Bordeaux's 2021 En Primeurs campaign is on the way with barrel samples being tasted by the world’s most influential wine critics right now. So what happens next?
En Primeur campaign stages:
- The new vintage in-barrel tastings
- Critics quality scores published
- Chateaux and courtiers set allocations and release prices with negociants
- Negociants contract supply and price with global merchants
- En Primeur wines enter secondary market
The Bordeaux En Primeurs tastings are one of the key events in the wine world calendar. The great chateaux and city of Bordeaux are hosting the region’s 2021 vintage tastings now. In the coming weeks the key critics will publish their quality scores.
Most of the producers view these independent ratings as key drivers to their release prices, alongside current market values of back vintages and particularly those with similar characteristics and scores and general market demand for Bordeaux.
What do we know about Bordeaux 2021?
With the tastings now happening and ahead of critics scores we can say that the 2021 vintage is best described as small and heterogenous with varying quality across appellations and vineyards. For the producers of the great investment wines, they have the resources and expertise to generally cope with all the challenges thrown at them.
Climate influence – 2021 was a cool and wet and challenging year for growers. In the main, Bordeaux managed to avoid the devastating frosts which hit Burgundy and Champagne in April last year. It was still a cooler than average year and heavy concentrated rainfall in the key growing months of May and June combined with heat, created the perfect conditions for mildew and Botrytis.
Supply - Disease pressure saw some vineyards suffer significant yield losses and the Bordeaux 2021 vintage is an average 14% smaller than the 2020. This reduction in supply is not universal, vineyards on higher ground with well drained soils had a distinct advantage.
The appellation of Margaux bucked the trend with yield 8% higher than their 2020 vintage, but that had been a smaller year. Sweet wines were particularly badly hit with Sauternes crop losses devastated, down -71% and Barsac worse with an average -86 loss.
What should wine investors consider as they review the 2021 En Primeurs?
Performance – First Growth values have grown by an average 13.7% year-to-date to 31st March 2022. (Source: Liv-ex.com)
The market and choice – The fine wine secondary market continues to evolve and has broadened from being Bordeaux-centric in 2012, when the region accounted for over 90% of trade. The market is now vastly diversified, accessible, and robust and in 2022 Bordeaux’s trade share averages just 32%. Investors now have a lot more choice and Bordeaux remains an essential component of a robust and liquid wine portfolio.
Ability to exit – Bordeaux First Growths are the most liquid wines in the secondary market.
En Primeur Pricing – The release prices are key to the campaign’s success. Simply put, if the market perceives that the 2021 in-barrel allocations are priced too high, some buyers will wait, taking the risk that prices may be lower at a later stage. But there’s no guarantee. The table shows the average returns from Bordeaux vintage releases, which are influenced by quality, supply, demand and time since release.
Average returns on En Primeur release prices:
Vintage | Average returns | Vintage | Average returns |
2005 | 107% | 2013 | 37% |
2006 | 57% | 2014 | 41% |
2007 | 72% | 2015 | 31% |
2008 | 108% | 2016 | 7% |
2009 | 7% | 2017 | -7% |
2010 | -2% | 2018 | 3% |
2011 | 19% | 2019 | 26% |
2012 | 30% |
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Source: Liv-ex En Primeur 2021 Report, April 2022.
Inflation – Rising inflation is a key factor for the 2021 campaign as levels have risen from less than 3% to approaching 8% in 12 months and the first time it has been of consequence for thirty years. The whole supply chain is suffering increased overheads and reduced margins. The chateaux and negociants will have to bear this in mind to make the campaign attractive to global merchants.
Allocations – We know 2021 is a smaller than average vintage, but you should also be aware that many of the key chateaux are releasing a smaller supply of En Primeurs wines each year. First Growth, Chateau Latour exited the campaign in 2012 and since then, no other producer has left, but they have reduced their allocations. Many estates prefer to sell wines at a later date to profit from rising values in the market. To the investor, this may mean higher prices for the smaller supply available and a potential overhang in the market as more supply will be released later. These are all factors to be considered when looking at the release price.
We are just at the start now and we will keep you posted as this year's campaign unfolds. You can get more information on the benefits and risks of investing in En Primeur wines speak to a member of our expert team on 0203 384 2262.