What will the predicted global wine surplus mean for the big Bordeaux producers? ALAN SPENCER discovers an awareness of the situation and a confidence that tradition and marketing, plus a buoyant domestic market, will see them through.
We’re running straight into a wall, a wine wall,’ says Jean-François Mau, president of Yvon Mau. This is a comment on the vast increases in production by Bordeaux producers of generic Bordeaux that cannot conceivably be met by demand.
Within five years, the global wine surplus is predicted to reach 84 million hectolitres, according to recent research by Vertumne International for Vinexpo. The research predicts that wine production worldwide will reach a staggering 282 million hectolitres in total by the year 2005. At the same time, global wine consumption is likely to rise to just 198 million hectolitres, leaving the surplus 84 million hectolitres undrunk.
Yvon Mau, Ginestet and Marquis de Chasse
Yvon Mau is the biggest family-owned négociant in Bordeaux with annual sales of 40 million bottles and a consolidated turnover in 2000 of £55.5 million. Convinced that only quality will pay, the company has concentrated marketing policy on its top brands, Yvecourt and Premius, produced from wines made by a select group of vintners belonging to its Producer’s Quality Club. An independent jury selects the best, and premiums of up to 80% over the basic price are offered as an incentive to achieve top quality.’We anticipated this situation back in 1992,’ Christian Delpeuch, general manager of négociant Ginestet says. Foreseeing that consumers would be looking for a regular supply of quality wines at stable prices, they instigated a quality charter for their brand leaders, Ginestet (for the domestic market) and Marquis de Chasse (export).
‘I am convinced,’ he continues, ‘that in meeting the challenge from the New World, brands represent the future of Bordeaux.’ Like Mau, Ginestet pays quality premiums to vintners under contract whose work is closely monitored throughout the year. ‘It appears quite evident,’ Delpeuch says, ‘that many small, independent châteaux will have to integrate a system of partnership with large-scale companies which put quality foremost.’ He considers that the brands for everyday consumption, bought by the housewife pushing her trolley, and the châteaux wines (Ginestet owns Chasse-Spleen and Gruaud-Larose) bought for special occasions, serve totally different markets.In the same way, Yann Schÿler of Schröder & Schÿler is a fervent advocate of brand wines for the mass market, borne along by the world-renowned châteaux of the region. The Schÿler family owns third-growth Château Kirwan but as a négociant Schÿler has no patience with those who do not make the effort to produce quality.
‘Brands will never be an excuse to sell off bad wines from petits châteaux!’ he warns. ‘Vintners producing mediocre wines are in for a tough time because a great many négociants’ brands are much better than a whole slew of petits châteaux of little interest and no future. There will be no market for these in five years.’
Bernard Magrez, CEO of William Pitters, intends to boost sales of his Malesan brand from eight million bottles last year to 15 million in 2005 on the back of an energetic £1 million publicity campaign. The CIVB (Conseil Interprofessionel des Vins de Bordeaux) is projecting an image of wines to drink at any time, not just with meals, but Magrez sticks to tradition. We want to place our wines in the image of French-style gastronomy,’ he says. ‘The stronger our brands throughout the world, the better it will be for Bordeaux.’ Philippe Castéja, former president of the CIVB, is president of négociant Borie-Manoux, which owns several châteaux including classed growth Batailley and a number of crus bourgeois. Its brand range Beau-Rivage covers all the Bordeaux appellations. ‘I believe brands provide an excellent solution for the négociant and a guarantee for the consumer,’ he says. ‘The hindrance to their development has always been the “yo-yo” effect of Bordeaux prices.’ The oceanic Bordeaux climate is fickle and château wines fluctuate in price according to the vintage. Brands, on the contrary, should provide regular quality and, therefore, stable prices.
Grands crus that regularly generate speculation only represent some 5% of the volume produced in Bordeaux, a message driven home constantly by the CIVB. Its president Eric Dulong is worried about the other 95% and intends to create an entirely new image of Bordeaux as a wine for pleasure and leisure, to drink on any occasion. Strong action is being taken in three areas: better quality, stable prices and a new communications campaign, which turns its attention to youth, the new feminine market, the versatile consumer. Sales of Bordeaux continue to climb steadily, although exports levelled off recently, yet Bordeaux is still losing market share as new consumers seek unsophisticated wines. Schÿler admits that novice drinkers may not appreciate the typical Bordeaux style.
‘Undoubtedly new consumers with little experience will prefer wines which are easier to approach, simpler in terms of taste. New World wines made in this style represent a danger for Bordeaux which tends to be more austere and complex for the novice.’ To counter this tendency, as a négociant, Dulong has overturned Bordeaux tradition by buying grapes directly from the growers and making his own wines. Dulong-Huet has invested FF45 million (£4.2 million) in its own ultra-modern winemaking complex and produced its first vintage in September 2000.’We are only doing the same as in California or La Rioja,’ Dulong explains. ‘We buy the grapes from throughout the Bordeaux appellation area, cultivated in accordance with a very stringent procedure, and make the wines in our own winery.’ It produces not only its own brands, Marquise des Tours, Carayon-La-Rose and Le Relais d’Alban, but also brands for its Canadian partner, Maison des Futailles, Bichon Louvet and Le Girondin. ‘Our brand strategy enables us to recentre all our commercial energy, promotional budgets and marketing,’ Dulong explains.Château wines have always been the mark of Bordeaux and although Schÿler focuses on his successful brand range, Signatures en Bordeaux, he admits that ‘on numerous occasions customers say to us: “at this price, I prefer to have a label with a château on”.’ Castel Frères, one of France’s biggest négociants, combines châteaux and brands as an integral part of marketing strategy and has just completed construction of the biggest barrel store in Europe with a capacity of 45,000 barrels, to increase sales of its brand leader Baron de Lestac (an anagram of Castel) from 10 to 15 million bottles/year. ‘A brand is in a better position to withstand market upset due to overproduction,’ director general Alain Castel observes.
Some brands, such as Michel-Lynch, Maître d’Estournel and Mouton-Cadet, are closely linked to a top growth, and this can create confusion for consumers who may mistake them for châteaux wines. Pascal Loridon, general manager of Baron Philippe de Rothschild, has no qualms. ‘It is true,’ he says, ‘that Mouton-Cadet is produced by a company bearing the Rothschild name. We can’t hide that fact and would be silly not to take advantage of it, but we keep a careful watch for any restaurant attempting to list Mouton-Cadet as a château.’ There is another way to engineer this kind of association. Magrez at William Pitters renamed a growth he recently bought and renovated, calling it Château Prieuré-Malesan, to give his brand Malesan the lustre of a genuine château.Dulong-Huet’s brands are not linked to any specific château, and although it is now making its own wines, imitating New World producers, Dulong makes it clear that these are not varietally marketed. ‘The objective is to be more efficient and market-oriented,’ he explains. ‘But we intend to bring the difference into play (the so-called French exception) because we will never make varietal wines. Bordeaux will always be a blend of grapes.’Guy Sarton du Jonchay, senior winemaker for B&G (Barton & Guestier), refuses to make this distinction. ‘I see no difference between single-grape wines, like Burgundy, and a blend of several, like Bordeaux,’ he says. ‘My wines are varietals, but they’re also a blend from different parcels. The winemaker’s art lies in bringing them together, like in Champagne. My wines have their roots deep in the terroir, but they need to be presented and we do this via the grape variety.’ Unlike other négociants, B&G has focused its most recent efforts on varietals from the Languedoc region, sold almost exclusively on the export market. B&G varietals, Sarton explains, are vins de pays d’Oc from a strip of land below Béziers on the Mediterranean coast, and they are not AC wines.
‘Legislation is far too restrictive,’ says Sarton, ‘and the AC system has become mired in tradition.’ He is convinced the appellation authorities have forgotten the true tradition of great winemakers – innovation.
To avoid a head-on clash for shelf space in supermarkets, some négociants, such as CVBG (Compagnie des Vins de Bordeaux et de la Gironde), Dourthe-Kressmann and Maison Sichel, opted to produce a top-quality, higher-priced niche wine, sold exclusively via the restaurant trade and wine shops where a consultant is on hand. Created 10 years ago, sales of N°1 de Dourthe have reached the two million mark and Patrick Jestin, general manager, expresses satisfaction. ‘This concept of a top-quality brand,’ he says, ‘with all the preparatory work it requires and its very important terroir character, has proved to be a success.’ Sichel launched its niche brand Sirius in 1984 on the model of Mouton-Cadet, targeting the high-quality market at higher quality prices. ‘At that level [FF45 (£4.20) per bottle],’ Allan Sichel says, ‘the product doesn’t sell on its own. It needs an expert guide, sommelier or wine-shop proprietor, who has to be convinced himself.’ The Bordeaux trade has generally been preparing for a global glut, but Old World producers may have an advantage in the coming clash – their domestic markets. ‘Latin countries such as Spain, Portugal, Italy and France, have an age-old tradition of wine culture,’ Jean-François Mau points out. ‘It is an integral part of their lifestyle and for that reason they are virtually closed markets. France’s wine imports are negligible.’ The battle for market share will instead be concentrated in the newly conquered territories: the UK, Scandinavia, Germany, Asia and North America, as well as Central and Eastern Europe, Mau suggests. Wine consumption in these countries, although it has increased considerably in recent years (up 36% in the UK, for instance), still remains lowish and the battle for these consumers is going to be rough. Conglomerates that make vast quantities of varietal wines from places like Chile or Australia are money makers before being winemakers. If return on investment slips due to a shortfall in sales, capital may flow out.’ Our small-scale family-based winemaking structure, with its deep roots and strong cultural identity, is fully equipped to face the new capitalist wine sector,’ Mau says in a more optimistic mood. ‘Sixty-five percent of Bordeaux wines are sold within France. Domestic consumption will cushion the effect of any fall-off in exports.’