Tuesday, 12 April 2011

Rely On The Wine In The Bottle, Not The Price On The Label

You have carefully tended to the soil, inserted new stakes, planted new vines, spent days pruning the old vines, strung thousands of meters of wire, and tied down each sprout. The buds are starting to sprout their first leaves, and soon it will be time to prune the first grapes. You will carefully attach the growing vines to the wires as they grow to more than a meter above the stalk of the vine. Then, as all farmers do, you will pray for good weather. If all goes well you will harvest rich, sweet grapes in the fall.
Domaine de Valmengaux

Then you will carefully make the best wine you can. After it has finally gone into the new oak barrels you will face perhaps your biggest challenge. What exactly will you do with the thousands of bottles you have produced?

With about 13,000 grape growers/wine makers producing 800 million bottles annually Bordeaux is easily the largest wine region in France, but it is by no means alone. Other regions like Burgundy, the Loire valley, the Rhone all have their distinctive grapes and superb wines.  Then there are the major wine producers like Germany, Italy and Spain, not to mention the so-called New World wines of North and South America, Australia, and  New Zealand. On top of all this global competition the domestic French market for wine is shrinking. Optimists will tell you that although the French are drinking less wine overall, they are drinking better, i.e. more expensive, wine.

Your task is made even more complex with a classification system in the Bordeaux region that cynics say merely supports higher prices in regions that may or may not produce superior wine. The classification system for Bordeaux wines began in 1855 when Napoleon III wanted to impress visitors to the Exposition Universelle de Paris and requested a classification system for Bordeaux’s best wines – based on price and reputation. The classification of these five vineyards – Chateau Latour, Chateau Margaux, Chateau Lafite (now Chateau Lafite Rothschild), Haut-Brion, and Mouton (now Chateau Mouton Rothschild) – has not been changed in 156 years, and there is no sign of it changing anytime soon.

A more detailed classification system for different regions, appellations, was introduced in the 1930s and includes well known regions like St- Emilion, Pomerol, Graves, subdivisions of Medoc like St Julien and Paulliac, and many others. Similar to the 1855 classifications these regions were established according to price, reputation, and the all-important political clout of the local vignernon. The prized – and pricey – St Emilion appellation is one of the larger ones and produces about 9 million bottles a year. This presented a problem for the very top of the heap like Cheval Blanc and Ausone who did not want to be lumped in with the lesser known brands in St Emilion. So this appellation is further subdivided into 1er Grand Cru Classe A (Cheval Blanc and Ausone), 1er Grand Cru Classe B (11 vineyards including Angelus and Figeac) and mere Grand Cru Classes – the remaining 55 vineyards. Any vineyard not fortunate enough to be included in an appellation is dumped into the general Bordeaux or Bordeaux Superieur classification. And this is precisely where great values can be found.

Faced with very stiff competition, rigid classification system, and declining prices for ordinary wine many of the Bordeaux vignernons don’t even bother competing. They either sell their wine wholesale to dealers who stick a label on it or they sell grapes to the cooperatives who make the wine and market the wine under different labels. Wines sold this way are not allowed to have labels that include the all important mis en bouteille au chateau – bottled at the chateau – or use words like Chateau, Domaine, or Clos in the name of the wine. This type of production accounts for about half the entire Bordeaux production, and these vignernons are lucky to get a wholesale price of €1.50 per liter for their efforts.

At the very top of the pyramid are the great names like Haut-Brion, Petrus, Cheval Blanc, Ausone, Margaux and others who can sell their wine for hundreds if not thousands of Euros per bottle. Much, if not all of their production is sold even before the wine is bottled. How much of this is attributable to great wine and how much to very, very skillful marketing is a question that continues to generate a great deal of debate in the wine industry. At least one scornful (envious?) competitor says these prices are merely taking advantage of naïve consumers looking to impress their friends rather than actually enjoy the wine.

In the middle between the wholesale producers and the lucky ones included in a particular appellation are thousands of growers making their own wine and struggling to find a niche in a crowded market. Some come from families that have been in the wine business for generations and others have come from varied backgrounds drawn by the lifestyle and challenge of making a good wine.

Vincent Rapin of Domaine Valmengaux was a jazz bass guitarist before coming to the Bordeaux area about 10 years ago when he bought about 5 hectares of vines and began making organic wine. He says it was partly a life-style decision for himself, his wife and their three children and partly the opportunity to pursue his interest in organic wine production. “We have the life we want to have.”
Vincent Rapin

Joep Bakx, owner of Clos Monicord, had a very successful career managing major hotels in several European cities and bought Clos Monicord 10 years ago. Last year he bought an additional 15 hectares, gave up the hotel management business and became a full time vignernon. It is a true family enterprise with his wife Mireille and daughter Audrey playing key roles in the company. Again, it was the lifestyle as well as the opportunity to make good wine that encouraged the move. After an exhausting day in the fields we would sit on the porch with a glass of wine watching the sun slowly set while a thick steak was grilling on the barbeque. “You know, this really is a good life style,” he would exclaim.
Audrey and Joep At His Birthday Party

But how do growers like Joep and Vincent actually compete and succeed in this market? “The first, and most important requirement, is to make a very good wine that you can sell at a reasonable price,” says Joep. A “reasonable” price for many of the smaller growers is €15 - €20 per bottle compared with the sharply higher prices commanded by wines from any of the well known appellations. One of the reasons the smaller growers can do quite well with the lower prices is that their major investment – the land – is so much less expensive. Many vineyards in St Emilion, for example, would sell for more than €1 million per hectare – if you could find any for sale. Very good land about 10 miles west of St Emilion with virtually the same soil composition sells for a very small fraction of that amount. In addition to a much more reasonable price for the land your profit margins are increased by doing most of the work yourself and valuing your time at about 15 centimes per hour.

Like many of the smaller growers they prefer to market their wine themselves rather than rely on the negociants, dealers, or sell in bulk to supermarkets where wine can be found for €2.50 per bottle. For their part the dealers prefer to sell appellation wines because of the higher prices. One London dealer somewhat ruefully explained to me that while he knows there is real ‘value for money’ in wines labeled Bordeaux or Bordeaux Superieur he doesn’t make the effort because it is so much easier, and more profitable, to sell high priced wines from a well known appellation.

Joep and Vincent each export the vast majority of their production. And this means a constant round of wine fairs, meeting with importers, sommeliers from major hotels and restaurants, and other major buyers in an effort to demonstrate the quality of your wine, to differentiate your wine, to educate the customers that good wine does not have to cost hundreds of Euros per bottle.

“The customers need to learn to focus on the wine in the bottle and not the price on the label,” Vincent says.

These education efforts require time and a great deal of travel. Joep and Audrey loaded up their car with a few cases and drove more than 11 hours to a wine fair in Amsterdam. There he arranged sales to an importer in Holland, met with importers from Belgium, and renewed other contacts in the food and beverage business. Trips to other countries in Europe and Asia are on the agenda. Other than the fairs he arranges tastings for importers and journalists in the wine trade to introduce Clos Monicord and convince them of its quality. When not in the fields or travelling Joep, Mireille and Audrey are on the phone following up leads from their extensive contact list. In short, they are trying to build demand for his wine from the ground up.

For his part, Vincent spent the better part of a week at a fair in Dusseldorf where he too met with existing and potential customers. He is planning a trip to China, a country that has become one of the biggest buyers of  Bordeaux wines.

“They are in the early stages of wine buying and still rely largely on the major names. But they have 5,000 years of history, are very smart, and will soon learn the value of more moderately priced wines.”

Both these growers admit that the selection of a good wine can be confusing for a customer looking for a decent bottle to go with his dinner. Where does he start? Reading the label closely is useful to understand what you’re drinking. Then experiment with moderately priced wines until you find one you really like. Watch out for the cork. A bad cork will allow too much oxygen into the bottle and essentially ruin the taste of the wine. Don’t be afraid to return the bottle. When this happened to me in London the dealer readily accepted it and explained that at least 8% of the corks are bad and leave the wine tasting very strange.

Don’t be intimidated by all the self-proclaimed wine gurus. Find something you like, and you will enjoy having a second bottle with your meal. Drinking wine is supposed to be enjoyable, not a test of your sophistication. And as you drink it spare a thought for the grower who worked so hard to produce the wine and make sure it got into your hands. It really was a labor of love and respect for the product.

1 comment:

sunpentown wine coolers said...

Yes you are right because most of the wine lover pay for the taste that they like not for the wine that available in cheap price. If you have a great wine taste you can capture more customer.