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Bordeaux’s ‘Earliest Ever’ Harvest

Bordeaux vineyard at sunrise

Producers in Bordeaux welcomed the rain and cooler temperatures that arrived at the start of August with open arms. After six weeks of no rain, and with a prolonged heatwave, July of 2022 was announced as the driest on record since 1959.

The first white grapes of one of the key varietals that makes up the Bordeaux Blanc blend – Sauvignon Blanc – began arriving at wineries in the communes of Entre deux Mers, Graves and Pessac-Léognan from the 16th of August. The 2003 harvest that was previously considered very early, began on the 18th of August, making 2022 now the earliest ever vintage.       

The president of the Pessac-Léognan syndicate, Jacques Lurton, commented on this ‘earliest ever harvest,’ to French press agency AFP. He said that it was caused by ‘the exceptional conditions of the year that have speeded up ripening. Right now the aromatics are high in Sauvignon Blanc, making it the perfect moment to start bringing them in’.

Yields are expected to come in slightly under the 50-year average and are predicted to be between 13-21% higher than the 2021 harvest that was severely affected by frost. While there was a summer drought this year, both flowering and fruit set took place at the perfect time which meant that yields weren’t impacted too much.

The recent rain, up to 20mm in the majority of communes, has helped refresh soils and vines, as well as increasing the size of the grapes which are reportedly still some 30% smaller than usual.  

However, Bordeaux hasn’t been the only French wine region to have begun harvesting grapes early this year. The Rhône began on the 22nd of August: eight days earlier than last year. Roussillon also started picking grapes as early as the 3rd of August. Producers in both regions have expressed that, while the production levels may be down on average, they’re hopeful that great quality wines will be made.

Read more about the small but exceptional Port vintage expected in the Douro here.

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Small but Exceptional Port Vintage Expected in the Douro

Panorama of the sunny Douro valley

As the Port producing region of the Douro has just begun grape harvesting, producers are expecting dramatically reduced yields this vintage due to the impact of extreme heat and drought conditions that have characterised 2022. 

This year’s rainfall is more than 70% lower than the 30-year average and follows on from three years of below-average rainfall. Producers in the region are becoming increasingly concerned about this series of drier years. They are most worried about their younger vines as they are more susceptible to drought and hydric stress as the roots don’t reach as far down into the ground as those of older, established vines.

Less rainfall means reduced grape yields which in turn means higher production costs for winemakers at a time where there are other inflationary pressures at play. 

Another factor that has exacerbated the lack of rain is the combination of heat and wind. CEO at Taylor Fladgate, Adrian Bridge, commented that ‘the wind normally picks up at 6pm, but at 2pm it has been whistling up the (Douro) valley – having a hairdrier effect on the vines, so the grapes are shrinking’. He added that this has contributed to the grapes having very thick skins this year and a lot more grapes will be required to make the same quantity of Port.

‘I believe that this is going to be one of the lowest yielding harvests ever in the Douro,’ commented former chairman of Symington Family Estates, Paul Symington

However, while producers will have to wait over the coming weeks to see just how much wine it will be possible to make, there’s a sense of optimism among the Douro winemakers that this year’s vintage will turn out to be a small but exceptional one. 

Christian Seely, managing director at Quinta do Noval, commented that: ‘The occasional hot dry year is not a disaster and can produce remarkable, memorable wines: ‘45 and ‘17 had that sort of profile and both of them produced some of the most remarkable vintage Ports ever produced – and in 2017, remarkable red wines too, to my surprise’.

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China Suspends all Imports from Australia & New Zealand

Australia and Chinese flags with tear in middle

China has suspended all imports from Australia and New Zealand, including wines, dairy products and beef, according to the country’s official logistics trade association: China Federation of Logistics and Purchasing (CFLP). The ban is set to significantly escalate tensions between China and its Pacific neighbours.

In a post by the Food Ingredients Supply Chain Association under the country’s official logistics trade association (CFLP), it announced that on the 15th of August an order had been given which requests incoming cargo wait at each port for further notice.

The news has not been officially announced by the Chinese Customs Administration, but the association highlighted that relevant organisations working in customs and logistics have already been informed.

It’s currently unknown whether this will be a temporary ban or long-term one. While the CFLP hasn’t given its reasons for the ban, it did cite Australia’s revoking of the ‘One Belt, One Road’ deal as having damaged mutual trust between the nations.

What’s made the situation even more confusing is that within just 24 hours after the CFLP published its article, it was deleted. Anyone now trying to open the WeChat post is presented with an error message that says ‘the article has been deleted by the author.’

Trade

New Zealand’s exports to China totalled US$22.83 billion in 2021 with the main products being lamb, butter and cheese.

Australia and China’s relations have been worsening since 2017. Recently, tensions were heightened due to the origin of Covid, 5G and Huawei that resulted in China imposing hefty tariffs in 2020 on Australian goods such as wine and barley.

Despite the tensions between the two nations, China is still Australia’s number one trade partner, with the Asian country having imported US$164 billion, over 40% more in value than a year ago according to China’s Ministry of Commerce.

If legitimate, the ban would be a huge blow to bilateral trade as the administration in Canberra has been in talks with the Chinese for over two years in a bid to repair relations.

What’s more, the timing couldn’t be worse as 2022 marks the 50th anniversary of diplomatic relations between China and Australia.

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3 Bordeaux Appellations Permitted to Irrigate Vines

Saint-Emilion church and vineyard

In a year of drought, heatwaves and fires, producers in the three Bordeaux appellations of Pessac-Léognan, Pomerol and Saint-Émilion have been given special dispensation to water their vines. 

The lack of rain this year has been so pronounced that Météo France, the French national weather service, declared that July of 2022 was the driest on record since 1959. Irrigation is usually banned in the region from the 1st of May onwards. However, producers sent a request to the regulatory body, the Institut National de l’Origine et de la Qualité (INAO), which issued a derogation in light of the ‘extreme situation’ facing Bordeaux châteaux. Winegrowers are permitted to water their vines during times of persistent drought with permission and only if the drought ‘disrupts the good physiological development of the vine and ripening of the grapes.’ The vignerons were told by the INAO that their request was granted in this case but to use it when ‘only absolutely necessary’.

In Pomerol, the derogation states that producers must submit their proposals for irrigation two days ahead of any activity, along with the size of the vineyard area and grape varieties to be watered. Grapegrowers must also only use water from wells near the vineyard sites and not from the network.

The threat drought poses to vines, especially young vines, is hydric stress. This means that vines can’t get enough water to flourish and are unable to build up sufficient levels of sugars which delays ripening and harvest. Older vines have deeper roots which can draw water from further underground but vines aged between three to eight years old need the most attention.

The permission to irrigate vines is a much needed lifeline for wine producers this year who have had to deal with April frosts, the June hail storms, fires and a heatwave. With forest fires having started up again around Bordeaux, the region’s châteaux will be praying that the next few weeks bring cooler temperatures and long overdue rain.

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Shafer Vineyards Buys Stags Leap District Vineyard

Shafer-Vineyards

Legendary Napa producer Shafer Vineyards has purchased a nine-hectare vineyard in proximity to its winery in the Stags Leap District from Screaming Eagle founder Arlie Jean Phillips as part of a $35 million deal.

Shafer Vineyards was acquired earlier this year by the Korean luxury firm, Shinsegae Property, and it has now purchased the nine-hectare Wildfoote Vineyard in the Stags Leap District of Napa Valley. 

The deal has been reported by various news outlets to form at least part of an overall acquisition of some 46 hectares for $35 million. 

In a statement, Shafer Vineyards said that the purchase ‘secures a key source for the winery, ensuring that winemaker Elias Fernandez will continue to select from the best-of-the-best fruit each vintage.’

Cabernet Sauvignon, Cabernet Franc and Merlot grapes are all grown in the Wildfoote Vineyard. Shafer Vineyards’ President Doug Shafer commented on the sale that ‘the real winner in this is the consumer, as it gives our winemaking team the ability to choose the best possible fruit in a given vintage.’

General Manager Matthew Sharp highlighted that ‘this is a once-in-a-generation opportunity to acquire a world-class vineyard property of unequaled caliber’. He added that ‘it’s a great privilege to make this site part of the Shafer Vineyard portfolio.’

Shinsegae Property, the property arm of a Korea-based luxury company, purchased Shafer Vineyards in February earlier this year.

A historic Napa winery founded in 1972, Shafer Vineyards is one of a handful of the region’s producers that helped gain worldwide recognition for its wines.

Commenting on the sale, Doug Shafer added: ‘for those who are fans of our wines and our team, you’ll see a continuation of everything you love about the winery.’ ‘There may be some new things down the road that I think you will love and embrace as well.’

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Penfolds Innovates New French-Australian Blend

Bottle of Penfolds FWT

The innovative Australian producer Penfolds is pushing winemaking boundaries even further with its soon-to-be-released wine that is a blend of Bordeaux and Australian grapes.

‘Penfolds II Cabernet Shiraz Merlot 2019’ blends Bordeaux-grown Cabernet Sauvignon and Merlot grapes with Shiraz from South Australia. The project was brought to fruition through Penfold’s partnership with Thiénot, a Champagne house that owns Dourthe in Bordeaux.

Peter Gago, Penfolds’ chief winemaker, was delighted at a press conference in London with the imminent release of the new project, but highlighted the logistical problems in shipping a container of French wine to Australia where it was blended with the Shiraz. Both components were from the 2019 vintage, although the Shiraz was six months older due to its grapes having been harvested from vineyards located in the southern hemisphere.

Penfolds’ aim was to make wines sourced from around the world in its ‘house style’. Gago added that the key to making the wines was to have ‘ripe tannins from the start’. 

The wine is being released this month under the label ‘FWT’ (French Winemaking Trial), along with another expression that’s a Bordeaux blend which also forms part of the ‘Collection’. The objective behind this activity is to expand the Penfolds range while keeping its signature character.

Gago commented on this new release, saying: ‘it is done through the Penfolds lens: we are not saying the wine is better, but done in the Penfolds way.’

This is just the beginning of the pioneering Australian brand breaking new ground. One interesting future project would be a blend of Australian Shiraz with Syrah grapes from the Northern Rhône, as the Rhône is the original heartland of Syrah, better known as Shiraz in the New World. Gago confirmed that we might not have too long to wait as a ‘project with the Rhône Valley’ is in the pipeline. 

There’s certainly a lot going on at Penfolds and we’re excited to learn what the next new innovative launch looks like.

Read more about Penfolds’ recent made in China project here.

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Heatwave Provokes Bordeaux Fires

Fire near lake in Bordeaux region

The UK recorded some of the highest temperatures on record at over 40°C on the 20th of July and fires broke out across England. For the WineCap team that was in Bordeaux at the time, it was an all too familiar scene.

France, like other countries on the continent, has endured sweltering temperatures in recent weeks. The combination of the mercury rising and the tinder-dry ground have provided the perfect conditions for forest fires which have ravaged large parts of South and South-West France since the 12th of July. Around Bordeaux, over 6,500 hectares have already been burnt in the Landiras commune and over 3,000 have been scorched in La Teste de Buch according to the Copernicus website.

While no vineyards have been directly affected yet, the fires have come too close for comfort for some producers. Loic Pasquet, owner of Liber Pater, based in the previously mentioned Landiras commune just North-West of Sauternes, revealed that a fire had come almost within 500m of his vines. Fortunately, it has now been fought back to 7km away.

Some 2,000 firemen and a combination of sea planes and water bombers have been battling the blazes in the region. This, combined with temperatures dropping from 41°C to ten degrees cooler, has provided a much needed respite and the forces are currently optimistic that they will be able to contain the fires unless circumstances change.        

Although Bordeaux has experienced large scale fires before – in 1949 and 1989 – none have been as severe as these. For wine lovers, the risk of fires and smoke taint affecting wineries and grapes is something that they’ll probably have read about most with California wines. In 2020, Napa’s ‘Glass Fire’ caused wineries Cain, Newton and Behrens Family on Spring Mountain to suffer complete losses.

It’s too early to tell in Bordeaux if smoke taint has affected grapes and therefore the 2022 vintage. Producers who think their vineyards may have come into contact with the smoke are being urged to take samples and perform tests. The mood in Bordeaux remains optimistic, but with the August and September months still to go before harvest, we’re sure many producers are keeping everything crossed.

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WineCap in Forbes Advisor

Wine bottle necks

WineCap CEO Alexander Westgarth spoke to Forbes Advisor’s Andrew Michael about wine investment’s benefits and long-term performance. Below is a summary of the ‘How to Invest in Wine’ article which you can read in full here.

2021 was a good year for wine investment, as reported by Knight Frank’s Wealth Report released earlier this year. In fact, fine wine shared the top spot in the ‘alternative investments’ category with collectible watches. Both delivered a 16% return over the course of a year.

More and more money is being invested in the wine market. Alexander Westgarth highlighted fine wine’s solid and consistent returns over the past 15 years, with compound annual growth of 8% and some regions, such as Burgundy, delivering 12.5%.

In the current economic climate, traditional asset classes, including stocks and shares, aren’t performing as well as they historically have. The US stock market has entered a ‘bear market’ and is down 20% since January this year.

More and more investors are considering tangible assets as they are less likely to be affected by market fluctuations.

Mr Westgarth commented that ‘wine is a low-stress investment that doesn’t require constant attention, or frequent trading in and out of.’

Other advantages of investing in wine and advice include:

– There is no capital gains tax to pay on profits. HMRC classifies wine as a ‘wasting asset’ as it determines the wines to have a lifespan of fewer than 50 years.

– Think about working with a reliable investment specialist that can build a portfolio for you, manage storage and insurance, keep you updated with valuations and advice and eventually manage the sale of your investment.

– Consider an initial investment of between £5,000 and £25,000. Even at the lower end, you can start building a portfolio with exposure to different wine regions.

Want to find out more about how to get started investing in wine? Download our free guide here.

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Champagne Sells for Record $2.5 Million at Auction

Bottle of Champagne Avenue Foch on table with glasses

A magnum of Château Avenue Foch 2017 has sold for a record-breaking US$2.5 million at auction, making it the world’s most expensive Champagne and perhaps the world’s most expensive wine. Interestingly, the magnum wasn’t the sole item in the auction lot. The Champagne also came accompanied by an NFT – a non-fungible token – a digital image that trades on the blockchain. The NFT is of a ‘Bored Ape Mutant’ whose face features on the bottle and that was designed in collaboration with the artist Mig. It also includes the digital image’s intellectual property rights.

The British entrepreneur Shammi Shinh was responsible for commissioning and selling the bottle and whose aim was to boost NFTs’ profile through associating it with the luxury fizz. ‘I’m hoping for more awareness — I want people to understand NFTs now’, he commented. Shinh also hinted that this may be the first in a series of limited edition bottlings. 

The successful buyers at auction were brothers Giovanni and Piero Buono. They are Italian investors in cryptocurrencies, as well as in fashion and technology markets. However, while they are involved with cryptocurrencies, the purchase was reportedly made in dollars – as first reported by the Wall Street Journal. Giovanni confirmed to the paper that they have no plans to open the bottle.

Château Avenue Foch is a new Champagne brand that’s made from Premier Cru grapes grown at the family-owned estate of Allouchery in Chamery.

Want to discover the ten most expensive wines in the world? From Burgundy to Bordeaux, we’ve put together a list of the world’s most expensive bottles, and their intriguing stories, in our article here.

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Fine Wine Investing during Market Volatility & Uncertainty

Stocks index

With an increasing number of investors looking to alternative investments, and in particular fine wine, WineCap’s CEO Alex Westgarth explores why this sector has risen to prominence in recent years in Wealth Advisor. Read his opinion piece in full below:

‘Although wine is mainly known for its leisure benefits, many would be surprised to discover that fine wine investments can provide both stability and returns to investment portfolios during times of market volatility and uncertainty.

Fine wine investing can be a safe haven for investors in times of instability. As global markets experience increased levels of volatility due to factors such as the conflict in Ukraine, the threat of rising interest rates and spiking inflation, investors are exploring different ways to shield their wealth and assets.

We cannot predict what ways the current factors will affect the economy and financial markets and many experts expect volatility will stick around even when these short-term drivers have faded away. Therefore, investing in more stable options, such as fine wine, has grown in popularity in recent months.

Fine wine’s ability to hold its value through times of instability can be seen from historic data. At the start of the 2008 recession, the Liv-ex Fine Wine 1000, which tracks 1,000 wines from across the world, dropped 10 per cent from its peak in August 2008 to a low in December of that year. But by early 2009, it began a steady recovery and recouped all its losses by the end of 2009.

In contrast, the FTSE 100 fell 47.82 per cent and took over five years to return to pre-2008 levels. More recently, the first quarter of 2020 saw stock markets spiral down in the wake of COVID-19. While the S&P Global Luxury Index fell 23 per cent, the Liv-ex Fine Wine 1000 slipped just 4 per cent and had already begun its recovery by May 2020.

How is fine wine able to maintain such stability? As with the very nature of wine itself, the longer you hold on to it, the more valuable it becomes; and in investment terms, the more consistent your returns become. This is because, over the long-term, the demand-supply imbalance is exacerbated by increasing consumption and subsequently decreasing availability, and therefore wines become more desirable due to rarity and improvements in quality as they age.

Furthermore, the fine wine market is self-contained and, to a large extent, divorced from equity markets. This is because the value of the wine market is not determined by a single economy, rather, it shadows the movement of wealth around the world.

This unique characteristic means it is less vulnerable to the fluctuations witnessed in conventional equity markets which ultimately allows people to safeguard their investments and distance themselves from the exposure that traditional investors are often forced to endure. Moreover, the wine investment market provides flexibility as it is less open to fashionable interpretation compared to most other luxury collectables.

Particularly, when market volatility increases or economic conditions go south, investors acknowledge that fine wine can offer great capital preservation, real value growth and a way to diversify a portfolio away from the most volatile assets. Good wine will always be in demand, which means long-term returns will continue to be supported by consistent consumption.’