2020 bordeaux en primeur futures

The Bordeaux wine community is notoriously conservative and glacially slow to change. This mindset has been beneficial in producing long-lived iconic wines. But given the monumental transformation the world underwent in 2020, and which continues in 2021, will Bordeaux finally be forced to adapt?

Taking a look at the en primeur selling process might provide a clue.

what is bordeaux futures

What is Bordeaux en Primeur Futures?

Historically, most Bordeaux wine producers, including all major châteaux, sold their wine “en primeur” or as “futures” in English. En primeur, which means “first” in French, is when châteaux present their wines and set prices. It takes place a few months after harvest while the wine remains in barrels.

Négociants purchase wine directly from producers, paying upfront. They then age it, bottle it, and sell it. End consumers take delivery about two years later.
The large Bordeaux wine producers rarely have direct interaction with the people who drink their wine. The rest of the wine world operates just the opposite.

The original idea behind futures was to raise cash for the next vintage. After a few poor vintages, demand fell, forcing producers and buyers into long-term contracts to stabilize pricing.

In 1924, Château Mouton Rothschild began bottling their wines to guarantee quality throughout the supply chain. Ultimately, updated wine laws required châteaux to bottle all estate produced wine. Négociants retained sales and distribution.

In 2012, Château Latour took their wines out of the futures market, but continued to work with négociants. Producers like this arrangement, because they can sell what they want, when they want. They have more control over the wine and the prices.

Also in 2012, a Chinese conglomerate purchased a large négociant house, allowing them to circumvent the futures system. Négociants continue to face new threats like in-house traders and direct-to-consumer sales.

 Times Are A Changin’ for Bordeaux En Primeur Futures

Times Are A Changin’ for Bordeaux En Primeur Futures

The global pandemic forced massive change on the futures system. Last year, Bordeaux “went digital,” with châteaux sending samples worldwide instead of inviting top professionals and press to the annual en primeur tasting.

After years of price increases, release prices fell significantly for the excellent Bordeaux en primeur futures 2019 vintage. The marketing line was “value,” something usually not associated with high-end Bordeaux.

Sales to airlines, airports, high-end restaurants, and other on-trade venues plummeted in 2020. Recovery of the on-trade business is not on the horizon. Additionally, some large purchasers of futures reduced their commitments in 2020.

But the 2020 campaign succeeded, mostly due to the reduced prices. The industry described such pricing as “market” and unrelated to conditions surrounding the pandemic. But, it may have been a convenient excuse to reset prices in the face of uncertain demand.

Forced to pivot, Bordeaux quickly devised an online tasting process, sending wine to the homes of professionals and journalists.

Those receiving wine enjoyed having more time and attention to savor the wines in an ideal environment, at home with food, family, and friends. This is, of course, how most people drink wine. They enjoyed tracking Liv-ex pricing in real-time, too.

The major downside was that many believed the delivered samples didn’t hold up well compared with barrel tastings.

2021 Bordeaux en Primeur Futures

Looking Ahead at 2021 Bordeaux en Primeur Futures

Looking to 2021 after pivoting to a digital campaign last year, the marketing line is that members learned “from its successes and failures.”

The 2020 harvest experienced extreme conditions that varied considerably around Bordeaux. Though the challenging season ended warm and dry, the impact of climate change was undeniable. The marketing line is “winemaker’s vintage.” One winemaker noted, “Nature is teaching us flexibility.”

The 2021 en primeur campaign will be even more critical in understanding the wines’ quality and value. But, can Bordeaux maintain the “magic” of en primeur given global conditions?

En primeur is currently scheduled for April 20 – 26, 2021. But these dates do not appear on the Union des Grands Crus de Bordeaux (UGCB) website.

With France back under lockdown, an in-person campaign seems unlikely. The UGCB must be working on other plans which have not been made public.

As technology evolves from the vineyard to your door, we could see a modified live experience, a delayed live experience, online/digital tasting events, or some combination.

The new UGCB website, www.vintagebyugcb.com and YouTube channel may provide some clues. Video presentations from the 2019 campaign appear on the site, plus news, interviews, and relevant articles. Classes, conferences, and tastings are also listed.

Last year, producers explained the vintage with online video presentations. Participants used QR codes to access tech sheets. Even with a return to live events, these may continue.

To meet customers where they are, some producers have made plans for online events. After sending samples last year, the process is easier. An online en primeur event is less costly but perhaps less effective due to the lack of personal contact.

A delayed event might offer limited, intimate en primeur tasting sessions in major cities around the world. Delaying en primeur would also allow the industry to maintain tradition but deliver more developed wines.

One enterprising packaging company is betting on the digital format by building a new factory in Bordeaux for the sample packages.

 2021 Bordeaux en Primeur

2021 Bordeaux en Primeur: Out of the Past and Into the Future

For 2021, the unknowns are many. Economies around the world are suffering. Restaurants are slowly dying. Importers and exporters struggle. High tariffs in the U.S. remain.

  • Will buyers materialize?
  • Given the global uncertainty, will consumers want to buy wine they can’t take home for several years?
  • Will release prices be low enough to entice buyers?
  • How much wine are négociants holding from 2018 and 2019?
  • Will payment terms be extended further to attract customers?

The Bordeaux wine trade must wake up to these new realities and find creative solutions. There may never be a better time for them to re-position for future growth.

Consumer interest in buying wine futures rose in the 1980s, championed by Robert Parker. Consumers had to rely on experts like Parker for recommendations because they could not taste the wines themselves.

Futures appealed to buyers in good vintages because of lower initial prices for access to exclusive and limited wines.

But the traditional system doesn’t make as much sense today. It no longer serves its original purchase, though it benefits the large, famous châteaux.

Lower prices for the 2019 vintage brought some new buyers into the market. Will buyers buy the 2020 vintage if prices rise? Will weak economic growth, political and social turmoil, tariffs, and an unfavorable exchange rate dampen demand?

Even the Chinese, who had been buying a lot of Bordeaux, are looking to other regions. If demand isn’t strong, it could send a negative signal.

Bordeaux can take the initiative and re-create itself by modernizing en primeur including outreach to consumers.

Learn more about futures from our fine wine experts or place an order at bighammerwines.com.

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