Bordeaux is traditionally the foremost wine-growing region in the world, and the origins of investment in fine wine are rooted here. Due to the global demand for the most sought after wines of this region, the values that can be achieved and their market liquidity, Bordeaux is still the key focus today for investors in fine wine, accounting for more than 70 per cent of the world’s £2.5bn per annum trade in investment-grade wine.
The premier estates benefit from centuries of wine-making tradition and investment and represent some of the world’s most sought after luxury brands. Their wines command significant values and with strict production rules the finite supply per vintage which has to satisfy growing global demand supports long term price growth.
Investment-grade wines and their producers
Search for appellation and chateaux details from the list below:
- has approximately 116,000 hectares (287,000 acres) of vineyards,
- 57 appellations,
- several thousand wine producers, of which about 50 are considered to be world class,
- a variable annual production of about 960million bottles,
- the most famous wines of the region, including those of interest to investors, represent less than 1 per cent of the region’s total production.
There are approximately 3,000 chateaux in Bordeaux. The ‘chateau’ title denotes the wine-producing estate’s ownership which is normally attached to a substantial house, rather than to specific plots of land as you find in Burgundy. So, as new acreage is acquired by a chateau from a neighbouring plot, the additional land acquires the title and classification of the owning chateau.
Bordeaux’s approach means that in the leading properties everything from vineyard maintenance, wine-making, bottling and sale is in the owner’s control ensuring great quality control, consistency, style and ultimately brand value.
The vine was reputedly first introduced to Bordeaux in the 1st Century by the Romans for local consumption; the region having been under Roman rule since 60BC. One of the early exponents being the Latin poet Ausonius (AD310 – 393), Bordeaux’s first known wine grower of any note and Chateau Ausone is reputedly named after him.
Bordeaux as a city flourished because of its wine trade, which was established by the 8th Century but really expanded under the reign of Eleanor of Aquitaine. The rich trade in Bordeaux wines was further enhanced by King John, (1199 – 1216), under whose rule a number of preferential trade measures were put in place for the merchants of Bordeaux.
In the 17th Century the Dutch drained the marshlands in the Medoc, creating the basis for the fine wines which have established Bordeaux’s reputation worldwide. It is thought that Lafite, Latour and Margaux were probably planted in the late 1700s. Other key commercial developments included Christies being founded in London in 1766, who further grew the Bordeaux market to the land-owning British aristocracy.
The 1855 Bordeaux Wine Official Classification was established at the command of Emperor Napoleon III to guide the market in the trade of the finest wines of the Medoc, Graves’ Haut Brion and Sauternes being exhibited at the Universal Exhibition in Paris that year. This was undertaken by the Bordeaux Syndicat des Courtiers who ranked the wines based on decades of trading statistics. These key chateaux were ranked in importance from First to Fifth Growths. Later, the Anglo-French Treaty of 1860 also stimulated growth in trade.
Bordeaux’s appellation controllee system was established in 1936, but many chateaux changed hands post WW1. It wasn’t until the 1950s that those chateaux with an international reputation were financially able to replant and then in 1972 chateaux bottling became compulsory for classed growths.
Today the power of brands in Bordeaux is paramount, with the premier estates representing some of the world’s most sought after luxury goods, commanding significant values and the lion’s share of the volume in trade. Bordeaux’s finest wines are essential components of a profitable wine portfolio.
The Bordeaux region straddles both the Garonne and Dordogne rivers, which merge to form the Gironde north of the city of Bordeaux. The area benefits from a number of geological advantages and its proximity to the Atlantic and the warm waters of the Gulf Stream means that it has a relatively mild climate for its latitude.
The Gironde divides the region, creating unique physical conditions for each area. The key characteristics of the“Left Bank” which includes the vineyards of the Medoc, Pessac-Leognan and Graves are the gravel banks which can be as deep as a metre over the mineral-rich, sandy-clay subsoil. Additional iron and limestone deposits create conditions that favour the Cabernet Sauvignon grape and help create structured, powerful wines that age beautifully for decades.
The estates of the Left Bank have historically been the most highly invested in as a result of their superb terroir and location closer to the Atlantic and trade routes. These estates, such as Lafite, Margaux and Mouton-Rothschild tend to be larger with some of the more ornate properties.
The “Right Bank” has more mixed soils with clay predominant varied with limestone or iron deposits and gravel. The most famous communes are St Emilion and Pomerol where the Merlot grape dominates along with Cabernet Franc. The Right Bank wines are different in style and are generally softer and fruitier than those of the Left and the vineyards smaller but outstanding, for example Petrus, Le Pin and Ausone are amongst some of the most expensive wines and sought after wine brands in the world. The 1855 Classification did not include the producers of the Right Bank, however St Emilion has devised its own ranking system and Pomerol has no classification system.
Further south on the banks of the Garonne lie the vineyards of Sauternes where the soil is mainly limestone and chalk which produces the most highly-prized sweet, white wines in the world, Chateau d’Yquem being the most famous. Sauternes enjoys slightly warmer and more humid climate conditions and the region’s winemakers encourage the natural development of botrytis (‘noble rot’) in the Semillon and Sauvignon Blanc grapes generating a high residual sugar content. This creates rich, sweet, golden coloured wine with an extraordinary capacity for ageing, many to more than a century old. These wines command exceptional prices. Chateau d’Yquem, now owned by LVMH and the only 1855 classified Premier Cru Superieur, is the star of the region and holds the record for the highest price for a single bottle of wine – an 1811 vintage was sold for £75,000 in 2011.
Almost all Bordeaux red wine is made by blending two or more of the following grape varieties:
Widely acknowledged as the main grape in the Haut-Medoc, it accounts for the majority (75%) of the blend in the finest wines of the Medoc region. Cabernet Sauvignon gives only moderate yields, which can be difficult to ripen, yet produces quality, dark, tannic wines, which are often softened with Merlot and age beautifully in oak barrels.
Bordeaux’s most planted grape and particularly important in St-Emilion and Pomerol where it enjoys the limestone soils. Merlot tends to ripen early, produces a medium yield and its richness and body are used to soften Cabernet Sauvignon in the wines of the Medoc and Graves.
Traditionally mainly grown in St-Emilion and to some degree in the Medoc, Pomerol and Graves, it provides larger yields than Cabernet Sauvigon, however the grape is mainly used for blending.
Recognised as less important for this region but used on occasion in blending.
Not much grown as it doesn’t crop predictably and ripens fully only in very hot years giving a very deep-coloured tannic wine which is slow to age. Used sparingly and only to blend in great wines.
The great Bordeaux white wines are made from the following grape varieties:
Bordeaux’s great and, most widely planted, white grape and the basis of all Sauternes and Barsac. Encouraged to develop ‘noble rot’ this grape provides the world’s most famous sweet wines
In Bordeaux it is blended with Semillon in the great sweet wines and increasingly used for single variety dry whites.
Has a distinct Muscat flavor and used in small quantities to add richness to sweet wines.
Bordeaux Chateaux and their wines
The wines produced by the following Bordeaux chateaux enjoy global demand and are the most actively traded in the secondary market with strong historic price performance.
|Pichon Baron||Second Growth|
|Pichon Lalande||Second Growth|
|Grand Puy Lacoste|
|Cos d’Estournel||Second Growth|
|Leoville Poyferré||Second Growth & Parker’s Magical 20|
|Léoville-Las-Cases||Second Growth & Parkers’ Magical 20|
|Rauzan-Segla||Second Growth & Parker’s Magical 20|
|Haut Brion||First Growth|
|La Mission Haut Brion||–|
|Pape Clément||Parker’s Magical 20|
|Haut Bailly||Fifth Growth|
|Smith-Haut-Lafitte||Grand Cru Classé Pape Clement|
|Yquem||Premier Cru Superieur|
|Angélus||Premier Grand Cru Classé A|
|Ausone||Premier Grand Cru Classé A|
|Cheval Blanc||Premier Grand Cru Classé A|
|Pavie||Premier Grand Cru Classé A|
|Clos Fourtet||Grand Cru Classé|
|Le Dome||Grand Cru Classé|
|La Mondotte||Grand Cru Classé|
|Vieux Chateau Certan|
|La Fleur Petrus|
Investing in Bordeaux Wines
The proposition of investment in fine wine commenced and grew alongside the development of early international trade in the fine wine of Bordeaux. Today’s global wine investment market is underpinned by the liquidity and values in the premium wines of this most significant region.
The allure of Bordeaux to investors and consumers of the growth economies of the Far East has had a significant influence on the market in the 21st Century and the region still accounts for over 70% of global trade in fine wine. Whilst we have seen the development of other wines regions in France and the world, which now also produce some exceptional investment-grade wines, these markets are relatively new and do not have the scale or depth of Bordeaux. For the foreseeable future, Bordeaux will continue to be the dominant force of this rewarding asset class.
The Bordeaux region has regional Appellations d’Originé Controlee (AOC) which govern the wine making standards and requirements and apply specific conditions to the various sub regions of Bordeaux.