Bordeaux Rekindles US Love Affair

American consumers are flocking to Bordeaux, but is it at the expense of Napa and Burgundy?
© Shutterstock | American consumers are flocking to Bordeaux, but is it at the expense of Napa and Burgundy?
Americans have rediscovered their love of Bordeaux, but is the relationship sustainable in the long term?
By James Lawrence | Posted Saturday, 04-Sep-2021

The Bordelais rarely seek out vintages from other parts of the wine universe, yet they may want to pop the Champagne corks after the past few months.

Sales of Bordeaux red, white and sparkling in the US rose sharply between June 2020 to May 2021, with receipts singing to the tune of $326 million. According to the Bordeaux Wine Council (CIVB), sales increased by 21 percent in both volume and value – this is the highest sales increase recorded over a 12-month period since 1986. Over 2.4 million 9-liter cases were cracked open in the world's biggest wine market.

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However, this may be small fry compared to the opportunities on the horizon; the US and EU agreed in June to suspend punitive tariffs on wine for five years. European Commission President Ursula von der Leyen declared that: "The longest trade dispute in the history of the WTO is over." By 2025, there could be a bottle of Château Margaux in every garage in America.

The Bordeaux establishment should probably feel quite smug. The initial decision to suspend US/EU wine tariffs was only reached in March 2021; it's quite an achievement to expand market share during a 10-month internecine trade war. By volume and value, the US is currently the second-largest export market for Bordeaux wines. So there is clearly potential for further expansion. The question is: will consumers maintain their appetite for Pauillac and Bordeaux Blanc?

Wine brokers are convinced that the suspension of import tariffs in March has probably skewed the figures to a certain degree. "The abolition of tariffs would obvious lead to a surge of wines being imported into the US by merchants, as the tax is only payable on entry into the country," says Matthew O’Connell, head of investment at Bordeaux Index.

"I suspect that a lot of wine has been languishing around in warehouses, while the industry waited for the US and Europe to reach a truce."

If you ask the Bordelais, they'll attribute the region's good fortune to two things: media hype over a string of excellent vintages and the ready availability of wine at all price points. But if you speak to merchants, then the picture gets a bit more complicated.

"The American trade is sensitive to the 'vintage effect'. A vintage with a good reputation will lead to better results in volume and value. The 2018 and 2019 vintages, currently marketed in the US, have a good image which makes them attractive to consumers," says CIVB president Bernard Farges.

"I haven't seen the final data for en primeur 2020, but I already know that sales in US over the last 6 months of Lagrange have increased dramatically. I think that we will have reason to celebrate at the end of the year when I am compiling all the negociants' figures," adds Matthieu Bordes, Directeur Général at Château Lagrange.

"We offer both high quality and enough volume to satisfy demand. Moreover,  Bordeaux is simply getting better and better; warmer summer conditions are ripening Cabernet Sauvignon to fantastic levels of intensity, without sacrificing freshness and acidity. It remains a very digestible drink."

The price barrier

There has also been a suggestion from some quarters that collectors in the US have become tired of Napa's obsession with maintaining a specious mystique via mail order allocations, astronomical prices and tiny volumes. Increasing levels of phenolic ripeness and the concomitant softening of Bordeaux's austerity paradigm only bolsters the allure.

"Contemporary Bordeaux is more accessible at an early age, and yet its longevity has not been sacrificed," argues OenoTrade's director Olivier Gasselin. "The region offers endless prestige, reasonable prices and sufficient supply.  Indeed, the very high prices of Napa's blue chips are pushing US consumers away. With some notable exceptions, they have a more limited life span – few Napa wines have the potential to age beyond 10 years."

Gasselin has witnessed soaring interest from buyers in the "super seconds" like Léoville-Barton and Ducru-Beaucaillou. The crème de la crème of Bordeaux's First Growths have also apparently been seducing ever-more US collectors.

Jonathan Stevenson, SVP of North America for fine wine merchant Cult Wines, adds that Bordeaux's success over the past 12 months is synonymous with the wider market stability that brokers have observed during the pandemic.

"People were locked down at home, with little reason not to open some of the better wines in their cellar. If we rewind 40 years, Bordeaux market concentration was closer to 80-90 percent and with much of this stock laid down in private cellars in the US, these were the wines consumed this past year," argues Stevenson.

"The knock on effect is that cellars have needed replenishment and there seems to be good volumes of quality vintages available in the US market, with enough stock already in market to negate the impact of the short-term tariffs imposed by Donald Trump."

Thing is, Covid-19 has done for Bordeaux exactly what its negociants so desperately wanted: cleared out old stock to make way for younger vintages and en primeur sales. A perfect storm of pandemic boredom, attractive pricing (when compared to many rivals in Napa), and the resumption of free trade all act in the region's favor.

Meanwhile, Burgundy's A-list continue to make Cru Classé Bordeaux appear to be as affordable as Walmart air freshener.

"The [poor] accessibility of Burgundy (from good producers and good vintages at good prices) is difficult. The lack of education surrounding the region coupled with some overpriced, underwhelming stock in stores can create a negative stigma for the region," observes Stevenson.

"I feel that stylistically, US consumers will gravitate towards Bordeaux alongside Napa and overlook Burgundy, which is less accessible."

Bordeaux bashing hinges on the rhetoric that France's premier wine region has been greedy and capricious in its pricing strategy. Perhaps one day soon, it will be accused of selling itself short.

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