Do you ever wonder why there are more than 70,000 wineries in France but the media only talk about a few brands?
In France, all the news articles revolve around the Grands Crus Classés of Bordeaux, the most expensive Burgundy in the Côte d'Or, and the Big Houses of Champagne. Same logic with other countries, excepting the list is usually shorter.
Looking for a good bottle of wine and finding only those big names, is a bit like searching for a good person and coming up with George Clooney, Elon Musk and the Kardashians.
They are rich and famous for sure, but from my experience, there are ordinary people who have a much greater impact in my life than the movie stars and news celebrities. Just like there are a lot of small wine producers who are offering much better value for money than the big brands.
Shall we dedicate more attention to the wine and the people that really matter to us?
Here is my take on it:
Big brands are ubiquitous, they produce volume and consistency, sourcing grapes from an entire appellation, region or country. They have economy of scale that enable them to sell wine at a very low price and flood the market with cheap commodity wines. The quality is not there, commercial wines taste is generic and boring, what they lack in depth and character is replaced by branding. It doesn’t really matter if the wine is Australian, Chilean, Italian, Spanish or French, Big Brands are competing on price only, typically selling wines below $20/bt in supermarkets and grocery stores.
Luxury brands, on the contrary, produce high quality wines, usually selling for $100/bt and above. Sky is the limit. They also spend a lot of money in advertising and promotion to stay on top of everyone’s mind and convince us that their products are luxurious, fine and rare, exclusive.
Luxury brands are selling dream and status, navigating the realm of conspicuous consumption, also known as the Veblen effect, the demand for a good increases as the price increases. Ironically, their products are often available in supermarkets and Duty Free Shops all around the globe. The marketers coined this combination of mass markets and prestige as ''masstige''.
It is a vicious circle, because the more advertising you do, the more expensive it gets, the harder it is to sell and the more marketing you need... Consumers end up paying for everything around the bottle, ads running in TV, radio and magazines, SEO and social media campaigns, promoters in nightclubs, fancy labels and packaging, merchandising like corkscrews, coasters, tote bags, wine glasses and even wine fridges, they also give 100s of bottles FOC to secure big accounts and regularly host and sponsor VIP events, of course all the costs are incorporated in their pricing, so in the end we are definitely not paying for the wine itself.
Wine is made with grapes after all, even if you buy a prime growing land and hire additional manpower, source the best equipment, only use natural corks and heavy glass bottles, it shouldn’t cost more than $50/bt to produce the best wine in the world. The winemakers and distributors are entitled to make a profit of course, so we should be able to get the best wines for $100/bt. Why should we pay 10 times more? Conspicuous consumption or delusion?
Benoist Simmat, investigative French journalist published in his book "Bordeaux Connection" (pub. 2015) that first growth Bordeaux prices have increased by 700% between 1986 and 2012. According to Pierre Lurton, a bottle of Cheval Blanc costs 35 euros to produce, while the annual production of 60,000 bottles usually sell around 500 euros per bottle, leaving a gross margin of 28 millions. During the same time, others Bordeaux prices have increased by 25% only. They usually cost half that of first growth and sell for 30 euros, leaving very little profit to their producers. At the bottom of the ladder, you have generic Bordeaux, about 500 million bottles altogether, that cost around 1 euro to produce and sell for 6-7 euros in supermarkets, 70% of volume purchased in France. (Source : https://www.lemonde.fr/vins/article/2016/06/21/prix-du-vin-l-ivresse-des-extremes_4955212_3527806.html)
In reality, we cannot compare the quality price in wine because if they are identical (same grape, same vineyard, same vintage, same wine-making process) they would also have the same price, but anyone can taste the difference between wines at $20, $30, $40 and $50, above which the frontier becomes more blur as we reach the luxury wine market, there is no noticeable difference in quality between a wine at $80 and $800, besides the obvious variation of geographic origin or ageing that we may find between 2 different bottles of wine, like neighboring vineyards.
In Singapore wine market, based on my observations between 2010 and 2020, the quality price ratio of wine follows a semi logarithmic curve with linear quality increments for every $5 up to $50, then marginal gains in quality for every $10 up to $100, at which point the wine's quality is already maxed out and you pay exponentially more for the brand, or rarity, rather than for what is in the bottle.
Cellaring a bottle of wine in proper conditions can be expensive though, with the bill for constant hygrometry and controlled temperature in a dedicated wine storage amounting to $4 per bottle per year in Singapore. $80 after 2 decades. Ageing wine in Singapore is not really recommended, if possible, it is better to keep it in an underground cellar at the winery. As a general rule of thumb, always make sure you know exactly the provenance of your wine and beware of auctions and secondary markets, as there are a lot of fakes. As the price of wine increases, so is the incentive to counterfeit it. According to Laurent Ponsot, 80% of the Burgundy vintages prior to 1980 available in the market are fakes. Reportedly, there are more Chateau Lafite Rothschild available for sale in China than the estate produced in any given vintage.
Instead of brands, we prefer to focus on the best value for money. It means sourcing the best possible quality at the best possible price. If the price is too low (<$20), the quality is not there. If the price is too high (>$100), it is disconnected from reality. How to find the best alternative?
- Thinking outside the box, not following trends and magazines, they won’t advertise a product if you can’t find it in your local store. When you have a readership of 100,000 people, you can’t talk about a wine produced in batches of 5,000 bottles without frustrating a lot of people. And you won’t find small producers in supermarkets because the supermarket chains don’t want to run out of stock. For supermarkets, volume and consistency is key. The 3 largest wineries account for 50% of the wine production in the USA. As a result, only a fraction of the wine ever produced are reviewed by wine critics. It is only the tip of the iceberg. What about the rest?
- Going off the beaten path, not necessarily looking for star winegrowers, or the most famous appellations, or international grape varieties, but taking some risks by giving a chance to small artisans who navigate under the radar and focus all their time and effort on crafting beautiful wines, with indigenous grape varieties and indigenous yeasts, without the technological processes and oenological additives used in commercial brands that erase a sense of place, what we call “terroir” in French.
- Going organic, stopping the demand for products polluting the environment with agro-chemicals (pesticides, fungicides, fertilizers and weedkillers) and instead support companies actively protecting biodiversity, having all sort of crops and animals in and around the farm, not only to create beautiful landscapes, but also to get better results on the long term. All the life teeming in our ecosystems, including the biomass in the soil, will translate into more complexity in our glass of wine as oligo-elements and micro-nutrients are responsible for the nutritional value and aromatic compounds of our food.
People who don’t know anything about wine at least know brands. It is on their clothes, shoes, watches, electronic devices, cars, perfumes, etc. When you are lost in a store alley with 300 products facing you, the easiest choice is to pick a brand you are already familiar with or a packaging that you like, at a price that is suitable for you. How about the quality?
I am willing to argue that brands should not be relevant when you are choosing agricultural products. When you go to a fishmonger, do you ask what the salmon brand is? Obviously not. You want to know if it comes from Alaska, Norway, Ireland or NZ. You want to know if it is farmed or wild caught, if its fresh, frozen or thawed, if the eyes look black or white, if the gills are pink or brown, if the fish is stiff or soft, or smelly.
The same goes with wine, after all, wine is an agricultural product and even considered a staple food in France. Wine is essentially farming. Growing the best possible grapes and turning them into the best possible wine, with a minimum intervention. Brands should be irrelevant. What matters is where it is from, what grape variety it is, how it is grown, organic or conventional, what is the soil type, weather, and topography of the vineyard, what is the yield per hectare, the age of the vine, the harvest date, the aging vessels, its alcohol content, residual sugar, total acidity, pH, etc. We should judge a wine on its organoleptic properties and environmental impact, not based on its label or merchandising. If you really want to find good value for money, don't rely on the latest app and marketing fad, visit wine regions, meet with winemakers and trust your palate. Or talk to us. Because we are working only with small producers and don't do any marketing at all, you only pay for what's inside the bottle.
Good grapes make good wines. That is simple. Forget the brands, drink authentic wine.