The Future of First Growths

If you follow me on twitter @jvbuncorked, you might have noticed the myriad discussions about the value of first growth wines recently. (Wine newbie? Nancy Parode has a nice post on ‘Into Wine’ that explains the first growth classification.)

So, Guy Collins & Scott Reyburn penned a great article on Bloomberg.com that examines the decline of first growth wine sales over the last few years by major sales houses. Shockingly or not, sales have dropped by a staggering amount.

The article features this impressive quote: ““Bordeaux headlines all our sales in terms of volume and we calculate its top wines have dropped 25 to 30 percent in price at auction since 2011,” David Elswood, international director of wine at Christie’s, said in a phone interview. “The Bordelais were trying to sell wines en primeur in 2011 at prices that seem ludicrous now. As a result, there’s been a revaluation of Bordeaux across the board. I’ve never seen such a ripple effect.”

Revaluation. That word sparks a glimmer of hope in the heart of the oenophile. The mere hope for first growth prices returning to the reach of the middle-class has sparked the discussions on social media: Will Bordeaux maintain the current pricing, or lower the cost of wine futures that most can afford ? According to economic theory, first growth pricing should drop due to the lower quality of recent (2011 & after) crops and bottle tastings  after the meteoric rise in cost thanks to the high demand for the quality 2005, ’09, and ’10 vintages. But will they?

For wealthy collectors, first growths are a commodity to be bought, held, and sold.  For oenophiles on the other hand, acquisitions can be incredibly satisfying- with the end focus of said acquisition to be the hope of incredible enjoyment of a rare and priceless beauty after proper aging. Sadly, over the last few decades the industry has seen massive increases in pricing that, while great for both the winemaker and the wine collector, makes the ability to even to taste a first growth nearly impossible for the average wine lover. In the 1980s, one could pick up a first growth for around $40. By 2001, the cost for 1998 First Growths were $170-235 per bottle.  By todays standards, it’s more than ten times that price, while the dollar is valued at about one third of what it was in 1980.  For example, the 2011 Chateau Latour currently sells for $688 per bottle versus the ’09 vintage at $2000 at Sotheby’s Wine Merchants. Among my favorites, the formerly affordable Chateau Margaux is available from Sotheby’s in various vintages from $400 to the ’94 vintage to $1400 for the 2009 vintage, and only $1500 per bottle for the rare 1982 vintage.

1982 Bordeaux graph from Wine-Searcher.Com

Not sure where you stand on this issue? Well, the UnCorked position on First Growths is this, in a word:

Revaluation.

Global wine consumption has increased in recent years, and prices have risen in conjunction with demand and supply, skyrocketing due to high ratings of the ’09 and ’10 vintages. As both demand and ratings have fallen since the 2010 vintage, the market expects a correction in the pricing of first growth futures. In “average” vintages for these top wines, the wine lover may find an opportunity to buy, sometimes only to taste, these precious commodities, while in the 99 and 100-point vintages it is winemakers, collectors, and only the wealthiest of oenophiles who can enjoy the benefits. It is our fervent hope that case and bottle futures of first growths  correct back in the reach of the “average” consumer, and not remain in the reach of only the 1%.

à votre santé!

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