Bordeaux wine investment 2022: Blue-chips a safe investment
Bordeaux likely to remain buoyant as multiple dynamics drive collector and investment demand around the world.
Strong buyer demand has been pushing up prices for top Bordeaux wines, especially in younger vintages, and several fine wine merchants believe market dynamics will remain favourable in 2022.
Blue-chip claret saw prices rise by some 15% across 2021, said fine wine merchant Bordeaux Index. At Liv-ex, the Bordeaux 500 index increased in value by 10.5% last year, and by 21% over five years – though it is worth noting that this is slower than several other regional indices.
UK-based merchant Goedhuis & Co recently noted strong momentum for first growths and their Right Bank counterparts, in particular.
‘The story of Bordeaux last year was that it performed well as a region’, said Matthew O’Connell, head of investment at Bordeaux Index and CEO of its LiveTrade platform. ‘It would have been more of a standout positive story if Champagne hadn’t shot up – and Burgundy.’
Château Figeac, tipped for possible promotion in the 2022 St-Emilion Classification, saw a 21% price increase last year, based on LiveTrade transaction data across all vintages.
Other châteaux showing price rises between 10% and 14% in 2021 included Canon, Cheval Blanc, Haut-Brion, La Mission Haut-Brion, Lafite Rothschild, Léoville Las Cases, Lynch-Bages, Margaux and Mouton Rothschild.
O’Connell also highlighted momentum for Angélus and Palmer. Beyond individual estates, he said a key trend was younger vintages – such as from the past decade – rising in price more quickly than more mature Bordeaux wines.
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‘The global buyer pool for wine is changing quite a lot over time, and a lot of these buyers are just very focused on the younger vintages,’ he said. Bordeaux Index has also pointed to investor thirst for hard assets as helping to drive demand for young Bordeaux.
In the US, Shaun Bishop, CEO of California based merchant JJ Buckley, said that he saw growing demand for top Bordeaux wines to drink, rather than cellar. ‘We are seeing more clients, regardless of their age, buying wines to drink now,’ he said. This translates to demand for ‘wines with at least seven to 10 years of age’, he said. ‘Consumers are drinking more high-end wines at home, rather than paying much higher prices at restaurants,’ he added.
He said JJ Buckley’s top Bordeaux sellers were the Médoc first growths – Lafite, Mouton, Latour and Margaux – plus Pontet-Canet, Lynch Bages, Ducru Beaucaillou, Léoville Barton, Pavie, Pichon Baron, Pichon Comtesse and Léoville Las Cases.
Where does the market go from here? Goedhuis & Co said in its 2022 outlook: ‘Unlike the price growth of some segments, Bordeaux’s rises over the past 12 months are entirely sustainable.’
However, it added: ‘The main headwind we see is the currently unrated, but likely smaller 2021 en primeur campaign.’ It’s too early to judge the wines, but Goedhuis cautioned that ‘a poorly received and/or overpriced campaign can knock the wind out of a market’s sails’.
Miles Davis, head of professional portfolio management at Wine Owners, wrote that he expected Bordeaux to ‘remain firm’, describing it as the market’s ‘steady Eddie’.
O’Connell commented: ‘We think there’s a very positive ongoing story around Bordeaux.’ He also cited the bigger picture in explaining demand for blue-chip names. ‘The amount of increased wealth in the ultra-high-net-worth (UHNW) bracket in the last half a decade is difficult to overstate,’ he said. ‘And if you’re buying wine and you’re in that wealth segment, then you’re going to be buying first-growth Bordeaux,’ he said – even if people are buying Burgundy and Champagne as well.
Bordeaux wine investment: Latest sales activity
Château Lafite Rothschild has seen some of the biggest price rises among Bordeaux wines recently (see below).
It also suggests price increases haven’t been constrained to top-rated vintages. Lafite 2013, for instance, was up about 30% in price on Bordeaux Index’s LiveTrade platform in 2021.
Elsewhere, the auction scene continued to demonstrate interest in mature Bordeaux, particularly from top vintages. Six magnums of Mouton Rothschild 1953 more than doubled the pre-sale high estimate at a recent Christie’s online auction, fetching $87,500 (£64,500). Four magnums of Margaux 1953 sold for $75,000 at the same auction (pre-sale high estimate: $30,000). Eight bottles of Lafite Rothschild 1982 also fetched $37,500 (pre-sale high estimate: $32,000). Of younger wines, three bottles of Petrus 2016 fetched $22,500 (pre-sale high estimate: $10,000).
In the US, additional import tariffs on some European still wines, including those from France, were paused last year. ‘The tariff suspension has had a significant impact, driving demand and prices higher for top Bordeaux,’ said Shaun Bishop, CEO of California-based merchant JJ Buckley. ‘But we’re seeing a general uptick in demand/pricing for all high-end wines.’
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Château Mouton Rothschild, Pauillac 1er Cru Classé, Bordeaux 2016
Mouton Rothschild 2016 recently lived up to its billing as one of the stars of a benchmark year for Bordeaux. It received Andy Howard MW’s top score of 99 points at a tasting of Left and Right Bank 2016-vintage wines, including other first growths. ‘Massive and profound, it also retains wonderful freshness,’ said Howard of the Mouton 2016. ‘This Mouton stays light on its feet while carrying the structure to age for 50 years,’ he said. ‘This will probably be a 100-point wine with a few years’ extra ageing.’ Bordeaux Index was selling the wine at £3,275 for 6x75cl in bond.
The Bordeaux Index view
Fine wine & spirits specialist Bordeaux Index kindly sponsors this section of Decanter, and provides its view on the market here. It can be found at bordeauxindex.com
Bordeaux saw a surge in trade in 2021, with volumes on Bordeaux Index’s LiveTrade online platform up by about 40% year-on-year. Prices rose by an average of 12%, with Château Lafite leading the first growths and Figeac being the best-performing Right Bank wine, given the speculation around the 2022 reclassification. There were few wines that really lagged the market, with Super Seconds averaging around the 8%-9% level and seeing strong demand.
The real story of the year was the outperformance of younger vintages – seen in Lafite most markedly – on the back of strong US and Asian demand; this trend leaves some highly rated older vintages looking attractively priced, especially 1995 and 1996. While it is intuitive that this trend will reverse itself, this will not necessarily happen given that the demand for the young vintages is coming from new market entrants who are less focused on older vintages.
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Chris Mercer is a Bristol-based freelance editor and journalist who spent nearly four years as digital editor of Decanter.com, having previously been Decanter’s news editor across online and print.
He has written about, and reported on, the wine and food sectors for more than 10 years for both consumer and trade media.
Chris first became interested in the wine world while living in Languedoc-Roussillon after completing a journalism Masters in the UK. These days, his love of wine commonly tests his budgeting skills.
Beyond wine, Chris also has an MSc in food policy and has a particular interest in sustainability issues. He has also been a food judge at the UK’s Great Taste Awards.