Looking back over the recent en primeur tastings, a number of things have become clear...

The first and most obvious thing is that Bordeaux has another great vintage on its hands, albeit one which is very different from the remarkable preceding vintage of 2009. The success of 2010 is due to the near-perfect and unusual weather patterns which developed during the vintage. In particular, the weather was dry but not too hot, with many cool nights. Several appellations did experience drought conditions but fortunately rain came at the right time in September. This provided welcome relief just when the vines were at their most stressed.

The result was grapes that were small, healthy and concentrated and wines which are high in alcohol, acidity and tannin. As Jean-Guillaume Prats of Cos d’Estournel pointed out – this was genuinely remarkable. ‘Most wine regions can produce one or two of these three components. Only Bordeaux has been able to do all three at the same time!’

Below: Jean-Guillaume Prats discusses the differences between 2009 and 2010

Once again, this was another great year for Left Bank Cabernet. Firstly, this was because the weather conditions suited Cabernet Sauvignon, which ripens a bit later than Merlot and generally has lower potential alcohol. Secondly, this was because some Merlot vineyards suffered from coulure (poor fruit set), which reduced the crop in certain areas. As with 2009, some of the Merlot-dominant wines have come in with very high alcohol levels – whether or not this happened depended on their individual terroirs and the time of picking. On the Left Bank, many chateaux used less Merlot this year and much more Cabernet. Mouton is a case in point. For the 2010, the blend is 94% Cabernet (up from around 80% in 2009).

However, this is by no means an exclusively Left Bank vintage. The Right Bank had some notable successes, particularly in Pomerol and, to a lesser extent, in St Emilion. Equally, Graves did well with both their red and white wines. For instance, at both Haut-Brion and La Mission Haut-Brion, big, powerful, and concentrated reds have again been produced. However, the power of these wines is tempered by the excellent acidity so prevalent in this vintage. The same goes for the whites produced by both properties. They are particularly impressive in 2010.

Below: One of the stellar Sauternes of the vintage - Chateau Suduiraut. Notice the interesting thermometer collar below the label, ensuring that the wine is served at the correct temperature.

Sauternes was also a success. The chateaux were blessed with a big crop and the wines exhibit good botrytis character and an excellent balance between sweetness and acidity. However, the wines do lack the sheer intensity and power of the 2009s.

As a result, there is near universal acclaim for 2010. However, some caveats should be issued when it comes to buying the wines – both stylistically and by individual chateaux. Consumers need to realise that the wines from this vintage have a very different profile than that of the more opulent and easy-going 2009s. The difference is that in 2010 the best reds are beautifully balanced but have a much more tannic structure and much higher acidity levels. This means that many will take quite a bit longer to develop. Yet, it is important to understand that they will indeed develop and that the resulting wines will be absolutely stunning. In many ways, this is very much a ‘classical’ Bordeaux vintage that will appeal to traditional European palates.

This was a difficult and challenging vintage to taste - particularly coming on the heels of 2009. There are many gorgeous wines in 2010 but the most successful are unquestionably those which showed some restraint with regard to tannin/extraction levels and percentage of alcohol. Unfortunately, some properties have produced tannic, over-extracted and highly-alcoholic wines. These wines may come around at some point in their development and allow the underlying fruit to shine through. Equally however, they may not.

In 2010 there are some real vins de plaisir, as well as vins de garde. The First Growths and Super Seconds have once again produced some exceptional wines. However, this year, their second wines have also taken a massive step forward. Carruades de Lafite, Le Petit Mouton and Alter Ego de Palmer are all scintillating wines and we will be buying as many cases of them as we are able to secure.

Above: One of the vins de garde - Tasting at Chateau Pontet Canet. Brilliant balance.

Ultimately, the commercial success of the vintage will largely depend on price. My view is that the Bordelais will not price 2010 any lower than 2009 for several reasons. First of all, they know that they have produced another excellent vintage that is similar in quality to 2009. Secondly, they have made slightly less wine than last year – overall production is down. Finally, they need to price it at least at the same level as last year simply to protect the current 2009 prices.

Equally, it seems that the chateaux cannot raise prices significantly either. The global economic recovery is far from assured or complete. It also remains to be seen whether the American market will return after a long En Primeur absence.

Above: Will the chateaux embrace correct market pricing or will they burn the opportunity?

Another question is how much slack the Far East markets will take up this year. The Chinese are beginning to buy into the concept of purchasing En Primeur, and there was a notable presence of Chinese buyers in Bordeaux during our time there. Finally, what about Europe? After last year, some European collectors may feel less inclined to buy quite as much this season if the prices significantly increase. All of these factors lead me to expect prices to be released at similar levels to 2009.

Of course, there will be exceptions to the rule. Those chateaux which have produced better wines in 2010 than in 2009 may be inclined to break ranks, particularly if Robert Parker endorses them with a big score later this month. In some instances, such price increases will be entirely justified. Against that, my inside information on Parker’s thinking is that he is likely to rate 2010 ‘a notch lower than 2009’.

Above: What will Robert Parker score the wines of Lafite-Rothschild?

At the Antique Wine Company, we will be offering specific advice to our clients as the campaign unfolds throughout May and June. Our counselling will be based heavily on our first-hand experience with each individual chateaux and the quality-to-price ratio of each wine. I believe that, no matter what, 2010 is a vintage that serious and knowledgeable collectors and consumers will want to include in their cellars. Prices are unlikely to fall in the near term and certainly over the long haul, the top wines will inevitably rise in value.

Always remember, En Primeur is the best time to purchase top wines at their lowest market prices. It is also the only time consumers and collectors can obtain a substantial volume of their favourite wines and be unequivocally certain of provenance.

Demand for the top wines from this vintage will be strong. As a merchant, it is always somewhat of a challenge to satisfy the many demands of the négociants, who require us to purchase vast quantities of their lesser wines, pro-rata to the First Growths and premium wines. The négociants decide which merchants are currently in favour and they like to see those merchants buying not only the First Growths but also promoting the less prominent and lower–hierarchy wines.

In almost every vintage, market demand for the First Growths exceeds supply. Each year we find that we can easily sell our entire allocation of these wines. Therefore, we are constantly trying to increase the size of our allocations and 2010 is no exception.

Thus, as we head into the 2010 En Primeur campaign, clients wishing to secure larger volumes of First Growths might also consider purchasing other classified wines. In good vintages - where the quality is more homogeneous - these lower hierarchy wines are perfect for many occasions and moments. It is a timely convenience that the 2009 vintage produced wines of this type – exceptional quality and ideal for early drinking.

Therefore, clients should consider balancing their allocation requests for 2010 First Growths with a quantity of 2009 lower–classified growths. These 2009s can then be consumed and enjoyed while the 2010s continue to undergo élevage. This creates a win–win situation for everyone involved - including you, the client, The Antique Wine Company as your merchant, and both the châteaux and the négociants.

Our Top Picks from the 2010 Bordeaux Vintage -

Lafite
Palmer
Margaux
Haut-Brion
Haut-Brion Blanc
Vieux Chateau Certan
Le Pin
Le Petit Mouton
Carruades de Lafite
Cos d’Estournel
Angelus
Cheval Blanc

Overview -

It’s likely that those who have invested in fine wine over the past few years were able to enjoy some great bottles during the holiday season; 2010 was another boom year for wine investors.

Economic circumstances over the past several years have had relatively little impact on the overall value of upper-echelon fine wine. This is because during times of prosperity demand for fine wine is driven by consumption. However, during more economically adverse periods, fine wine may also be considered a safe haven thereby resulting in an inflow of capital from investors as they switch to tangible asset classes.

As a commodity, fine wine is rather unique. There is only a finite amount produced by each chateau in each vintage and great vintages get better with the passage of time. Yet, because the product is consumable, while the quality is improving the volume is simultaneously decreasing.

Over a reasonable timeframe this situation can be capitalized on as portfolios can either be partially or fully liquidated and returns are paid out. Additionally, the returns generated may be re-invested into younger vintages, with a few cases skimmed off and consumed for free, having been funded by the profits.

Fine wine investment indices have steadily outperformed the FTSE 100 over the last five years and should therefore be a leading candidate for inclusion in any portfolio as an additional investment class.

2010 Retrospective -

Two topics dominated the fine wine investment conversation over the past year - the much anticipated 2009 en primeur campaign and the effect Asia is continuing to have on fine wine prices.

To say the en primeur campaign was eagerly awaited would be an understatement. Traders, investors, collectors and drinkers alike all held their breath in anticipation. With reports declaring unprecedented quality across the board the big question was going to be what quantities would be available and at what price.  Unsurprisingly, the prices were unanimously high and the first growth wines lead the charge.  Price levels of the very top wines inevitably spooked many prospective investors. This forced those individuals to look elsewhere, often by seeking value lower down the hierarchy of quality. The high scoring ‘Super Seconds’ and the St Emilion Grand Cru Classe wines became areas of heavy investment activity.

One of the unexpected side effects of last year’s campaign was that back vintages of first growths suddenly started to become relatively good values, creating a situation where the en primeur campaign had the effect of pulling up the prices of older vintages. Ultimately, the market illustrated that it was still willing to absorb the high 2009 prices. The question now is, in the short term, whether the wines leading the price charge can keep up the current rate of growth and, if so, will they continue to drag the rest of the market up with them?

As predicted, the Asian market grew considerably over the last 12 months.  The only aspect of the market to disappoint traders, to an extent, was the limited appetite of Asian buyers for the 2009 campaign. On the growth side, the demand for all things Chateau Lafite Rothschild has been unprecedented. This trend was illuminated by the many Hong Kong auctions that brought in stunning sales numbers. The resulting movement in this market sector has had a hugely positive effect on portfolios which include any vintage of Lafite Rothschild or Carruades de Lafite.

Investment Pick of 2010 – Chateau Lafite Rothschild, 2008 – The steady increase in value of this wine over the last 24 months highlights how comparatively undervalued the wine was at release. This growth was only bolstered by the craze created when it was announced that the Chinese symbol for the number ‘8’ would appear on the bottle.  The graph below shows the performance of Lafite Rothschild 2008 vs the FTSE over the last two years.

Looking forward to 2011 -

It is hard to imagine any circumstances that would cause consumers in the emerging ‘BRIC’ economies of Brazil, Russia, India and China to reverse their burgeoning interest in historically Western lifestyle products and symbols, including fine wine.  The biggest of these economies is certainly China. Whilst we currently see China as an abnormal sales market due to the complete fascination with Chateau Lafite Rothschild, we also observe an enormous appetite to learn about wine. As educational programs and opportunities expand there is no doubt that Chinese consumers will begin to appreciate other high-end wines as well.

Which top-tier wines the Chinese market eventually pursues may seem to have a somewhat random nature to Westerner observers. Partly these choices are driven by the translation of the brands into Mandarin and the symbolism of the labels.  In this brand driven environment, it is likely that some of the up and coming wines are going to be estates like Chateau Leoville Las Cases (which translates to “wine of the lion”), Chateau Angelus (“golden bell”), or Chateau Beychevelle (which has a ship on the label not dissimilar to a Chinese dragon boat).

It is also interesting to note that current per capita wine consumption in China is half a litre per person per year. This compares to 55 litres in France and 18 litres in the US.  In the event that Chinese consumption increases to just half of US per capita levels then the whole wine business, on a global scale, will change dramatically.

As we move fully into 2011, it appears that the popularity of Lafite Rothschild in Asia will continue unabated. Be this as it may, I predict that the other first growths will start to enjoy some of the same popularity over the coming months.  Following on Lafite’s tip of the hat to the Chinese market with their 2008 bottle, Mouton made a similar move by offering their 2008 label design to Chinese artist Xu Lei. This acknowledgement of the importance of Chinese consumers will go a long way towards fostering goodwill in the marketplace and increasing demand.  At this stage Mouton is still looking undervalued compared to the other first growth estates, creating an investment opportunity which could prove to be a shrewd long-term move.

Having spent considerable time with Chateau owners and winemakers in Bordeaux over the past 6 months, the word at some properties is that 2010 is reckoned to be an even better vintage than 2009. Yet, given the successes of 2009, are 100 Parker Points going to be enough to sell through the available stock of the 2010 campaign? At this point we have yet to taste the wines or get a solid feel as to whether the market still has deep enough pockets to absorb another top vintage. Although, if the rumours are true, we could be looking at another pair of successes along the lines of the famed fin de siècle vintages of 1899/1900, which would offer investors further opportunities to enhance their portfolios.

To all of our fine wine investors in 2011, here’s raising a glass to a successful coming year and many great returns.

After another night ending at 2am pulling corks in my dear chum, Martin Krajewski’s Chateau de Sours wine cellar, it was yet another early start to day three of my en primeur marathon.

CHATEAU GUADET, St Emilion

Fortunately, the drive to my first appointment at Chateau Gaudet in St Emilion is quick and easy. This tiny property is owned by Guy Petrus Lignac and, remarkably, they have made wine here since before the French Revolution - as a tour of their splendid underground cellars reveals. (It also reveals some splendid older vintages of their wine and some of the cru-classes dating back to the nineteenth century. In other words, it is a real wine lovers treasure trove.)

The estate may be small, with just a few hectares, but the wine has superb provenance – not least because Guy’s ancestors used to own Chateau Petrus many years ago, hence the name. I’ve known Guy and his family for years and I think this is a very special St Emilion, which very few people know about.

This year, they have made less wine than normal because a plot of Cabernet Franc was directly in the line of fire of the hail which hit St Emilion in May. Apparently, it wasn’t just the crop which suffered. The hail stones were so big that they even smashed the shells of the snails!

According to Guy’s well-travelled son, Vincent, ‘we still had a good quality crop though without any problems. ‘But like everyone else, we had to wait for the Merlot to ripen. So for us it is quite high alcohol at 14%. But it was an incredible year. We haven’t seen this level of ripeness since 1947. Even 2003 wasn’t like this.’ Once again, it is an impressive wine made in a more traditional style. I gave it 15/20

Then it was off to Cheval Blanc, where it felt like the entire wine world was beating a path to Pierre Lurton’s door. As ever, Pierre was on terrific form and looking as relaxed as usual. ‘This year, it is a cashmere vintage,’ he told me. ‘But not cashmere prices…’, he joked.

The first wine we tried was the La Tour du Pin which LVMH have just purchased from Christian Moueix and used to be known as La Tour du Pin Figeac. It’s good in 2009, but is a wine for fairly early drinking. Much more serious was Cheval’s second wine Petit Cheval. Counter-intuitively, this contains 65% Cabernet Franc and only 35% Merlot. The result was fleshy, round and ripe with attractive mulberry fruit. I gave it 15/20.

The 2009 Cheval Blanc is another prodigious wine. Once again, Pierre has delivered the goods with a surprising blend of 65% Merlot and 35% Cabernet Franc. Normally, it is 50:50. I found it voluptuous, soft, silky and wonderfully integrated. The fruit is full of damson, black cherry with a whiff of spice and tobacco. The oak is 100% new but such is the concentration, it only comes through on the texture and doesn’t intrude on the flavour. The ensemble is elegant, refined and long. For sure, this will be a vin de garde. I rate it 19 points.

Then just as we were leaving, Pierre quietly asked if we wanted to taste the 2009 Yquem. So he personally led us into the chateau and poured the wine. This is show-stoppingly good and will rank as another great Yquem vintage. For Pierre, it was a combination of 2001’s complexity and 2005’s power.

Best of all, the acidity and sweetness (150g/L) is so exquisitely balanced that the wine finishes almost dry. The other good news is that this is a big crop at Yquem in 2009 which combines quantity with quality. According to Pierre they made approximately the same number of barrels as in the 1893 vintage, a wine which Pierre reminded me we tasted together in London two years ago.


From Yquem to Angelus

Our next appointment was at Angelus, where Hubert de Bouard continues to impress year in year out. Here the blend was 50%, 47% Cabernet Franc and a soupcon of Cabernet Sauvignon. The wine is big, bold and deeply coloured. On the nose it is rich and powerful. On the palate, it is densely packed with morello cherry fruit, tobacco and smoke. A little on the austere side, this is another ‘keeper’ for the long haul. 18 points.

Whilst at Angelus I also tried some other wines on show which Hubert consults at. But to me, some of these wines showed the shortcomings of lesser terroirs. For instance, Chateau Adaugusta was disappointingly tough. However, Clos La Madeleine was much more successful. This little known property could be a good value wine. Chateau La Pointe had also produced a sweetly fruited wine with nice notes of damsons and plums.

So my advice is to pick and choose with considerable care and attention. The press may well go crazy about 2009, saying that this is a good vintage across the board. But in my book, that simply isn’t the case.

Well, that’s it for now. But do tune in for my next blog which will take a look at the 2009s of Gerard Perse at Pavie. Will they be as controversial as they have been in the past? We’ll have to wait and see….