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Anson on Thursday: En primeur heads west

Let’s pick up where we left off, just for one final discussion about en primeur before moving on for another year. Only this time, rather than talk about how Bordeaux approaches things, it might be worth looking at Napa; a place that has some pretty fascinating experiments going on with the whole wine futures market right now.

Obviously comparing the two is crazy in many ways. Where Bordeaux, on a good year, sees around 400 estates engage in selling its fledgling wine, in Napa it’s something more like 40 at the very outside. And where Bordeaux has an En Primeur turnover that runs into the many, many millions on a good year, for Napa it represents a drop in the ocean. And where Bordeaux has been pre-selling to merchants, if not consumers, for centuries, Napa is relatively new to the game (Mondavi was among the first to offer it back in the 1980s, along with V Sattui).

But there are still things to look at – if for no other reason than you can be certain the smart Bordeaux chateaux are doing so, and it might shed a little more light on what they are planning to do (although not necessarily why).

For a start, Napa already seems to be where Bordeaux is heading; namely releasing only very tiny percentages of its overall wine through the futures programme. Only in Napa they are upfront about it. The estates tell their consumer exactly how big a slice they are releasing (almost invariably 10-15%), and at what discount it is from the final in-bottle release price (as far as I have seen between 10 -20% discount). And there are plenty of instances when they don’t even offer a discount on the bottled wine, but make the whole thing about access. Oh, and many only offer futures in the best vintages.


The biggest player in the Californian Futures game is the yearly Napa Premiere auction that has been running every February since 1996. This is a weeklong event with tastings and dinners where the trade will bid on specific wine futures (around 90% come from wines yet to be bottled). The second big futures auction is the charity event Auction Napa Valley, which took place this week and raised over US$15 million. Part of the weekend involves a Barrel Auction of unfinished wine where consumers bid directly and wineries provide tastings from the barrel.  This year it set a record, raising US$1.9 million through the sale of 120 lots of wine futures.


But increasingly, private wineries also run their own programmes direct to consumers, almost always for wine club members, subscribers or best customers. V Sattui Winery, Château Montelena and Joseph Phelps Vineyards are three of the most prominent, but there are several others gaining increasing attention, from Nickel & Nickel to Lail Vineyards. They offer personalised labels, limited editions, special bottle sizes, name engravings, private tastings during the ageing process, basically anything that makes buying wine as a future a way of establishing a personal connection with their customers (or ‘patrons’ as Bill Harlan calls buyers of his new Promontory Estate, taking the ‘keep your customer happy’ schtick to its logical conclusion).
But there is another futures model that is quietly gaining traction, in the form of a company based on the East Coast of the United States called e-Cep. Started in 2012 by Frenchman Serge Marquié and his wife Sally Wilkinson, it has made a business out of brokering futures for some of the most iconic Napa Valley wines including Staglin, Scarecrow and Continuum. They offer a direct-to-consumer bond that has so far been sold to a few thousand customers.


I spoke to Marquié this week to understand how it might develop. ‘In the US, there is no need for a Futures market for wines that are readily available. If it can be seen on the shelf, then there is no need to buy in advance. Instead we are looking to provide access to exclusive wines not for a discount but as a way of getting around the famous waiting lists for the top Napa names. The bond is available earlier than the email lists sent out to the wineries’ favourite customers and works as a complement to their direct sales, or those that go through a merchant. It’s not an intermediary model. We are not buying and selling, it is a platform that allows wineries to sell direct to consumers. But instead of buying the wine they are issued with a bond, which is approved by the winery before being accepted. They then take delivery of the wine direct from the property when it is bottled’.


‘Wineries all have their own reasons for working with us – for some it’s a way to test new ideas, others offer verticals or use it to pre-sell specific bottles sizes such as magnums or jeroboams that are tough to commit to for small production estates. Growers that have more than one winery may issue terroir packs representing all of their vineyards. It’s a way to risk manage, or to test for prices, or just to offer an additional service for buyers. The only thing that is never a motivation for the wineries is cash management. It is not a way to get advance funds in the way that En Primeur is – the quantities sold are just too small for that’.

‘We are not planning to extend this to Bordeaux, but I can see it avoids a lot of the issues that En Primeur has such as lack of transparency and over-influence of intermediaries. And when I look at the Bordeaux market, there is one property that surely should be looking closely at bonds; and that is Château Latour. They say they don’t want people to drink their wine early, but it would make sense for them to sell in the form of bonds today. They say one of their big issues is provenance; so selling bonds against future bottlings is a great way to stay true to their intentions while giving assurances to their customers, and keeping their brand active’.
The biggest stumbling block for any of these things in Bordeaux is the volume produced by most chateaux here. Direct to consumer is very tough when you make thousands of cases of your top wine, and to date no one has been better at championing the quality of Bordeaux than the thousands of merchants around the world who still love these wines, despite current frustrations. But if we accept that châteaux are starting to question their existing strategy, then it’s certainly worth looking to see what lessons can be learnt from Napa.

And one thing that Napa has clearly taken to heart is that well-heeled wine drinkers are looking for greater engagement. So let’s put it another way – Bordeaux chateaux might only be thinking about disrupting their immediate supply chain, but is there a bigger opportunity for us as consumers here? If En Primeur is to continue, as surely it will in some form, shouldn’t we be following Napa wine drinkers and asking for more?

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