains and rot.

• 2018 - 2019 - 2020: return to variable good results.

🔴 ‘What Makes a Champagne Vintage Great? Ask a Deep Learning Model’ (Wired)

Referring back to Bollinger’s La Grande Année 2014, which launched to market this year, Denis Bunner (deputy chef de cave) says the only parameters that really count are those determined in the nose, mouth and … by deep learning.

A decade ago, Bunner began working on a a six-year project to model data from the Bollinger’s Wine Library, a unique collection of vintages going back generations that had been compiled from stock lying for years in the far reaches of the house’s cellars. The reason — climate change, the biggest fundamental risk and something that is already causing noticeable changes in the Champagne industry. 

More than 40 parameters are included in the model, such as:

• historic meteorological data;

• soil;

• plant conditions for each grape variety;

• timings of key seasonal events like de-budding, blossoming, ripening, and harvesting; and

• lab analysis (for factors such as sugar levels and acidity) of grape musts and the wine itself. 

This data can now be correlated against the assessment of Bunner’s tasting notes for a century’s worth of champagne in the Wine Library, effectively a definitive judgment on the quality of each vintage.

“We were looking at the evolution of the vines and the ripening season, segmenting each step to find a correlation between the growing process and the final quality,” says Bunner. “We can see precisely week by week what should be the perfect scenario, and the farther from this you go, the more risk you have.”

Using this model, says Bunner, the strength of a season can be forecasted as they cut the grape during the harvest, adding an element of statistical predictability to what is otherwise a slow, intuitive reveal over months of tastings. It can help with other decisions such as whether to declare a vintage year; whether to make a limited edition if a smaller number of villages perform well; what the blends will be; and—crucially—how well a vintage might age. 

Back to climate change, Bollinger have no shortage of tools with which they can adapt: lowering the sugary “dosage” that is added to each bottle after disgorgement; changing the grape varietals and the rootstock; even the time of day that grapes are picked.

The point of the data model, he says, is to pinpoint the events that most clearly impact the quality, in order to make the best adaptations.

The next step is to apply the learning to seasons in real time, as decisions are made over the management of the vineyards themselves.

🍾

Until next Monday,

In the mood for wine (a.k.a. Sara Danese)

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In the mood for wine nor this article represent investment advice or any kind of professional counsel, nor does it represent an offer to buy or sell securities or investment services.

You can find all the links to this newsletter’s past editions on this page.

Liv-ex reported this week that Italy’s trade share has declined and activity has become more focused on a few key labels mostly from Tuscany. In a contrarian fashion, this week, I am sharing with you some of my favourite Barolos.

Originally I wanted to do both Barolos and Barbaresco, but in the end, I think Barbaresco requires its own dedicated Edition. Stay tuned! And if you are not subscribed yet, you can join here to receive these weekly updates straight to your inbox.

Don’t forget to share it and hit the heart button if you like today’s newsletter and reply with any feedback.

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The Market Take

📅 Week 40

Inflation (CPI) 12-M to September: 
Euro +10%

Interest Rates (Bank Rates): 
US +3.25% / UK +2.25% / Euro +1.25%  

S&P 500 (5D): 
+1.51%

Crude Oil WTI (5D): 
+16.88%

Gold (5D): 
+2.01% 

CBOE Volatility Index VIX (5D): 
-0.82%

US$ Index DXY (5D): 
+0.56%

What happened in the markets last week?

The US government’s latest jobs report showed the labor market remained strong, employers adding 263,000 jobs in September, the US Labor Department said, slightly less than economists had expected and with unemployment rate falling to 3.5% (from 3.7%), returning to a multidecade low.

That’s great news, of course.

However, the market was hoping that a disappointing reading might slow the pace at which the Fed is raising interest rates to curb inflation. Willem Sels, chief investment officer at HSBC Global Private Banking, pointed out: ‘It’s the interest-rate outlook determining the equity market, and the key to the interest-rate outlook is the labor market.’

The interest rate outlook also determines the strength of the US$. The U.S. dollar’s surging value relative to the euro, the Japanese yen, the British pound and other currencies (see DXY Index above) is making foreign-made goods cheaper to import, while exports of U.S.-made goods grow more expensive for foreign buyers.

While the Sterling collapse was short-lived, bouncing back to after Chancellor Kwasi Kwarteng’s U-turn, the medium-term trend still persist given the interest rate differential between the US and the UK (and most of the rest of the world).

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(MoM = month on month)

Livex 50 (MoM): 
+0.8%

Livex 100 (MoM): 
+1.9%

Livex 1000 (MoM): 
+2.1%

1️⃣ Liv-ex reported that the fine wine markets bounced back in September, finishing +2.1% thanks to the last week’s opportunistic trading, boosted by the weakness of Sterling.

2️⃣ Napa Valley wines have performed extremely well in the past two to five years, finishing second only to Burgundy and Champagne.

However, as US$ strenght is here to stay, exports of U.S.-made goods grow more expensive for foreign buyers. As foreing buyers account for more than half of the total US fine wine trade share (and UK demand is particularly strong), we could be seeing a nose-dive in returns there.

Not only that, but US buyers might prefer foreing wines as they have become 15-20% cheaper than a year ago, so they might opportunistically steer away from local products.

3️⃣ Italy has seen a steady decline in traded volumes, reports Liv-ex, “from an 8.8% market share in 2019, it jumped to 15.1% in 2020 and 15.4% in 2021. However, so far this year, total trade is down to 11.8% and the country’s monthly share of trade has been trending downwards since May.”

As Italy’s trade share has declined, activity has become more focused on a few key labels mostly from Tuscany which has accounted for 57.7% of Italy’s trade so far this year. As reported in August, the Super Tuscans are the key drivers of the Italy 100 index at present.”

Instead of always looking at the winners, I thought it would be an intellectually stimulating excercise to look at the biggest “losers“ in the Italy 100 index YTD and see if there’s anything that could be an interesting buy.

A word of warning. I’ll focus on Barolos, I am afraid.

Firstly, Tuscan “superstars” already enjoy coverage and a level of brand recognition that can hardly be matched and fear that adding anything to that will fall into the cliché or worse, boring.

(Though, last week I pointed at Isole e Olena Cepparello, 2019).

And also, I’ve recently attended a day organised by Langhe Vini, the wine association for Barolo & Barbaresco wines at 67 Pall Mall. Sandro Minella took us through the history and geology at the heart of these two fascinating Italian wines and, with Filippo Bartolotta, they guided through the tasting of 15 wonderful Nebbiolos.

Barolo & Barbaresco Academy - London

8.49MB ∙ PDF file

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Barolo & Barbaresco Academy (27-28-29 Jan.23). For info: https://www.langhevini.it/en/consortium-events/barolo-barbaresco-academy/

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Wines left to right:

1. Diego Morra - Langhe Doc Nebbiolo 2020

2. Livia Fontana - Langhe Doc Nebbiolo 2020

3. Cantina del Nebbiolo - Nebbiolo D'alba Doc Vigna Valmaggiore 2020

4. Massucci - Nebbiolo D'alba Superiore Doc 2019

5. Nada Giuseppe - Barbaresco Casot Docg 2019

6. Pasquale Pelissero - Barbaresco Bricco San Giuliano Docg 2019

7. Cecilia Monte - Barbaresco Serracapelli Docg 2018

8. Adriano Marco e Vittorio - Barbaresco Basarin Docg 2018

9. Domenico Clerico - Barolo Docg Del Comune Di Monforte d’Alba 2018

10. Tenuta Cucco - Barolo Docg Del Comune Di Serralunga d’Alba 2018

11. Silvano Bolmida - Barolo Docg Bussia Vigna Dei Fantini 2018

12. Palladino - Barolo Docg Ornato 2018

13. Cavallotto Tenuta Bricco Boschis - Barolo Docg Bricco Boschis 2018

14. L‘Astemia Pentita - Barolo Docg Terlo 2017

15. Aurelio Settimo - Barolo Docg Riserva Rocche dell’Annunziata 2016

Wines Barolo & Barbaresco Academy - London

8.49MB ∙ PDF file

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Barolo & Barbaresco Academy (27-28-29 Jan.23). For info: https://www.langhevini.it/en/consortium-events/barolo-barbaresco-academy/

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More info about their next Barolo & Barbaresco Academy (27-28-29 Jan 2023) and on 28th October 2022 they organised a charity event called Barolo En Primeur in collaboration with Christie’s.

Among the Liv-ex biggest ‘losers’, the first (and only) interesting Barolo:

▪️ Giacomo Conterno Monfortino Barolo Riserva DOCG 2001 (£950/bottle)

This is the second worst performer in the Liv-ex Italy 100 (see above).

2001 was an outstanding vintage in Barolo, that yielded fabulous wines. Initially closed, now they are bold, structured and well balanced. And among those wines, you can count the Giacomo Conterno Monfortino Barolo Riserva.

Why is it interesting?

Cheap, it is not. But cheaper, when compared with 2010, which is going for £1500/bottle.

Critics can’t seem to agree on how good the 2013 vintage was in Barolo.

Gambero Rosso gives it a 5 out of 5 — a score reserved for the epic 1996, 2001, 2010 and 2016 vintages.

Walter Speller titles his Jancis Robinson vintage review article “2013 Barolo – another great vintage?”.

I cannot help but notice that the question mark in the title weakens the positive remark.

In it, he says: “the 2013 Barolo has turned out to be a classic in the making. Loaded with firm but tactile and wonderfully textured tannins and at times super fresh due to the high acidity, the wines have an elegance that defies their estimated 14.5% alcohol. Some are a triumph for a vintage that initially got off to a less than ideal start.”

Looking at Saturnalia data, we can clearly see what he meant by “less than ideal start” — heavy rains in winter.

He concludes with a glowing remark: “I would invest in this vintage, […]this vintage really gives the Barolo lover something to chew on, with tannins playing up right now, but the wines certainly have a complex core.”

Kerin O’Keefe, in her preview tweet, can’t hide her enthusiasm. (I spent hours on Thursday trying to find the full review, to no avail 😭).

Others, on the other hand aren’t as positive. Hugh Johnson rates it as a 6-7 (while 2010 and 2016 are 8-9) and The WineEnthusiast a 94 (2010 is a 98 and 2016 a 99).

Inevitably the question is — which past vintage 2013 most resembles was raised. Valter Fissore of the Elvio Cogno estate in Novello told Speller his 2013s reminds him of the exceptional 1999s.

Speller concludes: “the 2013 Barolos are all about tannins and acidity, Nebbiolo’s hallmark and difficult to get right, which many palates might find a little too austere right now. Yet their complex perfumes combined with a persistent, long finish indicate that cellaring is a prerequisite which will no doubt pay off.”

Looking at Saturnalia weather data, diurnal range was similar to that of 2016, except for the month of October, when picking starts. And growing days, again showing that during the last trimester before harvest, 2016 benefitted from more warmth. Lastly, referring to the above chart — October 2013 was wetter, signalling that there might have been a little more dilution than in 2016.

I’d like to think of Barolo 2013 as an excellent vintage, not as consistently outstanding as 2016 or 2010 out of the past decade perhaps, but nontheless a vintage that had the potential to produce exceptional wines.

Below are three examples of great value to be found in the 2013 vintage.

▪️ Bartolo Mascarello Barolo DOCG 2013 (£308/bottle)

The Mascarellos are one of the few grower-producers in Barolo since the 1920s, an era when a dozen or so large vinification houses dominated Barolo production and farmers sold their grapes. With vineyards in key crus — Cannubi, San Lorenzo, Rué and Rocche, they make only one Barolo with blended Nebbiolo from their four crus. Despite a strong demand for excessive extracted, concentrated Barolo reeking with expresso and oak, Bartolo quite famously stood his ground on a decidedly non-interventionist approach in the vineyard and the cellar, and aging his Barolos in traditional botti (not barriques!)

Why is it interesting?

Great vintages such as 2010 and 2016 currently trade at £500 and £470/bottle respectively. What’s more, 2013 is trading at the same price of a lesser, wetter vintage such as 2018 (£292/bottle).

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▪️ Giuseppe Mascarello & Figlio Monprivato Barolo DOCG 2013 (£140/bottle)

From one loved Mascarello to another.

Linked to the Monprivato vineyard, located in the village of Castiglione Falletto, which he is able to express in a prodigious way, Mauro Mascarello’s wines are considered masterpieces.

Why is it interesting?

Kerin O’Keefe describes it as “elegant and fragrant, this radiant wine opens with classic Nebbiolo aromas of forest floor, crushed herb, dried rose, wild berry and a whiff of new leather. The focused, ethereal palate sneaks up on you, offering red cherry, spiced cranberry, wild strawberry and licorice alongside firm, refined tannins. Bright acidity lends balance, energy and tension. It's still youthfully austere so give it time to develop even more complexity. Drink 2023–2033. 97 points.“

Monprivato’s 2013 vintage is currently sold at a £40 discount from 2016. However, if you want to move up the ladder, Ca d'Morissio is a legend — “the quintessence of fine wine“, says Daniele Cernilli in his “The Essential Guide to Italian Wine 2022“.

Giuseppe Mascarello e Figlio Barolo Riserva Ca d'Morissio 2013 goes for £350/bottle while the 2010 is priced at £515/bottle.

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▪️ Massolino Vignarionda Barolo Riserva DOCG 2013 (£115/bottle)

There is no end to the complexity of Italian appellations. But this one is worth knowing. Vignarionda is one of the most sought-after crus in Serralunga d'Alba, an exceptional place where Barolo expresses itself in a unique way. The Vignarionda cru in Serralunga d'Alba is measured at about ten hectares, and eight single-vineyard wines claim this provenance. Massolino counts a quarter of that total, making this estate the biggest landowner in Vignarionda.

Why is it interesting?

Kerin O’Keefe awarded it 97 points, and writes: “Hailing from one of the most celebrated vineyards in the entire denomination, this focused beauty boasts layers of complexity and depth, starting with its classic Nebbiolo aromas of forest floor, new leather, violet and wild berry. Balanced and firmly structured, the palate shows tension, power and elegance, delivering succulent Morello cherry, crushed raspberry, tobacco and licorice alongside firm, aristocratic tannins. It's still young but already beautifully balanced, with bright acidity. Drink 2023–2053.”

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Is there any value left in 2016 Barolos? I think so.

▪️ Paolo Scavino Bric del Fiasc 2016 (£90/bottle)

I couldn’t find the 2010 in the UK — a wine of which Kerin O’Keefe said: “If a wine can truly be perfect, this is it.”

Why is it interesting?

The closest vintage to 2010 is 2016, available at BBX for under £100. Awarded a 98 by O’Keefe, it was accompanied by these words: “What a gorgeous showing. It opens with heady aromas of menthol, forest berry, iris and new leather while the enveloping, full-bodied palate delivers raspberry compote, ripe Marasca cherry, licorice and baking spice before a minty finish. Enveloping, fine-grained tannins and fresh acidity provide perfect balance. Thanks to the ripe, juicy fruit, you'd never guess this had an abv of 15%. Drink 2023–2036.“

If this isn’t a bargain...!

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▪️Elvio Cogno Barolo Vigna Elena 2016 (£134/bottle)

Why is it interesting?

Awarded 100 points by Kerin O’Keefe, this is a top wine from a top vintage at a very cheap price. For comparison, Roagna La Pira Vecchie Viti 2016, also awarded 100 points by Kerin O’Keefe, goes for £316/bottle.

Her notes: “This breathtaking beauty offers enticing scents of rose petal, ripe woodland berry, pipe tobacco and camphor. It’s full-bodied but elegantly structured, delivering delicious flavors of ripe red cherry, blood orange, licorice and baking spice. Taut, refined tannins provide the framework while bright acidity gives it wonderful balance, energy and tension. Drink 2026–2046“

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In the meantime, I am looking forward to the release of 2019, which promise to be another great vintage.

in the mood for wine

Can a bottle of English sparkling wine be worth £195?

In the mood for wine joins the nation in mourning the passing of Her Majesty The Queen. We wish to convey our condolences to the Royal Family at this time of great sorrow…

Read more

4 years ago · 4 likes · 4 comments · Sara Danese

in the mood for wine

WineLeaks #12

Welcome to In the mood for wine — a weekly newsletter on wine for the next gen of wine lovers and investors. This is WineLeaks, a curated overview of the wine market, which will be with you every Monday at 10 a.m. (London time). You can find all the links to this newsletter’s past editions on…

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4 years ago · 3 likes · Sara Danese

Until next Monday,

In the mood for wine (a.k.a. Sara Danese)

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IG: In the mood for wine

In the mood for wine nor this article represent investment advice or any kind of professional counsel, nor does it represent an offer to buy or sell securities or investment services.

You can find all the links to this newsletter’s past editions on this page, and, in case you missed it, a much-debated piece on Gusbourne’s ambitious wine Fifty One Degrees North.

Many thanks to those that filled in the survey last week. In line with what you’ve asked for, I’ve added a few more “interesting wines” that come out of the wine reviews of the week, namely Vieux Château Certan 2012, Château Larcis Ducasse 2020 and Isole e Olena Cepparello 2019 among others.

If you are new, you can join here and receive these weekly updates straight to your inbox. Don’t forget to share it and hit the heart button if you like today’s newsletter and reply with any feedback.

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The Market Take

📅 Week 39

🔴 Markets in a Minute

Inflation (CPI) 12-M to September: 
Euro +10% (up from 9.1% in August)

Interest Rates (Bank Rates): 
US +3.25% / UK +2.25% / Euro +1.25%  

S&P 500 (5D): 
-2.91%

Crude Oil WTI (5D): 
-0.66%

Gold (5D): 
0.39%  

VIX (5D): 
5.68%

What happened in the markets last week?

1️⃣ US$-based investors took advantage of Sterling weakness, (US$1.04 to the pound) over last weekend (23rd-26th Sep). US buyers more than doubled their trading share, to 39.1% of total trades compared with 16.9% of the previous weekend. Bordeaux ‘on’ vintages took the lead.

That was to be expected.

More unexpected was the Asia market: its shares didn’t moved much.

In Asia, several currencies such as the HK$ are tied to the US$, but that didn’t seem to increase the appetite in the short term.

While the Sterling has been an all-encompassing saga in the news last week, the pound is far from the only currency wilting against the dollar.

And, staying in Asia, the Chinese renminbi touched the 7.25 per dollar mark, its weakest level since early 2008, suggesting that perhaps we shouldn’t expect much activity from Asia after all.

Burgundy, tipically the Asian buyers’ favourite region, was lagging. 

All in all, US$ strength, not Sterling weakness, could be the dominant theme in the next year in fine wine markets. Liv-ex reported that the US is around 15-20% of the total trade value, allowing a large room for increase of that share.

However, having noticed some opportunistic reports in the market hailing that “fine wine can perform during sterling slumps“ or “fine wine as a potential hedge against ongoing GBP weakness“ — I would caution against drawing correlation (or worse, causation) between GBP weakness and burgeoning fine wine prices.

2️⃣ Saying that the there has been volatility in the markets last week would be an understatement.

Volatility is a statistical concept and is often associated with big swings in either direction: when an index rises and falls more than 1% over a sustained period of time, it is called a "volatile" market. Volatile assets or market are often considered riskier than less volatile ones because the price is expected to be less predictable.

There are many ways to calculate volatility — and among those, VIX (also known as the fear index) is a widely used tool measuring the 30-day expected volatility of stock market.

A high reading on the VIX implies a risky market and, while long-term investors are best advised to ignore periods of short-term volatility, it keeps a finger on the pulse of the market nervousness.

Liv-ex reports that fine wine has traditionally proved a stable and far less volatile life raft than traditional stocks and equities in troubled economic waters.

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🔴 Wine Market Update

(MoM = month on month, i.e. the change in the value as a percentage of the previous month's value.)

Livex 50 (MoM): 
+1.7%

Livex Movers: 
Pétrus, 1999 
Dom Pérignon, 2012
Château Lafite Rothschild, 2018
Château Lynch-Bages, 2010
Château Lynch-Bages, 2009 

This week increased trading activity driven by US buyers was accompanied by a heightened demand for ‘on’ vintages of classed growth Bordeaux, such as 2009, 2010, 2016 and 2019. 

A higher demand for ’on’ vintages could be associated with a risk-off environment — and in particular in light of what we mentioned above with regards to the VIX.

▪️ Château Lynch-Bages, 2016 (£107/bottle)

Fifth Growth Château Lynch-Bages has been popular. The estate even led total trade by volume in the past week. On average, Lynch-Bages prices have risen 19.5% over the last year, compared to 17.6% move for its parent index, the Left Bank 200. The two ‘on’ vintages of Château Lynch-Bages, the 2009 and 2010, continued to enjoy increased demand. 

However, as far as ‘on’ vintages, the 2016 peaked my interest.

Why is it interesting?

Jane Anson tasted it recently and upgraded her Decanter En Primeur score from 95 to 99 points.

Particularly when compared to the 2009 vintage — it’s more scarce and enjoys a higher average score among critics.

Blend: 75% Cabernet Sauvignon, 19% Merlot, 4% Cabernet Franc and 2% Petit Verdot

Drinking window: 2016-2046

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New Wine Reports

🔴’2012 Bordeaux 10-Years-On Retrospective’ (TWI)($)

Lisa Perrotti-Brown finds 2012 a challenging year that tended to favor Merlot.

Late spring rains caused uneven ripening and mildew early in the season. Mid-July is when the dry weather and heat finally kicked in. Autumn rains plagued the Cabernet harvest with around 100mm in the Médoc, causing dilution and forcing hands.

“2012 is what I like to call a trick-or-treat vintage—there are lots of treats, but there are also a few scary tricks” she writes: “many of the top wines are mature now and won’t last much more than another 10 to 15 years. Some less successful wines are already starting to fade.”

Some standouts in the cellar-worthy category include:

1. Petrus (98)

2. La Mission Haut-Brion (98)

3. Vieux Château Certan (98)

4. Haut-Brion (97)

5. Léoville Las Cases (97)

6. Cheval Blanc (96)

“As for Sauternes and Barsac, this was an even more challenging vintage than usual. This was the year that Yquem, Raymond Lafon, Rieussec, Suduiraut, and a few others decided not to make anything.”

▪️ Vieux Château Certan, 2012 (£152/bottle)

Among the ones getting special mention from Perrotti-Brown, Haut-Brion and Léoville Las Cases were mentioned in WineLeaks #6 as among two of the most underpriced châteaux in the analysis run by Quantian. So let’s look at Vieux Château Certan.

Why is it interesting?

Vieux Château Certan is, to me, a pure value play — underpriced, forgotted vintage. It received high praises from Perrotti-Brown MW and also from Sebastian Payne MW, who upgraded Jane Anson’s En Primeur score at the most recent tasting to 97 and said: “Still improving“. Jancis tasted it blind and awarded it 19.24 “because of five 20/20s”.

Perrotti-Brown awards this wine not only a higher score but also a wider drinking window than Jane Anson does, who believes it will peak in 2038.

Blend: 87% Merlot, 12% Cabernet Franc, and 1% Cabernet Sauvignon

Drinking window: 2022-2049

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🔴‘For many years, Château Larcis Ducasse had been an underachiever.’ (TWI) ($)

In Inside Bordeaux, Jane Anson writes: “This is one of my tips for fastest-rising estates, really delivering exciting wines with something to say.“

TWI explains: “owned by Famille Gratiot-Attmane, in 2002, Jacques-Olivier Gratiot hired Nicolas Thienpont to take over the management of the estate, working with David Suire as the technical director. Stephane Derenoncourt and his colleague Julien Lavenu were also brought in as consultant enologists. Together, they conducted extensive soil and vineyard studies to understand the place’s needs and adapt practices. At last, a team of worthy adversaries was in place, armed with the necessary know-how and means to take on Bordeaux’s capricious climate, to take the terroir of Larcis Ducasse to the limits of what it could do.“

The Château is a 1er GCC B since 2012 and the plantings are roughly 83% Merlot and 17% Cabernet Franc.

▪️Château Larcis Ducasse, 2020 (£55/bottle)

Among all their vintages, 2020 stood out.

Why is it interesting?

It has received raving reviews: 99 points from TWI and 97 from Jane Anson, who writes of the 2020 vintage for Decanter: “great consistency over the past few years at this property but this is really stepping things up a level.”

It's another value play — completely underpriced compared to other similarly-scoring vintages (e.g. 2010) and to other 1er GCCs B (e.g. Troplong Mondot).

Two other vintages to consider: 2016 and 2019.

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🔴’Under the Tuscan Sun’ (TWI) ($)

Susan Hulme MW selects her top 25 wines from her extensive report covering Tuscany, released or about to be released onto the market or via the Place de Bordeaux.

Reminding ourself about the 2019 vintage in Tuscany, Ornellaia and Masseto Estate Manager Axel Heinz notes: “We had a very cool spring in 2019 and almost as much rain as 2018. The biggest difference between the two years is that summer was much drier in 2019. We saw good diurnal shifts leading up to what was a late harvest (see Saturnalia chart below: warmer daytime temperatures help to foster sugar development, but cool nights help to preserve aromas, freshness and acidity). For example, we did not have to rush to pick the Merlots, as we often do. Harvest was a week later than 2018.”

▪️ Isole e Olena Cepparello, 2019 (£80/bottle)

Hulme writes: “The reviews feature some of the famous names and Tuscan “superstars,” but there are also, I hope, one or two surprises”. Indeed Cepparello is among these.

Why is it interesting?

It got 100 points, head-to-head with the Super-Tuscan icons Sassicaia, Ornellaia and Masseto. “For me,” explains Hulme ”a 100-point wine is as close to perfect as it is possible to be with that variety or varieties in that particular vintage. It is, of course, a wine that should have concentration and depth of flavor, but it is also very much about finesse and elegance.”

Also, Paolo di Marchi left the reigns of the business, which has recently been acquired by the EPI Group, owners of Charles Heidsieck champagne and Biondi-Santi in Montalcino. We can expect a higher focus on brand-development by the group.

Cepparello 2019 is a blend of Sangiovese from different vineyards, selected by Di Marchi on the basis of "the best exposure, elevation, soil, genetics and age”.

The price is still around £80, at a heavy discount from the Super-Tuscan icons, but with intersting prospects. Please note that it could be classed as a “Chianti Classico” — but for legacy reasons (in 1980s, 100% Sangiovese was not permitted under the Chianti Classico rule), continuity or for branding strategy, Cepparello is a Toscana IGT.

🔴 ’The Champagne Report 2022: Part One’ (Club Oenologique) and ’Champagne: The growing secondary market for luxury’ (Livex)

Two champagne reports came out this week: one from Liv-ex and one from Club Oenologique, authored by Essi Avellan MW.

You can expect my comments regading those reports in two weeks’ time, when “In the mood for wine“ will release a piece on Champagne Investing written in collaboration with “Six Atmospheres”.

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Until next Monday,

In the mood for wine (a.k.a. Sara Danese)

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IG: In the mood for wine

In the mood for wine nor this article represent investment advice or any kind of professional counsel, nor does it represent an offer to buy or sell securities or investment services.

If you are new, you can join here. Please hit the heart button if you like today’s newsletter and reply with any feedback.

You can find all the links to this newsletter’s past editions on this page, and, in case you missed it, a much-debated piece on Gusbourne’s ambitious wine Fifty One Degrees North.

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The Market Take

📅 Week 38

🔴 Markets in a Minute

Inflation (CPI) 12-M to August: 
US +8.30% / UK +8.60% / Euro +9.1%

Interest Rates: 
US +3.25% / UK +2.25% / Euro +1.25%  

S&P 500 (5D): 
-4.65% 

Crude Oil WTI: 
-6.99%

Gold (5D): 
-1.33%  

VIX (5D): 
13.76%

The biggest market news of last week was the collapse of the British Pound (£) following the announcement of fiscal changes by Chancellor Kwasi Kwarteng — the move amount to the biggest tax cut programme since 1972, in an effort to boost UK economic growth. The markets seem to find this economic plan unconvincing, suggesting that any cyclical support for the currency from the fiscal impulse is being out-weighed by concerns over the sizeable burden these plans will put on government finances.

On 20th Sept, the Federal Reserve (the US Central Bank) has demonstrated the most aggressive monetary policy — declaring war to inflation. USD ($) strenght is a direct consequence of this policy. An increase of the federal funds rate by 75 basis points to 3% to 3.25%. The Bank of England followed suit, adding 0.5 percentage points to the bank rate, to 2.25%.

Gold has always been considered the ‘safe haven‘ during inflationary periods and of market uncertainty. For all its complexities, what gold likes is a weak dollar, turmoil, and lower interest rates. Falls in the greenback mathematically raise the price of dollar-denominated commodities. Turmoil makes investors head for safe-haven assets, of which gold is by far the most long-standing. Lower rates reduce the appeal of its main competitor as a haven, yield-producing government debt.

However, when faced with aggressive interest rates rises and strong USD ($), investors fled gold. The CFTC reports that hedge funds and money managers have turned net bearish on gold.

Why does it matter for the fine wine market?

▪️Weakness in both GBP (£) and EUR (€) makes fine wine more attrative to dollar-denominated investors.

This translates in good news for 30% of readers of this newsletter (those US-based…) — if you are earning in USD ($) fine wine has become 15.9% cheaper than it was at the beginning of this year. In addition, your current fine wine stock has appreciated by the same amount!

Meanwhile, as we can see from the chart above, sterling is at a loss against both USD ($) and EUR (€), making fine wine less competitive for UK-based collectors and investors.

▪️Gold is both a ‘safe haven’ and a commodity. Physical assets, such as fine wine, can be good ‘inflation hedges‘ because their prices increases with inflation — but not such great 'safe havens’. That’s why, when trying to understand how fine wine prices will behave, it’s more helpful to look at silver. Silver has many industrial uses, accounting for more than half of annual demand worldwide. This means that economic growth can affect silver prices far more than it affects gold and that’s why it’s a better indicator of how fine wine (a notoriously cyclical commodity) is expected to move.

That being said, investors have reduced both their silver and gold have positions since April 2022.

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🔴 Wine Market Update

(MoM = month on month, i.e. the change in the value as a percentage of the previous month's value.)

Livex 100 (MoM): 
+1.3%

Livex 1000 (MoM): 
+0.1%

Champagne 50 (MoM): 
+2.1%

Right Bank 50 (MoM): 
+2.0%  

There doesn’t seem to be an end in sight to how much Burgundy names are increasing in value. While some names rallied as much as 33% MoM (Domaine Leflaive, Batard-Montrachet Grand Cru, 2014), the Burgundy 150 finished flat (MoM). Liv-ex has recently published the regional buying habits in the secondary market— and, when compared to 2019, Asia has decreased the share of Bordeaux from 66% of the market in 2019 to 36% year-to-date, in favour of Burgundy up from 16% to 37%.

Champagne continues to be unstoppable. Louis Roederer, Cristal, 2013 was the top performer of the month, followed suit by Cristal Rose, 2012.

Bordeaux’s right bank is still riding the wave of the St-Emilion reclassification, though Ausone and Cheval Blanc are dominating. In Pomerol, Lafleur is rising (2013, +26.7%, 2016, +18.7% and 2010, 13.2%), perhaps playing catch up with its neighbour Petrus. Lafleur doesn’t reach quite the same heights on the secondary market as Petrus. It could be because Lafleur doesn’t sell through the usual négociant system of Bordeaux, instead choosing to keep distribution controlled, selecting the importers for different markets to ensure they stay as close to the end consumer as possible.

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Wine Offers

🔴 ‘The Treasury: Finest Wines from a Peerless Collection’ (christies.com)

On 29th September at 10.30 am, Christie’s will hold in London an auction called The Treasury. “This impeccable collection has been collated by a wine lover over many years from merchants and auction houses.”

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New Wine Reports

🔴’2005 Retrospective: extraordinary quality’ (janeanson.com)($)

Back in August, The Wine Independent published the first piece of the “Retrospective“ series, authored by Lisa Perrotti-Brownn MW, which can be found in WineLeaks #3, regarding the 2005 vintage.

Jane Anson released her views on the same vintage — with two 100-score wines (Château Haut-Brion and Château Mouton Rothschild), but more interestingly, her ‘one wine to open now’, with a shortlist that included Malescot Saint Exupéry (95), Issan (96), Calon Ségur (96), Montrose (98) and Domaine de Chevalier (97).

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Feedback

🔴 What do you think of this new format?

Your opinion matters to me!

If your thoughts aren’t reflected in the options below, please hit the reply button or contact me at inthemoodforwine@substack.com.

(Also you can always ping me at that email address with any other message — of wine news, your work, progress or even to reach out for assistance! Happy to help and always happy to have a chinwag about🍷!)

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Until next Monday,

In the mood for wine (a.k.a. Sara Danese)

New? Sign Up Here

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IG: In the mood for wine

In the mood for wine nor this article represent investment advice or any kind of professional counsel, nor does it represent an offer to buy or sell securities or investment services.

If you are new, you can join here. Please hit the heart button if you like today’s newsletter and reply with any feedback.

You can find all the links to this newsletter’s past editions on this page, from a special edition dedicated to tech and NFTs in fine wine, to the St-Emilion reclassification and on the topic of wine liquidity.

Beyond Bordeaux

The Place de Bordeaux, Bordeaux’s historical merchant network of buying local wines and selling them throughout the world, is evolving. In a nutshell, it’s gone global. While spring is still the big Bordeaux en primeur sales period, September has become the month for La Place de Bordeaux to feature bottled wines from beyond Bordeaux, with select négociants offering new releases from their growing lists of international suppliers. This year sees releases of wines from Argentina, Australia, Austria, Chile, China, France, Hungary, Italy, Spain, South Africa, and the USA.

Reviews from Decanter ($), TWI ($) & Jane Anson ($).

The most talked-about releases are:

🔵 Opus One 2019 (Liv-ex) 🔵 Inglenook Rubicon 2019 (Liv-ex) 🔵 Masseto 2019 (Liv-ex) 🔵 Joseph Phelps Insigna 2019 (Liv-ex) 🔵 Solaia 2019 (Liv-ex) 🔵 ”Ex-cellar stock of Château d’Yquem 2016 released” (Liv-ex)

🔵 Other Releases on Liv-ex

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Other Wine Releases

🔵”New Château Latour 2010 stocks released onto market” (Liv-ex)

Château Latour left the en primeur system in 2012 (Decanter) and 2011 was their last vintage released en primeur. However, the Pauillac-based First Growth Château had been reducing the amount of wine sold en primeur since early 2000s, building up supplies in anticipation of this strategy.

This news was not well received by most négociants, who had bought vintages of Latour in good faith en primeur, not knowing that they will then have to compete against releases from the château itself.

And last week, they have launched more cases of their lauded 2010 vintage from the estate's cellars with a release price of €1,050 (£920) per bottle ex-Bordeaux, now on BBX at £1,083 or on LiveTrade at £1,050.

As per Liv-ex chart below, this new “ex-cellar tranche is around 3.2% more expensive than previously released stock currently available on the market, which buyers might consider this a small price to pay for provenance and perfection.”  

Both 2009 and 2010 received glowing reviews from wine critics, including 100-points from The Wine Advocate. And perhaps because of their high release price, the market doesn’t seem to be convinced there is much more price potential.

Château Latour, 2010 vintage

Reserves of the 2010 vintage are particularly low. The chart below accounts for merchant’s stock. However, because of their release policy, it’s unclear whether there is much more in store at the château’s.

Château Latour

Back in 2012, Latour motivation for leaving the en primeur system was partly a response to the increasing desire of consumers for ready-to-drink wines that have been stored in optimal conditions, and partly to be able to offer vintages to the market over a longer period of time.

Looking at the chart of the 2000 vintage (but the same trend can be observed for all the vintages up to 2008), there is a marked price jump at the time of bottling, 2 years after en primeur. By delaying its release, and bearing the cash flow risk, Latour is able to pocket that profit.

Château Latour, 2000 vintage

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🔵“Can a bottle of English sparkling wine be worth £195?” (In the mood for wine)

This article sparked a little debate on Reddit.

The main point raised was: do you think that Fifty One Degrees North is better than Krug or Dom Pérignon? Why didn’t you delve into the quality of this wine more?

The reason why I metioned its quality only in passing (and yes, I did find it impressive!) is because I think that’s only secondary to its 'worth'.

From an investment point of view, I believe that the supply / demand dynamics mentioned in the article are enough to support such pricing and appreciation in the near future. Supply is constrained. It’s so constrained that demand already exceeds supply — without even accounting for quality.

I’d love to hear your opinion! Please let me know in the poll or share your thoughts in the comments.

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Until next Monday,

In the mood for wine (a.k.a. Sara Danese)

New? Sign Up Here

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IG: In the mood for wine

In the mood for wine nor this article represent investment advice or any kind of professional counsel, nor does it represent an offer to buy or sell securities or investment services.

If you are new, you can join here. Please hit the heart button if you like today’s newsletter and reply with any feedback.

Subscribe now

You can find all the links to WineLeaks’ past editions on this page, from a special edition dedicated to tech and NFTs in fine wine, to the Saint-Emilion reclassification predictions and on the topic of wine as inflation-hedge.

7th Saint-Emilion Classification 2022

🔴 PR release

Total number of applicants

Unconfirmed — Jane Anson estimates 140, Club Oenologique 114. The guess-timate for the 2012 reclassification is 90 applications.

Promotions

PREMIER GRAND CRU CLASSÉ ‘A’

1. Château Figeac 🔺

GRAND CRU CLASSÉ

1. Château Montlabert 🔺

2. Château Montlisse 🔺

3. Château Boutisse 🔺

4. Château Rol Valentin 🔺

5. Château La Confession 🔺

6. Château La Croizille 🔺

7. Château Tour Baladoz 🔺

8. Château Tour Saint Christophe 🔺

9. Château Croix De Labrie 🔺

10. Clos Badon Thunevin 🔺

11. Clos Dubreuil 🔺

12. Clos Saint-Julien 🔺

13. Château Mangot 🔺

14. Château Lassegue 🔺

​Reinstatements

GRAND CRU CLASSÉ

1. Château Corbin Michotte 🔺(reinstated from demotion in 2012)

Demotions

None

Independent

1. Château Ausone (withdrew in Jul 2021, from PREMIER GCC ‘A’)

2. Château Cheval Blanc (withdrew in Jul 2021, from PREMIER GCC ‘A’)

3. Château Angélus (withdrew in Jan 2022, from PREMIER GCC ‘A’)

4. Château La Gaffelière (withdrew in Jun 2022, from GCC)

Full List of St-Emilion Classified Châteaux

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The Market Take

🔴 Liv-Ex Right Bank 100

Biggest Winners (MoM):
---

Chateau Troplong Mondot Premier Grand Cru Classe B, Saint-Emilion Grand Cru, 2016 
+12.8%

Chateau Troplong Mondot Premier Grand Cru Classe B, Saint-Emilion Grand Cru, 2009
+9.8%

Chateau Troplong Mondot Premier Grand Cru Classe B, Saint-Emilion Grand Cru, 2012
+6.8%

Among the biggest winners of the Liv-Ex Right Bank 100, Château Troplong Mondot topped the list with the three vintages above. Nonetheless all of their most recent vintages performed quite well — except for 2013 (-0.5% MoM and -4.3% on a 5-year performance).

The market perhaps believed that the rumoured promotion of Château Troplong Mondot was a done deal?

Château Canon was the other rumoured to be upgraded to Premier GCC “A“. In the last three years, Canon outpaced the Right Bank 100 by 5% — probably thanks to its stellar scores among Bordeaux critics.

Biggest Losers (MoM):
---

Chateau Pavie Premier Grand Cru Classe A, Saint-Emilion Grand Cru, 2014 
-10.1%

Chateau Pavie Premier Grand Cru Classe A, Saint-Emilion Grand Cru, 2013
-8.5%

Clos Fourtet Premier Grand Cru Classe B, Saint-Emilion Grand Cru, 2015
-4.9%

While Château Pavie (Premier GCC “A”) ‘off-vintages‘ 2013 and 2014 suffered, their 2015 (+2.1%) and 2016 (+6.1%) saw large gains in the month. Clos Fourtet also had mixed results on the secondary market — with their 2009 and 2015 continuing to be in negative territory, while the other, most recent vintages seeing gains.

🔴 “Château Figeac sets new trading highs following promotion“ (Liv-Ex)

As to be expected, Liv-Ex reports that “Bordeaux’s trade share rose, as the 2022 revision of the Saint-Émilion classification threw the region into the spotlight, and Saint-Émilion (22.3%), enjoyed heightened demand”.

Most traded vintages — 2013, followed by 2008, 2019 and 2020 which also set new price records.

🔴 “Château Ausone 2017 was this week’s top traded wine“ (Liv-Ex)

Weird, isn’t it? While Figeac has enjoyed increased demand since its promotion, it was Château Ausone that led this week’s trade with its 2017 vintage.

The vintage remains available below its release price — and so are the 2016 and 2018 vintages. Although Liv-Ex reported that the impact of Cheval Blanc, Ausone and Angélus’ withdrawal on their secondary market prices was negligible, perhaps market forces will feel differently once their labels will stop carrying the PREMIER GRAND CRU CLASSÉ ‘A’?

🔴 “St Emilion Vineyard Market: The price of classification“ (janeanson.com)

Alex Hall of Vineyard Intelligence penned a piece on Jane Anson about the prices of St Emilion land and the consequences of the re-classification.

• Price per hectare range from €300,000 up to €6 million. Prices on the limestone plateau, even for unclassified land, begins at around €1 million per hectare, with classified land closer to €3 million.

“The “dynamic” nature of the St-Emilion classification, which is renewed every 10 years, is both a strength and a weakness.” Hall notes that “The St-Emilion classification is, by design, not an exclusive club – a future Premier Grand Cru Classé estate may not even exist today.”

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Interesting upgrades

🔴 Clos Dubreuil

Among the 15 promotions, perhaps the most exciting (aside the predictable Figeac) is Clos Dubreuil.

Benoit Trocard purchased this small St. Emilion estate in 2002, starting with 1.5ha of vines and built it up, buying further plots around the limestone plateau in St-Christophe-des-Bardes. Up at 90 metres at its highest point, the soils have clay at a depth of between 1 to 2.5 metres over limestone.

In her book, Inside Bordeaux, Jane Anson writes:

“I love this place. Trocard is a brilliant winemaker, and I love that he is not afraid to push things in unexpected directions - and then finds that he has set a course that everyone else wants to follow. (Chardonnay for one, which he planted back in 2010 and that has since been enthusiastically taken up by an increasing number of winemakers, from Ch de Thieuley in Entre-deux-Mers to La Gaffelière just down the road in St-Emilion).

[…] The resulting wine tends to be rich, glossy, full of flavour and with the impact that you'd expect in a Grand Cru that's priced higher than many Grands Crus Classés (although, as is the case in so many estates here, the flavours have been sculpted from the early days when this was 95 per cent Merlot).”

Their more recent bottled vintage 2019 was upscored to 94 from the En Primeur. You can find a summary of thier scores on Bordoverview.

At least in the UK, Clos Dubreuil seems to be traded very sparingly.

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Until next Monday,

In the mood for wine (a.k.a. Sara Danese)

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IG: In the mood for wine

In the mood for wine nor this article represent investment advice or any kind of professional counsel, nor does it represent an offer to buy or sell securities or investment services.

If you are new, you can join here. Please hit the heart button if you like today’s newsletter and reply with any feedback.

You can find all the links to WineLeaks’ past editions on this page, from a special edition dedicated to tech and NFTs in fine wine, to the Saint-Emilion looming reclassification and on the topic of wine as inflation-hedge.

The Market Take

“‘On’ vintages drive Bordeaux trade” (Liv-Ex)

Yet another sign that the fine wine market is bracing for a recession.

Liv-Ex reports that “Bordeaux’s trade share increased from 36.9% to 38.6% this week, driven by activity for its 2019 and 2016 vintages”. Better vintages (referred to as ‘On’ vintages) of Bordeaux cult châteaux are viewed as a ‘safe’ bet given more stable and established estates can better weather the storm of a recession.

In previous editions, we also mentioned:

1. The dip of both Liv-Ex 100 and Liv-Ex 50 (Bordeaux First Growths) in July prices (waiting for the August report).

2. The bid-ask ratio below 1 which means there are more sellers than buyers in the market.

3. The “unusual” predictor of recession (Bloomberg dixit!) — strong Champagne sales signal good times ahead of recessions.

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Beyond Bordeaux

“The September Releases 2022” (janeanson.com) (TWI) (Decanter) ($)

The September Releases through the Place de Bordeaux showcases more than 100 new releases from anywhere but Bordeaux.

Decanter, The Wine Indipendent and Jane Anson released in-depth reports and scores last week and more is coming in the following weeks.

The most interesting table:

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How hard is it to innovate the wine industry?

• “Wine tech is a graveyard of failure” (San Francisco Chronicle)

It’s always sad to hear of layoffs and business closures.

Pix was a Napa-based start-up whose investors and advisors are said to comprise the “who’s who of the wine industry” and was set to revolutionise online wine sales. The idea behind Pix was not to sell wine from the platform, but rather to redirect consumers looking for specific wines to the places that have those bottles in stock, similar to what Lyst does in the fashion industry. The Pix database includes around 2.4m wines from 2,800 sellers which have integrated their inventories with Pix.

CEO Paul Mabray met with over 80 venture capital and private equity firms, but could not raise money for the third seed round that he had hoped to secure this summer — thus has laid off most of its staff and is looking for a buyer, to keep the wheels in motion.

Lyst instead raised a total of US$144m from venture capital investors to date.

Mabray believes venture capital has always been wary of investing in wine, because of alcohol’s strict regulatory environment, its confusing nomenclature and the absence of many wine-tech success stories. “It’s a hard market to define,” he said of wine tech. “It has had endless failures and endless mediocre successes. I think the wine industry has a stain against it in the VC community”.

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English Wine

Last week, I’ve attended a blind tasting of English sparkling saignées, which I will go into more details later.

In the coming two weeks, my diary is packed full with English wine events. Among those, the Wine GB Trade & Press event and the launch of Gusbourne's “most exciting wine yet”.

First thing first, what does saignée means?

I had to Google it.

Last week, I’ve attended a quite intimate blind tasting of English saignée sparkling wines. I was among the 12 judges drawn from a pool of winemakers, sommeliers, merchants, writers and influencers at Battersea Power Station to score a collection of sparkling saignées predominantly crafted in the UK, with two incursions from Champagne.

Saignée translates as ‘bleeding’ in French.

My fellow judge (and editor at The Buyer) Stephen Vey explains it simply. “In sparkling winemaking a rosé is made mainly through two ways: ‘assemblage’ which is adding between 7% and 15% red wine (usually Pinot Noir) into the blend. Less common and more labour-intensive is the saignée method which is allowing the colour from the skins of the red grapes during pressing into the blend. This skin contact usually varies between 12 and 24 hours with the shade of the wine taking on a darker hue the longer the contact.”

The saignée method of rosé production is sparingly adopted in sparkling wine production, but the resulting wines have a captivatingly deep colour as well as structure, body and aromatic richness.

This style of rosé-winemaking seems to be a true gastronomic companion of elegance and substance that rewards pairing with food. A very common note from the guests was “this would go well during a meal“ but “wouldn’t be able to drink a whole bottle easily”.

In terms of food, we were spoilt by the pairing with wonderfully smoked salmon from Springs and some incredible goat cheese from Sinodon Hill in Sussex.

However, not everyone is onboard with the saignée method, which, in fact, is considered a ‘niche’. François Millo, president of the Provence Wine Council (CIVP), notoriously said “it’s not true rose“, adding “the saignée method is a bad way of making rosé. The wine is more of an afterthought, very few people in Provence use it.”

The Line-up

1. Fox & Fox Expression Saignée Rosé (£39)

   From Jonica Fox of Fox & Fox: ‘Aged saignée is different from most people’s experience of pink fizz. Made with minimal manipulation, no malolactic fermentation, aged on lees.’

2. Balfour Saignée 2018 (£40)

   From Fergus Elias, Balfour: ‘2018 was the vintage of the decade for English wines.  Super high-quality fruit and yield. A wine which practically made itself! This wine was made out of curiosity.  A style that we might not return to as it can be quite phenolic and green due to ripeness of the stems and seeds. It requires the very best vintages to be successful.’

3. Everflyht Rose de Saignée 2019 (aka their very first vintage) (£40)

   From Luke Spalding, GM and Vineyard Manager, Everflyht: ‘For me, the Rosé de Saignée method allows you to show the qualities of the varieties used (with Everflyht that is Pinot Noir and Meunier) the resulting style has purity and phenolic complexity that puts the onus on the grape quality and vintage. I see it as true field to bottle sparkling wine when done as a single estate vintage wine like the Everflyht Rosé de Saignée 2019.’

4. Hambledon Premiére Cuvée Rosé (£75)

   “Our first Premiére Cuvée Rosé is a blend based on the 2016 harvest. This is the very first time this wine will be tasted outside our own team. This style is a more vinous and gastronomic version of rosé based on the saignée method. A longer lees ageing - the wine was bottled in 2017 and disgorged in 2022 - gives depth and complexity worthy of our Premiére range.”

5. Champagne Geoffroy Rosé de Saignée Premier Cru Brut Champagne NV (£56)

6. Hundred Hills Rosé de Saignée 2018 (£180 per three in bond, Atlas Fine Wines)

   From Stephen Duckett, winemaker and co-owner, Hundred Hills: ‘With the need for perfect ripeness, while still retaining good acidity, a saignée rose is perhaps the perfect expression of Pinot Noir in England today. With hand selected bunches, barrel fermentation, no fining and no filtering the saignée from Hundred Hills is as pure an expression of English Pinot Noir vintage by vintage as you can experience anywhere.’

And the last two wines were brought along by one of the guests, Nick Baker, founder & MD at the Finest Bubble.

7. Ridgeview Rosé de Noirs 2016 (£50)

8. Louis Roederer Rose 2012 (£98)

Final remarks

The top three wine of the event were: Hundred Hills (first), Roederer (second) and Fox & Fox (third) while Balfour somewhat disappointed. It’s interesting to note how my personal favourites align as far as Roederer, but my first-choice in the line up was the Ridgeview, with Hambledon winning third spot — all three, in my view, offering a more elegant interpretation of the saignée method.

Organiser of this interesting event, wine expert and wine columnist at the ES Magazine, Douglas Blyde remarked: “for me, true saignée offers a genuine representation of our soils and, when darker and richer, offers tremendous suitability to game”.

English wine in the secondary market

While growth in English wine trade is principally focused on the on- and off-trades, with retailers reporting buoyant sales (+90% to +200%), an increased awareness about climate change and support for the local market (exports only account for 4% of all sales) saw the number of English wines traded in the secondary market marginally increase.

Last year, Liv-Ex published a mini-report on the secondary market for English wine. As of June 2021, it counts eight distinct English wines (LWIN7s) traded — whereas “Champagne has 237 LWIN7s and it is some 760 times larger in terms of value than English wine”.

In summary:

• The first English wine to trade on the secondary market was Nyetimber’s Classic Cuvee, in the summer of 2016.

• White, sparkling wine from Gusbourne, Wiston and Nyetimber are the most traded.

• In March 2021, the first still English wine was traded; Gusbourne’s Pinot Noir.

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Until next Monday,

In the mood for wine (a.k.a. Sara Danese)

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In case you missed previous editions of WineLeaks: there’s a special edition dedicated to tech and NFTs in fine wine and last week we covered Saint-Emilion’s looming reclassification.

The Investment Take

🔴 “There is precedent for collectibles as hedges” (FT)

There is currently a mainstream narrative —and that is about inflation and how wine is a great hedge against rising prices which, of course, wine merchants are heavily supportive of. This piece from Reuters. On Liv-Ex. The FT reported on Bordeaux Index and its record sales (discussed in the Tech Edition). “From diamonds to wine, investors rush to luxury collectibles“ — another very interesting article by Madison Darbyshire which highlights how collectibles were “once the playground of affluent collectors” but that “assets such as classic dresses and baseball cards are increasingly open to all,“ also noting that “hedge funds and professional investors are carving out pieces of the pie to put their money into collectibles“.

While commodities (among those: collectibles) have long been considered a good store of value during inflationary periods, the key to lock in profits is the timing during which these investments are made. To understand this point, here’s my thinking.

What Is Inflation?

Inflation is defined by the rate at which the value of a currency is falling and, consequently, the general level of prices for goods and services is rising.

In everyday terms, during inflationary periods, $1 is worth less and less because everyday items become more and more expensive.

During inflationary times, central banks need to act fast in raising interest rates, thus reducing the money circulating in the economy, which in turn will slow down the economy. The speed at which rates are increased needs to be measured against the risk of recession (if done too fast this will bring the economy to a halt).

What Is an Inflation Hedge?

An inflation hedge is an investment that is selected to protect against the decreased purchasing power of a currency that results from the loss of its value due to rising prices.

Intuitively, keeping your savings “under the mattress“ during inflationary periods means that you might wake up one day feeling a lot less cushy.

So-called safe-haven investments like precious metals and real estate, for example, usually perform well in inflationary climates; theoretically, bitcoin could be a strong inflation hedge. Assets that investors run to in times of rising prices are ones that are scarce or move counter to paper money or financial assets. Bitcoin fits the bill. The problem is, bitcoin hasn't much of an investment history: Created in 2009, it's only been actively traded for a decade or so, and inflation hasn't been much of a factor for most of its short life. Energy and banking stocks also benefit from rising prices and interest rates respectively because of top-line growth.

To understand whether wine is a good store of value during inflationary times, I have superimposed world inflation (%) over the Liv-Ex indices during the course of the last three decades.

Key Insights:

• By looking at the chart, it’s clear that fine wine prices move in anticipation of an inflationary period.

• The ‘size’ of inflation doesn’t matter a great deal — the expectation that inflation will change is what drives prices of fine wine up or down.

• Inflation and fine wine prices are concurrent — meaning, when inflation hits, it’s too late to buy.

• If central banks are successfull in their attempt to control inflation, a recession (and consequent drop in inflation) are likely in the next few years. That also means a significant drop in fine wine prices is likely to happen soon.

Inflation is a natural occurrence in an economy, and a disciplined investor can plan for it by cultivating asset classes (read: fine wine) that outperform the market during inflationary climates.

Buying fine wine at the right time is the most important aspect of successfully investing in this asset class, and taking advantage of the benefits.

Smoke Taint

🔴 “Should you consider buying a wine from a region/vintage that has been exposed to smoke?” (TWI) ($)

As the fires swept across the Gironde this summer, largely caused by drought, back in July we wrote that the CIVB wine bureau had said that “no vineyards have been impacted, and consultants are cautiously optimistic”.

The Drinks Business reported this week that the CIVB has been contacted by vineyards of Australia and California who shared their expertise and re-iterated that “berries have been analysed and nothing has been detected, the rains of last week and this week have allowed to rinse any possible traces”.

In the notes from Jane Anson (see Harvest Reports below) she comments that the harvest is underway with the Sauvignon Blanc in Bordeaux and the reds will soon start.

As wine critics start writing about the 2020 vintage in California and Napa Valley — it’s interesting to see what’s lying ahead for Bordeaux.

Back in August 2020, Decanter was noting that in California, at the time of the harvest, many wineries were conducting extra checks for signs of smoke taint.

Harvest went ‘full steam ahead’ and, although some reports had raised concerns about smoke taint affecting areas of the vintage (perhaps not presenting a united message as the CIVB in Bordeaux is doing), in truth it was too soon to tell.

What Is Smoke Taint?

• Smoke taint occurs when developing grapes are exposed to the smoke from wildfires for any period of time.

• A number of factors will determine the level of impact the smoke will have on the berries: the state of berry development during the exposure, the duration, and the concentration of smoke. 

• More on that from the Australian Wine Research Institute “Smoke taint – entry into grapes and vineyard risk factors“ and from the Department of Agriculture and Food Western Australia “Effect of smoke in grape and wine production”.

How Does Smoke Taint Affect Wine?

• “Smoke taint involves more than just the unpleasant classic aromas of campfire, ash and wood smoke. Tasters experience elevated levels of perceived tannins and alcohol; the wine tastes rougher and hotter than it actually is”, writes Arnica Rowan for jancisrobinson.com, adding: “with training, which I do not recommend, you can often smell the base fuel from the fire, such as a pine campfire aroma from a pine forest“

• Aside from the obvious smoky character, a more worrying note from Perrotti-Brown is that some wines don’t exhibit the taste of it but “smoke taint is insidious in its ability to remain masked for a period before emerging”.

• “Some grapes seem to absorb more of the offending taint compounds than others. Syrah seems to favour this smoke character.”

• Most white grapes tend to have little or no skin contact, and late-season smoke mainly affects the skin.

Key Takeaways on Napa

• Fast forward two years, Lisa Perrotti-Brown MW cautions against buying California Central Coast and Napa Valley 2020 as “smoke-tainted 2020 wines are being bottled and sold, even by reputable wineries“.

• Winemakers have lab-tested their wines and were told the smoke taint compounds numbers were below that lab’s stated detectable thresholds.

• “The problem is that” explains Perrotti-Brown, “laboratories cannot test for all the taint’s compounds. Most of the time, I can detect what winemakers have been told is undetectable.”

• Regarding the red varieties, Perrotti-Brown has tasted smoke tainted 2020 wines from sites in California north of San Luis Obispo, including the major areas of Paso Robles, Sonoma, and Napa Valley. She will release a largescale report on California Central Coast and Napa Valley later this year which will focus on this issue.

• Perrotti-Brown hasn’t yet tasted any 2020 white wines that have smoke taint and she doesn’t expect to, since most white grapes were harvested before the smoke became a real issue in most areas.

What’s clear from this word of caution from Lisa Perrotti-Brown MW is that buying a wine from a region/vintage that has been exposed to smoke is very risky indeed. Leaving aside the vintage considerations — a smoky vintage will be considered, no doubt, a lesser vintage, thus reducing its value on the secondary market; but what’s still not quite clear is if and how smoke taint can affect wine in their later years — will it reduce the ageing potential? will compounds remain hidden until the bottle is opened?

Many questions that perhaps winemakers themselves don’t know the answer to.

Until next Monday,

In the mood for wine (a.k.a. Sara Danese)

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In the mood for wine nor this article represent investment advice or any kind of professional counsel, nor does it represent an offer to buy or sell securities or investment services.

If you are new, you can join here. Please hit the heart button if you like today’s newsletter and reply with any feedback.

In case you missed last week’s WineLeaks, it was a special edition dedicated to tech and NFTs in fine wine. You can check it out here.

Wine Reports

🔴“St-Emilion: Worthy candidates for classification promotion“ (Decanter) ($)

The most awaited event on the fine wine calendar is the St-Emilion classification’s potentially controversial revision in September.

Key information:

• Figeac and Canon are the two potentials for an upgrade from 1er Grand Cru Classe (1erGCC) B to the highest ranking of A.

• 2022 edition stipulates that performance in blind tastings by an independent panel counts for 50% of the overall grade for those vying for 1erGCC, compared to just 30% previously. Reputation, such as media coverage, counts for 35% (😲) of the tally, with 10% for terroir quality and 5% for winemaking techniques.

• A minimum score of 14 out of 20 is required to be GCC, and 16 out of 20 to achieve 1erGCC. Obtaining the top ‘A’ level is ‘based on exceptional wine ageing ability and reputation, as determined by the commission’.

Panos Kakaviatos put together a list of the estates that could fit the bill for a potential upgrade.

🔴“Blind tasting Saint-Emilion Superstars“ (Jeannie Cho Lee MW Official WeChat)

In light of this re-classification, I thought it would be interesting to take a look at the results of the “longest-ever (blind) tasting“ of Saint-Emilion Superstars (in the words of Jancis Robinson). Although for a quite different reason — “the purpose of our tasting marathon” writes Jancis Robinson on the FT ”was to compare Quintus (owned by Prince Robert of Luxembourg — the host of the event) with the most celebrated wines of ­St-Emilion — Cheval Blanc, Figeac, Ausone, Pavie and Angélus”, I believe the results are quite telling.

On May 31, Jeannie Cho Lee, Jancis Robinson and other wine experts (Jeff Leve, Jamie Ritchie, Stuart Pigott, Jane Anson, and Alexandre Ma among others) were invited to a blind wine tasting of Saint-Emilion wines.

6 wines: Cheval Blanc, Ausone, Pavie, Angélus, Figeac and Quintus / flight

8 flights: the same 6 wines were tasted by vintage (2011, 2012, 2013, 2014, 2015, 2016, 2017 and 2018)

The scores both about the vintages and the wines were aggregated to create the experts’ average.

Results:

• The top vintage was 2016 (followed by 2015 and 2018). Cho Lee notes that 2017 and 2011 weren’t on par with the top 3, but there were some balanced wines.

• Worst vintage (by a wide margin) — 2013.

• Figeac 2016 had the highest score among all 48 wines tasted (beating Ausone & Cheval Blanc from the same vintage). Cho Lee’s favourite Figeac was the 2018.

• Ausone suffered from vintage variability (esp. in 2011 & 2013), while Figeac and Cheval Blanc were very consistent. Robinson agrees on Ausone.

• Quintus positively surprised with their 2016 and 2015 placing in the top 10.

• Robinson was particularly critical of Pavie 2011, as “the owner Gérard Perse pursued a policy for many years of making a wine that was as concentrated, tough and exaggerated as possible”.

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The Market Talk

🔴“Prices for Figeac have risen more than for Canon but the 2013 vintage has been a top performer across both estates.“ (Liv-Ex)

Liv-ex published a report on the market performance of the two châteaux, ahead of the re-classification.

The most traded names are the 1erGCC A — as expected; however, Figeac follows closely.

Key insights:

• Prices for Figeac have (on average) risen more than they have for Canon.

• Over the past three years, Figeac is up 47.1%, while Canon has risen 13.6%.

The real question is: will Figeac and Canon prices of old vintages increase dramatically — should they be reclassified as 1erGCC A?

Cult Wines thinks so. “An upgrade would certainly lead to higher prices as was the case when Château Angelus and Château Pavie attained Classé A status in 2012.”

Other insights from the 2012 classification:

• Angelus’s EP price went from £1,470 in 2011 (12x75cl) to £2,000 for the 2012 vintage while Château Pavie’s EP price rose by 66% from 2011 to 2012.

• Back vintages of the two wines also saw price appreciation at the time of the upgrade.

• The upgrade effect may be greater on wines previously overlooked by the market than on those already enjoying strong demand due to high scores, such as ”the 2007 Angelus (92 points) price spiked by over 50% in the three years after 2012 whereas the 2005 (100 points) and 2010 (99 points) rose by 11% and 9% respectively”.

Cult Wines also believes the withdrawal from the classification will unlikely negatively impact Ausone and Cheval Blanc.

Demotions will be tricky. Demoted châteaux will no doubt consider suing the St-Emilion Classification (see 2006 and 2012), which, I am sure, the Institut National des Appellations d'Origine (INAO) is well aware of. (Please let me know in the comments below who, in your opinion, will be demoted!)

Lastly, I’m keeping an eye on the other potential upgrades mentioned above, namely Château Rochebelle, Château Fonplégade and Château Fleur Cardinale.

🔴“Who benefits from a weaker euro?“ (Bloomberg)

In other news, EUR is weakening against the dollar. Technically not quite on parity yet, but.

• First — why is this happening?

From Bloomberg: “Europe suffers most from the war, which has sparked an energy crisis and could lead to potentially a long and deep recession. That places the ECB in a difficult position —trying to curb inflation and cushion a slowing economy as it aims to raise borrowing costs for the first time since 2011. At the same time, the US Federal Reserve is raising interest rates much faster than the 19-nation euro area […]”

Yields on US Treasury bonds are higher than those on Europe’s debt, driving investors to the dollar and away from the euro. “What’s more, the greenback benefits from its status as a haven, meaning that as the war drags on and the fallout gets worse, the euro keeps sliding.”

• Who benefits from a weaker euro?

On a broader level, the euro’s weakness against the dollar helps European exporters as it makes their products more competitive and boosts earnings.

Fine wine currently looks a lot cheaper in the eyes of USD-based buyers.

As is the case in other markets, demand for fine wine (and its price) is in part driven by favourable exchange rates with merchants across the globe trading in multiple currencies.

The Americas account for more than 30% of sales of fine wines, and if USD-based buyers took advantage of the sudden weakening of EUR, it could lead to a significant rise in demand from across the world and a subsequent increase in fine wine prices.

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Events

🔴Few events are starting to pop up as the wine world gets back from holiday.

• Decanter Fine Wine Encounter 2022, Grand Tasting (Decanter) (£95) on Sat, 5 November 2022, 11:00 – 17:30 (BST) — book here.

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Interesting Reads

🔴“What is 'Grower Champagne'?“ (Six Atmospheres)

Finally the answer to the question!

Six Atmospheres

What is 'Grower Champagne'?

Moussé Fils in Cuisles, in the Marne Valley ‘Grower Champagne’. A term that seems, on the surface, to provide a neat way of separating out producers whose wines are made only from their own vineyards. Champagne’s governing body, the C.I.V.C., actually divides producers into ‘houses’, which buy in grapes and base wine, and ‘growers’ when it publishes stat…

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4 years ago · 5 likes · Tom Hewson

This is a great substack written by Tom Hewson, a musician & (traditional method) sparkling wine writer for Tim Atkins.

🔴“A rundown of the wines and what I thought they were at the time. Blind. In Exam Conditions.“ (dnkrby wine club newsletter)

If you are interested in reading, cheering on (and perhaps supporting) Dan Kirby through his Master of Wine journey, you can find his dnkrby wine club newsletter here.

dnkrby wine club newsletter

The MW Stage 1 Assessment - Practical

Hey Team, It’s taken me a little while to get to this. Who knew going freelance meant that I was busy all the time. If you’re enjoying reading this newsletter, you can consider chipping as little as …

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4 years ago · 3 likes · 1 comment · Dan Kirby

It was quite enjoyable (yet somewhat painful) reading him going through the published answers of the Stage 1 assessment against his own answers.

Stay strong 💪

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Until next Monday,

In the mood for wine (a.k.a. Sara Danese)

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In the mood for wine nor this article represent investment advice or any kind of professional counsel, nor does it represent an offer to buy or sell securities or investment services.

If you are new, you can join here. Please hit the heart button if you like today’s newsletter and reply with any feedback.

I’m tentatively working on the ambitious goal of making sense of Bordeaux classifications 😂 Also, you can find the list with all my favourite wine experts & their twitter handles. Check them out, and if I’ve missed anyone feel free to mention them in the comments.

The Tech Edition

• “Buying a Penfolds Magill Cellar 3 2018 Cabernet Sauvignon Shiraz was an investment, honest.“ (Alts by Flippa)

This week, the substack Alts by Flippa caught my attention. Richard Patey, the editor of this alternative asset investing newsletter, bought a $750 bottle of Penfolds Magill Cellar 3 2018 Cabernet Sauvignon Shiraz from Blockbar.

Alts by Flippa

🍷 NFT wine - to flip or drink?

Hey there, in this week’s Alts by Flippa newsletter I discuss: Buying a $750 bottle of wine (NFT) Opensea acquires Gem and integrates Solana JPEG’d NFT lending platform launches AI content good enough in 2022? Remember, every heading in this newsletter is a channel in the Discord …

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4 years ago · 2 likes · 2 comments · Richard Patey

Blockbar is a direct-to-consumer NFT marketplace for luxury liquor products.

Patey bought the Penfolds for 0.26 ETH — at a premium from their 0.15 ETH release price during the drop of 300 bottles/NFT in January. It’s now currently listing for 0.40 ETH.

As a longtime skeptic of NFTs & blockchain, when I hear start-ups utilising these technologies to solve “problems”, I wonder whether they actually solve “problems“ or they repackage something that already exists with a plastic wrap of unnecessary technology (and costs!).

For example, these Tasting Token NFTs🤌.

Blockbar seems to be solving some very well known pain points of wine ownership, namely: storage, insurance, and proving authenticity (with blockchain) when reselling.

Effectively, Blockbar’s solution is similar to cash-settled derivatives on commodities. While a physically-delivered derivative might be useful to businesses using those commodities, cash-settled instruments allow speculators and investors to take advantage of arbitrage and mis-pricing opportunities.

The same can be said for the fine wine market. At the moment, collectors (who want to own fine wine with the idea of drinking it, eventually) are the vast majority of the retails players. In fact, every conversation with wine merchants starts with this same caution — ”in the end, we sell you wine that you need to be happy drinking, not so much for investing”.

These types of platforms could change that, by reducing the bureaucracy surrounding the physical storage and settlement.

How the platform works:

• Users can list, bid and purchase bottles from their marketplace.

• Owners of the NFTs set the price in either ETH or US$.

• Non-owners can purchase the NFTs at the list price or make an offer that is valid for 3 days.

• Should you want to drink the wine, you can redeem the digital asset for the physical one. This process removes the digital NFT from the ecosystem making the remaining NFT’s more rare. (Well, the wine might still exist though!)

• In terms of fees: when selling, collectors receive 90% of their selling price (which means 10% brokerage fees). The remaining percentage is split between Blockbar and the brand.

The workflow seems pretty simple. What also appeals to me is the direct connection between retail investors and brands — effectively skipping the need for wine merchants and brokers at purchase (and their relative markups).

Now, to the issues I see:

• Wine merchants, who account for the large majority of revenues for wine makers —are they happy about being bypassed? I don’t think so. For this reason, I am wondering whether the allocations on these platforms will be the “rejects“ or else, the allocations that wine merchants are not too keen on taking on?

• Price. Assuming only “special edition“ allocations will therefore go on these platforms, how do we (as buyers) know if a wine is fairly priced? In fact, I couldn’t find a critics’ score on the wine and the PR release Decanter article links this 100% Shiraz — NOT the Cabernet Shiraz sold. Price can therefore be inflated by the platform and the brand themselves with the “special edition” excuse.

Poll time!

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• “World’s biggest fine wine trader toasts rising sales as consumers seek to hedge against inflation“ (FT)

Bordeaux Index was prominently featured in the press, after the fine wine merchant recorded a stellar H1 2022, reaching £80m in sales during the six months to June 30, up 37% on the same period last year.

LiveTrade, their online wine trading exchange, “was responsible for the majority of growth, reporting sales 53% higher than the comparable period last year”.

Interesting to read that, especially in connection to what Digital Stack by Rex Woodbury (another great substack!) refers to as the “Generation Investor“.

“A NASDAQ survey found that 48% of Gen Z investors check their portfolios multiple times a day, while 24% check once a day. That compares to 39% and 22% for Millennials, 16% and 19% for Gen X, and 10% and 12% for Baby Boomers. Generation Investor is also more active: 34% of Gen Zs make trades a few times a week, compared to 26% of Millennials, 19% of Gen Xers, and 7% of Baby Boomers.”

The newer generation’s interest for investing is great because “owning stock is directly correlated with wealth creation”. In addition, this trend will also benefit platforms such as LiveTrade and BBX (Berry Bros. & Rudd’s fine wine exchange). Not only it has directed quite substantial amounts of venture capital funding in start-ups such as Cult Wine Investment (CultX) and Koia (now Chip) but, above all, I hope it will push the market to create a more transparent, accessible, safer and easier way to trade fine wines.

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• “Sociando-Mallet is the top insider value by a mile” (Quantian on Twitter)

Three years outdated — so please take the results with a pinch of salt.

Interesting analysis nonetheless.

Looking at the model’s results:

• Vintage quality seems to be improving — in line with the idea that technological advances in the vineyard and in the cellar allow for a better management of non-ideal conditions.

• The two most undervalued Châteaux are Sociando-Mallet & Léoville-Las Cases.

  

• Sociando-Mallet is a château located “on one of the best quality gravel slopes of the Haut-Médoc, in the village of St Seurin de Cadourne”, says Jane Anson. While the analysis above refers to the 1990-2016 vintages, the 2019 Sociando-Mallet scores 92 from TWI, 94 from Jane Anson and 95 from Decanter — maintaining a fair price below £30 (in bond).

• Second on the list, St-Julien Château Léoville-Las Cases. The 2019 scored 98 across the board on Decanter, TWI and Jane Anson (“I love it when a wine steals up on you, and you very definitely get that here, taking its time on the first attack then rapidly expanding outwards and upwards“). A step-up in price at £165 (and quality) from Sociando-Mallet, but certainly cheap compared to same-scoring 2019 Château Mouton Rothschild (£500).

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Until next Monday,

In the mood for wine (a.k.a. Sara Danese)

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Wine Reports

• “Bordeaux 2019 in Bottle: The Missing Pieces“ (TWI) ($) and “2019 In Bottle“ (janeanson.com) ($)

”No frost, no hail, no mildew in 2019,” said Fabien Teitgen, winemaker at Château Smith Haut Lafitte. “There was no problem achieving ripeness this year. The challenge was to keep the freshness.”

From TWI: Cheval Blanc’s technical director Pierre-Olivier Clouet says “at Cheval Blanc the 2019 is like 2009. This was the kind of vintage at Cheval Blanc where you had to accept to do as little as possible. It was a vintage that was done alone in the vineyard. You just needed to preserve it—not to oxidize, etc. This was the earliest we blended. There is no press wine in here. It can bring a certain rusticity and dirtiness. We want to preserve the beautiful purity on the nose. You must be very careful not to ruin what you have.”

Anson summarises 2019 as “an excellent vintage – not as consistently outstanding as 2016 or 2010 out of the past decade, but I place it alongside 2015 (and in some cases 2018).“

Perrotti-Brown notes: “energy is the perfect word to describe the style of the 2019 vintage. Compared to 2018, the flavors are remarkably bright and refreshing—like crunching into ripe but not overripe fruit. And yet, these are also wines with gravitas, weight, and jaw- dropping intensity. The juxtaposition between alcohols (on the high side), vibrant fruit profiles, higher acids, and lower pHs (for the most part) gives the best 2019s this real sense of energy in the mouth.”

Interesting note by Perrotti-Brown on the second wines — “even though 2019 was, as many winemakers stated, an “easy” vintage, it is clear from my tastings that it was not quite as easy to make exemplary wines as it was to make good to excellent wines.” The same evaluation was echoed by Jane Anson: “this was not a vintage were all second wines performed well, which is why it never achieves the same consistency as 2016 or 2010. In most cases therefore I would go for the first wines of consistently good Cru Bourgeois (or equivalent) rather than the second wines of bigger names that are often similarly priced.“

A couple of second wines were mentioned by Anson, Château Montrose St Estèphe Dame de Montrose 2019 (£25 / bottle) and Château Margaux Margaux Pavillon Rouge de Château Margaux 2019 (£130 / bottle), having delivered absolutely brilliantly (both 94s).

• “I do not give the 2019 Figeac 100 points because it is different. It just is.“ (TWI) ($)

On the topic of Bordeaux 2019, a great profile on Figeac DNA with a horizontal tasting spanning from 1979 to 2019.

• “It is too early to make an assessment of the 2019 Barolos as they are not on the market yet, but the Barbarescos I have tasted look very exciting.” (TWI) ($)

Part of Susan Hulme’s Spin the Bottle piece on Barolo & Barbaresco 2017, 2018 and 2019 for The Wine Independent, she was surprised to notice that, when tasting the 2019 Barbarescos, her “scores are higher on average than for 2017 and 2018. For the eighty 2019 Barbarescos I tasted, I gave an average score of 91. What is very attractive in the 2019s is the poise and brightness of the aromas and flavors. These are firmly structured wines with a very pure and pristine quality of fruit. They have plenty of firm tannins, but the tannins are polished and refined. They need more time to open and show their real potential, but they look like wines capable of long aging.”

Among the top scoring, 2019 Gaja Barbaresco (~£169) and 2019 Massolino Barbaresco Albesani (doesn’t seem to be available in the UK). The former 2018 was also among the top winners of July 2018 (+6.8%, Liv-ex data). However, historical prices on Barbaresco haven’t moved much.

The Market Take

• “Fine wine market dips in July“ (Liv-Ex)

Both Liv-Ex 100 and Liv-Ex 50 (Bordeaux First Growths) dipped in July, albeit by a small percentage. This is the first time since June 2020 that the fine wine market records a negative month-on-month movement. Last week, we reported that the bid-ask ratio had fallen below 1 — an indication that there are more offers in the markets than there are buyers.

Stay put.

• “The Don of Champagnes: Dom Pérignon in focus” (Bordeaux Index)

The exception to the crippling fine wine market is Dom Pérignon. The Champagne 50 sub-index finished last year (Jan-Dec 2021) up 40.0%, its best ever year of performance. The bulk of the performance came in from October onwards, and the rally is continuing to this date. Dom Pérignon 2008 has risen in value by 17.3% year-to-date, has been in near-constant demand since release. The 2012 vintage has also been trading strongly this year. 

This rally is very atypical as “champagne historically acts like an annuity. It never was the best performer, it was always up 8 to 10 per cent a year” says Justin Gibbs, co-founder of Liv-ex.

Why this change, you may ask? It’s supply & demand, says the FT.

Supply has been tight. A decision last year by the champagne trade association to reduce production during the pandemic, followed by a poor harvest this year because of frost and mildew, has made for smaller production, which can mean champagne houses hold on to more of their supply of older vintages.

This, combined with the recent arrival on to the market of the top-end 2008 and the “exceptional” 2012 vintages has attracted interest from buyers, according to Justin Knock, director of wine at Oeno Group.

BI confirms that the 2008 and 2012 Brut account for over 40% of all DP sales on their platform. “There used to be a clear pattern of outsized demand for the top vintages, but this has evolved quite interestingly of late. As Asia has become more focused on Champagne, there tends to be demand across young drinking vintages, and where one wine – even a weaker vintage – becomes cheaper than the rest by a material amount, strong demand ensues,” reveals LiveTrade’s CEO, Matthew O’Connell. “That said, demand for 2008 still remains very high, so for the absolute top vintages there is very significant differentiation.”

However, “up to around five years after release is when Dom Pérignon will be closest to the winemaker’s intention and the most intense expression of itself. After that it will be good, but it will be different due to the impact of ageing and oxidation.”

As wines are matured by the champagne houses and are released ready to drink, unlike top-end Bordeaux or Burgundy wines, which are typically kept for years and have well-developed secondary markets.

So, the question is — will these wines re-enter the secondary market or will they all be drank?

• In other news, the Bank of England caused a little bit of a panic this week. Why?👇🏻

In addition, there has been talk of recession in the US this week, after two quarters of contracting GDP. Biden assures (or at least tries to): “It doesn’t sound like a recession to me”.

And Bloomberg reports some of the more unusual indicators of recession —and, along with underwear, lipstick, hemlines and diaper rashes, strong Champagne sales signal good times ahead of recessions.

Events

• “Majestic to pay ‘vintern’ to drink wine on holiday“ (Majestic)

Wine on holiday always tastes better doesn't it? But is there any exact science behind it?

They need to put this theory to the test, and they will do so in a rigorous scientific manner — by sending one ‘vintern’ to Portugal for three days.

Until next Monday,

In the mood for wine (a.k.a. Sara Danese)

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In the mood for wine nor this article represent investment advice or any kind of professional counsel, nor does it represent an offer to buy or sell securities or investment services.

If you are new, you can join here. Please hit the heart button if you like today’s newsletter and reply with any feedback.

In case you’ve missed it, I’ve compiled a work-in-progress database of all vintages reports in all the major investment regions and a list with all my favourite wine experts. Check them out, and if I’ve missed anyone feel free to mention them in the comments.

New Wine Reports

• “Bordeaux: 2005 Retrospective“ (TWI) ($)

The Wine Independent published the first piece of the “Retrospective“ series, authored by Lisa Perrotti-Brownn MW, which I very much enjoyed reading.

Perrotti-Brown quickly reviews the 2005 vintage (it was a dry one) and reminiscing how “tannic and impenetrable” wines were en primeur, adding: “After bottling, most of the wines immediately shut down, falling into a long slumber.“

In this report, she was to understand whether these wines came out of the slumber — and yes, the answer was affirmative. Usual suspects or “late-bloomers“ impressed her, but a few names surprised (positively): “In particular, Clos Fourtet (is a St. Emilion 1er Grand Cru Classé property), Rauzan-Segla (of the Margaux appellation and owned by Chanel), Smith Haut Lafitte (in the the Graves region and now owned by former Olympic skiing champion, Daniel Cathiard), and La Gaffeliere (part of the St. Emilion appellation, classified as a 1er Grand Cru Classé(B) and owned by Léo de Malet Roquefort) blew me away—these are real jaw-droppers with a long life ahead! What’s more, all three of these wines are widely available for around $150-175/bottle.“

(She promises retrospectives on more recent vintages, namely Bordeaux 2012, 2015, 2016, 2017, and 2018 which I am looking forward to sharing.)

What to Read

• “Bid:offer ratio shows signs of wider global problems“ (Liv-Ex)

Perhaps you might remember the article I wrote on liquidity “Are your liquid assets illiquid?“ — where I pointed out that liquidity is a leading indicator (a piece of data that corresponds with a future movement or change in price) for fine wine prices. Liv-Ex currently reports that the market is drying up, which is showing in the bid-ask ratio of Liv-ex indices.

“A bid to offer ratio compares the total value of bids (firm commitments to buy) to the total value of offers (firm commitments to sell) on the market. 

The ratio’s aim is to indicate the level of demand that exists in the secondary market. Historically, a bid:offer ratio above 0.5 tends to indicate the beginning of an uptrend in the market, or at the very least acts as a sign of price stability.”

Note: if the ratio is above 1, it means that there are more people willing to buy than to sell. And, vice versa, a ratio below 1, means there are more sellers in the market.

“Currently, the bid:offer ratio on the Liv-ex trading exchange is 0.89. This is down from its high points in late 2021 and early 2022, with more offers currently listed than bids suggesting increased caution from buyers – a sign of the straitened economic global outlook but also an opportunity for buyers.“

They add: “The bid to offer ratio is a useful indicator of market sentiment and frequently reflects the world’s macroeconomic situation. For example, in 2020, as the reality of Covid-19 spread and lockdown was announced, the ratio dropped to 0.2. And as a consequence, the market weakened.“

Of course, Liv-Ex points out the inflation-hedge nature of fine wine as well as the power-shift from sellers to buyers in such environment can create opportunities for buyers who now hold a position of greater power over those wishing to sell stock. 

However, I would like to point out that liquidity has yet to impact fine wine prices — we are still seeing prices climbing daily. As liquidity is a leading indicator, we might expect prices to collapse in the near future, which will then be a great time to buy some bargains.

• “With yields down 50%, NZ winery Gladstone embraces En Primeur” (vino-joy)

Brochure (incl. prices):

Gladstone Vineyard En Primeur Launch 2022

4.56MB ∙ PDF file

Download

Download

“Allocations of the 2020 and 2021 vintages from the Wairarapa-based winery will be available from now until October 31 and will include four of the estate’s wines, which are 340 Blanc 2020 & 2021, Estate Pinot Noir 2021, Dakins Road Pinot Noir 2021, and Blairpatrick Pinot Noir 2021.”

Allocations available on 31st October 2022 — you can submit your interest via their website.

• “The rising value of Champagne magnums“ (Liv-Ex)

Liv-Ex reported that the Magnum Champagne bottles trade at a premium of 15% to the standard-size bottles.

Why is that?

1. Supply & demand. Fewer bottles made, smaller inventory leads to price inflation.

2. Higher production costs. Everything is set up for 750ml formats, therefore supply costs for off-size bottles are higher.

3. Longevity. Among wine professionals, magnums are considered to keep wine fresher, because the wine ages more slowly in a large bottle (higher ratio of wine volume to ullage (the small amount of air inside the bottle).

4. Veblen goods. Magnum bottles make great gifts and feel more special than typical bottles. This could also explain why the very top brands and wines like, for example, Louis Roederer’s Cristal 2008, have the largest premium over the 750ml bottle. 

Anything else?

• “Collector’s guide: Right Bank Bordeaux“ (Decanter) ($)

Events

In the mood for wine was born with the idea of creating a community of fine wine nerds and investors. If you are on Reddit, you should join the subreddit group WineEP — which focuses on all things fine wine & investments. Last week, two (London) events were mentioned there:

• Jeroboams Late Summer Tasting 2022 (£65) on Wed, 7 September 2022

  18:45 – 21:00 (BST) — book here.

• Goedhuis & Co Bordeaux Tasting (£TBA) on Thu, 17 November 2022, Saatchi Gallery, Chelsea with over fifty chateaux — tickets not released yet.

I’ll be likely attending both tastings, so it’d be lovely to see you there!

Until next Monday,

In the mood for wine (a.k.a. Sara Danese)

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In the mood for wine nor this article represent investment advice or any kind of professional counsel, nor does it represent an offer to buy or sell securities or investment services.