Over the past few months, the world has experienced the greatest disruption of our lifetime and while we have certainly not reached the end of the long road back to normalcy, wine has been a great source of comfort to many of us during this difficult and isolating period. However, while choosing which bottle of wine to open at the end of another day spent at home has certainly been the consideration of so many of us, the En Primeur release of the 2019 Bordeaux vintage is likely to have been the last thing on the minds of most. However, after a considerable amount of discussion, polling and debate amongst vignerons and merchants around the world, this time will soon be upon us as we now prepare for the first releases as early as next week. So what can we expect? There is no question that the devastating effects of the Covid-19 pandemic will have a significant impact on how the 2019 Bordeaux vintage will be both perceived and received by the global marketplace, however, first and foremost we must analyse the quality of the vintage independent of any other external factors. In this respect, there is no doubt that the 2019 vintage can be considered a very good if not excellent vintage with some wines surpassing the already outstanding quality of 2018.
The Growing Season: To Every-Thing, There is a Season
The ISVV (Institut des Sciences de la Vigne et du Vin) at the University of Bordeaux lists five conditions that can account for a perfect red Bordeaux vintage. They are: 1. and 2. A temperate Spring to facilitate a quick flowering and fruit-set 3. A warm and dry July to allow the gradual onset of hydric stress before véraison (when the grapes change colour). 4. Continued warmth and dryness into August and September to allow a prolonged and complete ripeness of each grape variety. 5. Clement weather during the harvest to allow vignerons to choose their ideal picking date without any fear of dilution or rot. In the end, the 2019 vintage managed to fulfil most of these requirements although the degree of success will vary between appellation and individual chateaux.
Winter and Spring: Flip It and Reverse It
The first several months of the 2019 growing season were significant due to one of the sunniest Februaries and coldest Mays in Bordeaux’s history, so how did this reverse of seasons affect the flowering and fruitset of the vines? 2019 began with unusually mild weather and little rainfall as well as an uncharacteristically high number of sunshine hours and some downright summery days which had the Bordelais out on their terraces in the month of February. As a result, the vines were awakened from their slumber with the first signs of vegetative growth reported up to two weeks earlier when compared to 2018. However, the inevitable risk of a precocious budburst is that it puts the vines at greater risk to frost damage and an unusually cool April and May kept many vineyard teams glued to their weather apps, particularly on the evenings of the 13th of April and 5th May. Thankfully, they were spared the same icy peril which affected so many in 2017 with very few casualties of frost reported in this vintage. As a stark contrast to the balmy start to the year, May 2019 was one of the coldest on record as well as being punctuated by frequent rainstorms, continuing well into June, which caused challenges and problems to be solved at the start of flowering, which typically occurs in late May and early June. Thankfully, most estates recorded a successful flowering with only a small number who suffered reduced yields from coulure and millerandage. By the 20th June, the dry, hot summer weather had finally arrived with temperatures quickly spiked to 37°c in some areas at the end of the month allowing for an even fruitset, thus fulfilling the first two stages of the growing season for the majority of estates.
Summer: The Heat is On
The summer heatwave continued with one of the hottest and sunniest Julys on record with several days with reported temperatures of over 35°c, eventually peaking on the 23rd July at a scorching 41°c. While this heat was certainly extreme, thankfully there was enough water accumulated in the soils during the rainy spring months and periodic summer storms to maintain a consistent level of hydric stress on the vines and to prevent them from shutting down entirely. Early August saw the onset of veraison – which would continue heterogeneously across estates and appellations throughout the month. September added the icing on the cake with several weeks of picture-perfect hot days and cool nights, the latter of which infused the grapes with the much-needed acidity that would eventually allow for balanced and structured wines.
However, September was not without a scattering of rain showers across the region during the third week of the month, just as the Merlot vines were arriving at peak maturity, forcing a decision to be made of whether to harvest the grapes before or after the arrival of the rain. Many welcomed and patiently waited out this rainfall, as it allowed for a prolonged period of ripening resulting in lower alcohol levels despite the heat of the vintage, particularly on the Cabernet plots. We can conclude that at least on paper, the 2019 growing season was technically a success.
The New Bordeaux: Ch-ch-changes
There is no question that 2019 was a vintage marked by the record-setting summer heat wave, but the reality is that the permanent effects of climate change are becoming the new normal in Bordeaux. Over the last decade, vignerons have begun adopting new techniques both in the vineyard and in the winery to manage the risk of overripeness, the higher levels of alcohol, and to guard the all too important acidity levels required for balance and freshness. Beyond just the world of the classified growths, the French government as granted unprecedented permission to introduce seven new grapes to be included in Bordeaux and Bordeaux Superieur wines includingMarselan, Touriga Nacional, and Alvarinho which have chosen due to their tolerance to heat and their late ripening tendencies. Meanwhile the future of the Merlot grape, which ripens relatively early is particularly susceptible to becoming over-ripe with undesirably high levels of sugar and alcohol is uncertain as many Right Bank producers have begun to increase the amount of Cabernet Franc in their blend instead. The alcohol levels of the 2019 vintage are on par with that of 2018, with the official average being recorded at 14% abv. Most winemakers who have overseen several decades worth of vintages in Bordeaux, will recall their struggles in reaching even 12% abv in the tempestuous maritime climate of Bordeaux, but the challenges they once faced have now been transformed completely by the new reality of Bordeaux’s increasingly turbulent weather patterns.
Our Opinion: We’ve Only Just Begun
While normally at this point in the year, our team would have made the trip down to Bordeaux to spend a week thoroughly tasting our way through each and every appellation first hand, unfortunately Covid-19 had other plans for all of us. However, we are confident in our ability to form an early picture of this very promising vintage, based on our frequent conversations with our trusted partners in Bordeaux as well as the early reports from the critics who were amongst the first round to receive samples delivered to their homes. Over the next week samples will be arriving to our own homes and virtual tastings will be held with key members of nearly every top chateaux in Bordeaux, which will allow us to fine tune our opinions and recommendations. We will, of course, continue to report our findings and opinions throughout the entire process, but so far what is already clear is that 2019 cannot be neatly summed up as a Left or Right Bank vintage, a Merlot or Cabernet vintage or even as an opulent or classic vintage. While quality is considered homogeneously high, as with 2018, it is the individual decisions made by the chateaux in the vineyard and the winery, which leave the greatest impact on the style of the wine as opposed to an overriding character of the vintage that unites all of the wines. Inevitably one always looks to compare the new vintage to those of the past and while there is never a perfect science, thanks to the fickleness of Mother Nature we can conclude that while on the Left Bank, 2019 is already drawing comparisons to the elegant and structured style we so adored in the 2016 vintage, the Right Bank is said to boast the same rich and concentrated fruit that wowed us in 2018.
From the Critics: I Heard It Through the Grapevine
While we are still awaiting official reports from publications like the Wine Advocate and Vinous, we can rely on the word of a few trusted names who are able to report from the ground, in Bordeaux itself. Jane Anson of Decanter has been encouraged from her early tastings, “I would say the wines are going to make it worth your while” while Gavin Quinney has reported on behalf of Jancis Robinson’s Purple Pages that, “Bordeaux 2019 is a very good to excellent vintage.” Finally we can always rely on James Suckling to be one of the first to share his thoughts from his first round of tastings based in Hong Kong and his enthusiasm for the vintage is clear, “The wines are outstanding quality, from simple Bordeaux to cru classé […] Many of the 2019 wines are at the same level of quality as 2018, albeit with less exuberance and plushness in fruit and tannins. The wines seem more typical for Bordeaux – which is a good thing – with a balance of alcohol, cool and blue fruits and fine linear tannins that are refined and driven […] The sleek tannins and pure fruit character are what I expect in Bordeaux … They are all just really good quality wines, and some are fantastic.” While we will reserve our own official judgment until we have had the chance to start trying our own samples at the start of next week, we do anticipate that critical scores are likely to be on par with those and given that the prices of the 2019s are rumoured to be decreased up to 25% from last year, this is a vintage which will absolutely be one to follow.
Market Conditions – Unprecedented and Expectantly Acknowledged
The world is currently navigating terrain for which it has no map. There has been turmoil across the markets and wild swings in volatility across many. However, fine wine has faired well with only minimal contractions posted across the investment sector. A comprehensive breakdown on the health of the market can be found in our recent Market Update here.
Another facet for consideration in this year’s En Primeur campaign is the ongoing trade tariffs subjected to certain EU good by America. These include the wines from Bordeaux and will therefore likely have an impact on the demand for the new vintage stateside. However, one caveat is that as they are an import tariff, whether they’re still in place by the time the wines become physical in two years is unknown. Further to this, those trading wines within the UK bonded system would also escape the tariff. However, all things being equal, US buyers wishing to take delivery of their wines, will be subjected to a 25% charge when the wines land on US soil and they are disenfranchised with En Primeur in much the same way Asian markets are – immediate gratification being the order of the day. Bordeaux are turning back to their traditional markets, after pegging such hope on shiny new Asian markets, who are so important to secondary market trading. However, when it comes to en primeur, ‘not everything that glitters is gold’, the old world know en primeur and how to make money from it.
The current GBP/EUR FX rates are always a consideration during the En Primeur campaign. Releases are priced in Euros and then sent Ex-London to buyers in the UK. The 2018 campaign kicked off on 16th April last year amongst considerable volatility in the GBP opening the door to changes in relative release prices overnight. However. Since then GBP has dipped again from 1.16 but recently found some stability currently sitting at 1.12. Although GBP continues to be depressed by recent Macro events, there is nothing immediate on the horizon to suggest a big swing is incoming, but FX levels always need to be closely monitored during an En Primeur campaign. In the time since the start of the 2018 campaign, the GBP/EUR exchange rate has slid 2.81%. Any discount will need to adjusted for this.
The Bordeaux market remains flat but the incoming vintage could be the spark needed to reignite the region. In times such as these investors are looking for options to place their capital and a new Bordeaux vintage could be the answer to their prayers. As previously mentioned, the campaign will live or die by pricing but a vintage with similar quality and a discount to previous vintages would inevitably whet the appetite. If the critic scores match up to the reports and a discount is forthcoming, we will be strong advocates of the campaign.
Pricing – ‘Do as I say not as I do.’
Considering current market conditions, the pricing of the 2019 campaign is more important than ever. Sensible release prices are needed to break free of the current Bordeaux market stutter and garner heightened interest in the vintage. The reports are of another good/excellent vintage so providing the scores follow suit, the fundamentals are there. We are currently positing that the 2019 vintage has a similar quality to 2018 but is stylistically closer to the classicism of 2016. Equally important is that the Bordelaise at large and the Chateaux owners are aware the impact the current pandemic could have on the campaign and that a sensible pricing structure is essential. The campaign will live or die by the pricing choices made by the Chateaux and as always, be led by scores.
We have heard much hyperbole regarding pricing discounts to 2018, with some mentioning numbers in the fictional world of 30%. Owners might triumphantly declare this is what their market needs, for everyone but them that is – once you make this attitude universal, the results are predictable. I’d set the lower limit at -15% though -10% is far more realistic and would be sufficient to ignite sales. Such discounts would present an interesting opportunity for collectors and investors. A discount to release prices is a nod to the current climate, yet by the time these wines are physical (Spring 2022) the health of the economy may be a different story. Such discount would allow investors who bought En Primeur to be rewarded as the wines rise further to their score dependent equilibrium price. Therefore, a discount to the 2018 vintage with a similar, or better, quality will stir up considerable interest in the vintage and leave more on the table for potential investors looking to take positions in the new releases.
Historically the First Growth wines, minus Latour who no longer participate in the En Primeur system, are representative of the Bordeaux campaign overall. The table below is demonstrative of the relative value that would be present in the four First Growth releases if the Chateaux adopt a discount to the 2018 release prices.
However, such discounts are speculative until the accompanying scores from the major critics, namely Monica Larner of The Wine Advocate, Vinous Media and James Suckling, are released. In the absence of the quantitative marker scores provide, we can compare recent vintages to the release price of 2018, with a 10% discount.
As can be seen in the chart above, a discount of around 10% on the 2018 release prices presents an interesting opportunity. A short-term upside is present averaging 12.13%. When factoring in current market conditions, we predict the 2019 vintage will take two years to appreciate to the current market prices of the 2018 vintage, making the First Growths an attractive acquisition at this price. A suggestion of the levels of appreciation at various discounts can be seen in the table below.
Possible Appreciation to current 2018 Market Price with Varying Discounts:
If a discount is present when the campaign starts in earnest, this could be a vintage for investors and collectors to stock up on. Especially if the scores are close to those seen in 2018. In times such as these there are little options for investable commodities that could present the sort of returns possible from the 2019 vintage. If the chateaux release with a discount greater than 10%, then the campaign could garner huge interest from those looking to speculate or stock up on wines with an early similarity to the legendary 2016 and 2018, but a healthy discount to recent pricing.
There are too many unknowns presently to submit a final En Primeur report. We will add updates and fill in gaps. We will add our qualitative thoughts as we taste in the coming weeks and update our graphing information once the major critics release their scores. However, Chateau Latour are releasing their first post en primeur vintage tomorrow with the 2012. Major releases could follow Latour’s release tomorrow with verve and vim, it won’t be a long campaign.