Like much of the wine industry, the Bordeaux En Primeur has become an exercise in social distancing and remote gathering. But this has done little to dampen the excitement that the event inspires among connoisseurs and critics. This spring, the Bordeaux 2020 is shaping up to be a high-quality vintage, which is a good cause for cheer in the fine wine investment circle. Factors like small production volumes and suspension of US tariffs have also caused a renewed interest in Bordeaux, and the 2020 vintage seems all set to grab eyeballs.
What is the Bordeaux En Primeur?
Bordeaux En Primeur is the annual showcase of the region’s vintage harvested in September the year before. Traditionally, wine merchants and industry members would flock to the region’s vineyards at this time of the year to taste the wines and rate them.
The aim is to allow buyers to sample the vintage early so they can assess its quality and influence its release price and market value. Customers can invest early in some prized wines that they will take possession of in a couple of years, paying less now than what the wines will be worth later.
The custom of selling wines En Primeur goes as far as back as the 18th century. The exchanges are essentially pre-booking of wines since the vintage is still in the maturation stage when this happens. They can only be bottled and delivered at some time in the future, usually 18 to 24 months later. But acquiring them at this time for a long-term hold means the investment is positioned for growth and returns.
The En Primeur is a practice exclusive to the Bordeaux appellation. It is restricted to only blue-chip producers – here, participation is based on reputation.
Bordeaux 2020 En Primeur will be different
2019 was a highly unusual year for Bordeaux En Primeur because of restrictions due to the pandemic. Producers sent out samples around the world and tastings happened remotely. Although the vintage was widely deemed excellent, there were flaws in the process. Young wines do not travel well and their quality suffers from long journeys.
Even so, this year’s campaign is set to be a close repeat of last year’s. The dates have been pushed back to May when producers will send out samples to merchants and the press. The Union des Grands Crus de Bordeaux will host tastings in a few key international cities around the world. According to some reports, chances remain that a spartan and small-scale En Primeur will be held in or around Bordeaux.
The word on the Bordeaux 2020 vintage
The general sentiment is that the quality of the 2020 vintage is at par with 2019, and somewhat even better than the wines of 2018, both of which were stellar years. But right now, this is an opinion shared by the estates – such as the Classified Growths and similar properties on the Right Bank – and only time will tell if the wines live up to the expectations. High quality is usually equated with homogeneity, but experts are suggesting that the quality of Bordeaux 2020 will be superior yet variable due to terroir differences and climate change.
In tricky market conditions, this may be a useful combination, according to Colin Hay of The Drinks Business. Hay predicts that prices will either remain similar to 2019 or fall further, in which case a number of wines would sell through very well. Some wines would also be sought after in the secondary market.
The sentiment is echoed by Michaël Peltier, Senior Fine Wine Specialist at Millesima, the fifth-largest buyer of Bordeaux wines En Primeur. If expected pricing and quality are similar to 2019, the quantity will play a key role in the future performance of 2020. Yields have been much lower than the previous years for many estates because of drought conditions. This makes 2020 a promising vintage for investors and a worthy addition to any wine cellar.
In fact, 2020 has been one of the three lowest yielding vintages in the last decade. The year’s total production was 10% lower than it was in 2019 and 2018, with yields of some estates down by as much as 25%. The challenge for investors will be to get a hold of the highly rated, limited supply wines at the right price. These will likely offer excellent potential for long term growth.
But chances of a price increase cannot be totally ruled out in light of low yields in 2020 and potential frost damage in 2021. Some experts have predicted price rises to the tune of 10% in Euro terms or 5% in Pound Sterling. Compare this to last year’s Bordeaux prices for the 2019 vintage, which were about 15% less than the 2018 prices.
Success, in the end, will be determined by quality scores and perceived value against physical availability of the wines. There is always some amount of risk involved, but positive sentiments abound surrounding Bordeaux. Earlier this year, the Liv-Ex Power 100 Brands established the continuing reign of the top brands of Bordeaux. More recently, the region’s market share went up to 41.6% from 33.2% in January.
