Welcome toIn 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).
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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.
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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$. The U.S. dollar’s surging value relative to the euro, the Japanese yen, the British pound and other currencies (see DXY Index above) is making foreign-made goods cheaper to import, while exports of U.S.-made goods grow more expensive for foreign buyers.
While the Sterling collapse was short-lived, bouncing back to after Chancellor Kwasi Kwarteng’s U-turn, the medium-term trend still persist given the interest rate differential between the US and the UK (and most of the rest of the world).
🔴 The Wine Market Update
(MoM = month on month)
Livex 50 (MoM):
+0.8%
Livex 100 (MoM):
+1.9%
Livex 1000 (MoM):
+2.1%
1️⃣ Liv-ex reported that the fine wine markets bounced back in September, finishing +2.1% thanks to the last week’s opportunistic trading, boosted by the weakness of Sterling.
2️⃣ Napa Valley wines have performed extremely well in the past two to five years, finishing second only to Burgundy and Champagne.
However, as US$ 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.
Source: Liv-ex
🔴 The case for Barolo
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.
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.
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:
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.
🔴 Let’s talk about Barolo 2013.
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.
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.”
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.
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!)
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).
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“.
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.”
🔴 Finding value in 2016 Barolo
Is there any value left in 2016 Barolos? I think so.
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.“
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“
In the meantime, I am looking forward to the release of 2019, which promise to be another great vintage.
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.
