Today’s global wine is market is in net oversupply, but in specific markets, it is still growing. The US is the world’s leading wine consumer by value and growing. According to the 2009 Impact Databank, Americans are buying more of the big “brands” – the everyday, fruit-driven, easy-drinking and inexpensive wines. In Germany, demand exceeds supply by 2 to 1, at average prices of a meager €2.00/liter primarily purchased at discount chains. Over the past 25 years, demand has shifted from sweeter whites to red wines. Asia is the fastest growing market and the major producing countries have focused their resources in capturing a share of this market. While France is the leading imported wine in Hong Kong and China by value and volume, Australia, US and Chile are catching up. In Asia, red wines represent no less than 75-80% of of sales, so it’s no surprise that the leading suppliers are major red wine producers. While the average price of wines is currently high at over €7/liter, 49% of retail sales are purchased at supermarket chains such as Wellcome and ParknShop (USDA Foreign Ag. Service) with sales through this channel among the fastest growing alcohol beverage categories per AC Nielsen. So I think it’s just a matter of time before prices equilibrate given the competition and the increasingly integrated global wine market.
How does Bordeaux fit into this fast-changing marketplace? Bordeaux is a large wine region, about 300,000 acres (six times the size of the Napa Valley). So while the established media covers the mere five percent or so of the expensive and often pre-sold ‘grands crus classes’, the majority of the 10,000 producers in Bordeaux are producing inexpensive, everyday Bordeaux, primarily cabernet sauvignon and merlot blends.
Every time I visit Bordeaux, I see more changes that encourage me that the producers are becoming demand-driven vs. resting on their traditions. For example, changing the looks of their labels so that they are more eye-catching like Chateau Le Sartre in Pessac-Leognan, or including varietal information such as Chateau du Cros’ Bordeaux “Sauvignon” white. More producers are closing their wines with screwcaps even at the Cru Classe level such as Chateau Couhins-Lurton, and liking it. More chateaux are opening their doors to visitors and recommending food and wine pairings with their wines. While the majority of Bordeaux are reds and they produce notable dry whites and sweets, they also produce other categories of wines that are in high demand right now in the global market: cremants – the sparkling wines made in the traditional Champagne method of second ferment in bottle – as well as roses. The cremants and roses are made with the locally authorized grapes, so they are distinctly Bordeaux. We sampled quite a few of these last week and it was refreshing to try something new. The roses, being made from merlot and/or cabernet, are deeper colored with more black fruit and subtle structure than the paler, rasberry scented roses of Provence – thank God for differences in rose!
And, the wines are becoming more fruit-driven. Part of this is a result of winemaking techniques such as cold-soaking reds which bring out the aromas, using varietal-enhancing yeasts and generally, fermenting and/or ageing in temperature-controlled stainless steel vats at cooler temperatures to retain the fruity esthers. But the other reason is simply riper fruit achieved by better canopy management practices and a warming climate. Climate change has encouraged producers to slowly increase plantings of late-ripening, thicker-skinned reds such as petite verdot and cabernet franc. Even back in November 2006, Edouard Miailhe of Chateau Siran in Margaux told us they had been increasing their petit verdot up to 7% of vineyards and last week, vigneron Philippe Bardet of Saint-Emilion said cabernet franc has increased from 20% to 40% of plantings. We tasted single-varietal petit verdot from Chateau Paloumey in the Medoc and single-varietal malbec from Chateau Magdeleine Bouhou in Blaye Cotes du Bordeaux on the right bank.
So is Bordeaux still relevant beyond the luxury wines and complex names? Of course they are, consumers just need to discover what’s out there!