Reflecting on 2011 Bordeaux, and Speculating on Prices

The Bordelais have a great chance to cut prices and win back American consumers. Will they take it?
Apr 10, 2012

It's been a busy two weeks, covering a lot of ground while visiting more than two dozen estates and then tasting over 400 barrel samples of Bordeaux's newest vintage.

The 2011 vintage is shaping up as one of freshness and purity for the region's reds, with brighter acidity and markedly lower alcohol than 2009 and 2010, two highly touted vintages. 2011 won't be a classic vin de garde year by any stretch, and it seems to be in a similar vein to the 2001 vintage, which has come on nicely after 10 years of cellaring, and is now offering lovely, mature wines.

For now, the question everyone is asking is, "What about prices?" The 2011 vintage is good, but not great. There are inconsistencies in quality as well as yields, from estate to estate and appellation to appellation.

But what a golden opportunity the 2011 vintage presents for Bordeaux. The opportunity isn't for consumers to snap up values. Rather, it's for Bordeaux to reposition itself. To win some hearts and minds back. To prove it can be as hip, as fun, as part of the everyday wine conversation as Burgundy, Rhône, Italy, California. There's being a benchmark, and then there's setting an example.

The 2011 vintage provides a chance for the Bordelais to reengage with the baseline Bordeaux consumer—the folks who like to actually drink wines rather than use them for speculation. The excesses of 2009 and '10 have fatigued the market to the point that it will not accept another high-priced vintage, no matter how the château owners spin it. The smart Bordelais will see this opportunity to get back in favor with a consumer that was left behind by the hype in '09 and '10.

Prices should obviously come down. But the consumer perspective and château-owner perspective are two different things.

"On one hand I'm obligated to get the best price I can for the wine," said one director of a prominent Médoc estate. "But at the same time we also need to let the market catch its breath, especially in a year like 2011. Finding the balance between the two in this en primeur campaign is going to be tricky."

Bordeaux is aware that they are losing the younger generation of wine drinkers in the U.S. While a small handful of elite châteaus have been insulated against this trend by emerging markets in Asia and elsewhere, the rest of Bordeaux has suffered. The image that Bordeaux is only for the wealthy and only for an older generation of drinker has taken hold, and many young American consumers, sommeliers, restaurateurs and importers have focused their attention on other regions. From Argentine Malbec to Jura whites, the wine world is far more diverse, eclectic and exciting than ever before. There's more choice at better pricing, and consumers are far more willing to experiment with wine than to chase escalating prices on storied labels of the past generation.

No one is saying the best Bordeaux aren't among the world's best wines. And in a free market, a château should be able to get the best price it can for its wines. There are upsides to the these recent bountiful years in Bordeaux as well. The influx of cash from higher prices (2000 and 2005 were also high-priced vintages) has led to major reinvestment in winery infrastructure and vineyards and the wines have improved. The best estates and their often highly-driven owners are in an open arms race, competing with each other to make the best wines possible, whether it be through the use of optical sorting tables, increasingly smaller vineyard parcel vinifications or other new ideas and technology.

But the en primeur campaign is just like the region as a whole: It's driven from the top down. The elite châteaus often play a game of pricing chicken, to see who will come out with a price first. From there, based on the market reaction to whichever big name does go first, the other châteaus' pricing falls into line. Egos can play a role in the process, which is never a good thing. And some elite châteaus are able to stuff their wines into the market at whatever price they dictate, because the négociants who take the wine don't want to lose their place in line for when the next great vintage comes along. Consequently, it's all too easy for the vicious cycle of extremely high prices for the top wines to continue while the majority of the Bordeaux market suffocates thanks to an increasingly disinterested U.S. market. That is why now is the time to make a true statement. With the 2011 vintage, Bordeaux can say they want their wines to be wines for all consumers. How?

A 50 percent price cut from the 2010s would make people take notice—and that's a cut that needs to come right from the top.

For the châteaus that release their wines at hundreds of euros per bottle, ex-cellar, a cut of 50 percent won't mean those wines suddenly become table wines for you and me. But that cut won't hurt those châteaus either, whose cost per bottle is generally the same from year to year and little different from any other château in the region. What it will do in turn is force the market down for everyone else, but not on an equal percentage. A quality cru bourgeois or petit château who released their wine at 15 or 20 euros in the past two vintages (which might show up at $45 to $60 retail in the U.S.) doesn't have to cut to 7.5 or 10 euros to keep pace. They need only cut prices by 10 to 20 percent, a level at which they still make a fair profit for their efforts while their wines remain excellent relative values in the marketplace. If American consumers don't see major price drops on the 2011s, they will turn a cold shoulder to the wines.

The great growths and most expensive wines live highest on the hog during the great years. They should shoulder some of the burden for the region as a whole and make the biggest sacrifices in the leaner years. If the region wants to win back American consumers, it has to overdeliver in the more modest years. The 2011 vintage is the perfect opportunity for Bordeaux to do just that. And opportunity doesn't knock twice.

You can follow James Molesworth on Twitter, at http://twitter.com/jmolesworth1.

More Bordeaux Barrel Tastings 2011

See More

Bordeaux 2011 Futures Fizzle

Jul 10, 2012

Bordeaux Futures Hit the Market, But Is Anyone Buying?

May 15, 2012

A Visit to Vignobles Gonet-Médeville

Apr 18, 2012

Château Lafite Rothschild Releases Its 2011 Price

Apr 17, 2012

Château Latour Abandons Futures System

Apr 16, 2012

France Bordeaux 2011 Bordeaux Barrel Tastings 2011

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