Cult Insider

EDITION 011 | SEPTEMBER 2023

Why Bordeaux is still a key part of a fine wine investment portfolio

Written by - Connor Adams, Relationship Manager - Cult Wines

In stark comparison to what we saw in Burgundy and Champagne over the past few years, Bordeaux has not seen the same level of investment growth. Speaking to a few of my clients throughout 2023, I am often asked about whether Bordeaux is still a viable part of an Investment Portfolio. The Liv-ex Bordeaux 500 shows growth of just 8.6% over the last 5 years, compared to Burgundy 150 at 56.1%. Having said that there have been some excellent performers in Bordeaux over this period.

Below is some data detailing this from Liv-ex.

Wine	Vintage	YTD	5YR
Le Pin, Pomerol	2011	13.30%	62.10%
Vieux Chateau Certan, Pomerol	2011	-9.10%	59.40%
Chateau La Conseillante, Pomerol	2011	-5.20%	50.80%
Ducru-Beaucaillou 2eme Cru Classe, Saint-Julien	2013	-1.10%	44.10%
Petrus, Pomerol	2014	-3.60%	43.40%
Chateau L'Evangile, Pomerol	2011	9.20%	38.00%

Source: Liv-ex as of 22 September 2023.Past performance is not a guarantee of future results.

The last sustained bull run of Bordeaux occurred through 2016 & 2017. This was helped by the release of the 2016 vintage which has so far stood the test of time as one of the great releases from Bordeaux. This draws comparisons to the recent release of Bordeaux EP 2022.

Below is an excerpt from Cult Wines touching on this.

“The annual EP campaign can often shake-up the regional market as collectors and investors shift stock to make room for new purchases. The releases of the high-quality 2022 wines triggered increased regional trading activity and some pricing swings among back vintages.

For example, the 2010 vintage of Château TrotteVieille fell by 18.9%, possibly due to demand shifting to the highly scored new 2022 release. Château Petrus’s perfect-scoring 2020 (Wine Advocate) also fell by 17.5%. However, both wines come from strong vintages and continue to hold long-term ageing so should gain back the recent losses and more with time."

Here at Cult Wines, our clients have two ways of accessing Bordeaux wines and the wider market, either through our Cult Wine Investment Service or our newest innovation, the Fine Wine trading app CultX. For those clients who would like to take advantage of leading market knowledge, a dedicated buying and Investment team that can source high value, premium wines at affordable prices, CWI would certainly pique their interest. In contrast, for those who like to self-manage their portfolio and have ultimate control over their collection whilst trading on a Wine Investment platform, CultX would be of interest.

Ultimately, Bordeaux will always have a place in a managed investment portfolio, it provides liquidity and is no doubt a huge part of the Fine Wine Market. A selective approach of how to identify positions and vintages that are below market and/or fair value is the backbone of what we do here. Cult Wines continues to be at the forefront of Fine Wine Datas Analytics using a form of regression analysis to determine which wines are considered ‘undervalued’. Please reach out if you would like to know more about any of the tools and services, we have on offer here.

News in brief

Portuguese village awash with wine after distillery tanks burst

Two tanks ruptured at Destilaria Levira in the village of São Lourenço do Bairro, flooding the area with over 580,000 gallons of wine. Firefighters successfully diverted the flow, preventing further environmental damage. Destilaria Levira, noted for its wine recycling endeavours, apologised and pledged to manage clean-up and repairs. The incident offers an unusual perspective on Portugal's efforts to reduce its wine surplus, amid a 30% consumption drop in 2023.

King Charles III's state visit to France highlighted by vintage wines

King Charles III and Queen Camilla kicked off their state visit to France with a lavish banquet at Versailles. A highlight wine was the Château Mouton Rothschild 2004, notable for its label featuring King Charles's own watercolour, commemorating the 100th Anniversary of the Entente Cordiale. Champagne Salon 1948, marking the King's birth year, was also selected for a toast. The royal couple's itinerary includes meeting Rugby World Cup stars and a visit to Bordeaux. Another grand banquet is scheduled, with top Bordeaux winemakers in attendance.

Wines of Ukraine makes UK debut with inaugural tasting

Mark your calendars for the upcoming inaugural UK tasting event hosted by Wines of Ukraine on 9th Oct. 2023, at the prestigious 67 Pall Mall in London. This highly anticipated event will introduce British wine enthusiasts to the diverse and exceptional wines from Ukraine. Attendees can expect a unique experience, as they discover the distinct flavours and styles of Ukrainian wine, while also offering a valuable opportunity for Ukraine to showcase its winemaking expertise on an international platform. Don't miss this exciting debut of Wines of Ukraine in the UK wine scene.

Carrie Tuck, Chief Marketing Officer, Americas - Cult Wines - Zenato Amarone della Valpolicella, Classico 2018

What we’re drinking

Zenato Amarone della Valpolicella, Classico 2018

Carrie Tuck, Chief Marketing Officer, Americas - Cult Wines

• One of my favourite wines! Amarone wines are rich, vibrant, full-bodied and powerful.

• Amarone is a type of Valpolicella wine made by a special process in the Veneto region of Italy. Only the ripest grapes from the top of each bunch are used. It is produced from a blend of grapes including Corvina, Corvinone, Rondinella and Molinara.

• After picking, the grapes left to dry and shrivel on straw mats. With an Amarone, the winemaker ferments most of the sugar which increases the alcohol content, this particular wine is 16.5%.

• The wine has a very intense ruby red colour. On the palate, it has medium-plus to high acidity and the nose reveals a range of black cherry, fig, brown sugar, chocolate, and espresso. The wine is excellent with red meats, creamy and hard cheeses as well as chocolate desserts.

Our fine wine feature

A test of resilience: Extreme weather impacts Italian & Spanish wine harvests

Written by - Alexa Atkinson - Cult Wines & Olivier Staub, Chief Investment Officer - Cult Wines

Forecasts from official and industry sources suggest that Italy and Spain are on course to produce some of their smallest wine crops in recent years, following the impact of extreme weather on major production regions. Both regions are grappling with severe weather conditions, significantly impacting grape harvests, and resulting in the smallest vintages expected in six years for 2023.

As the wine industry anticipates the upcoming harvests, Olivier Staub, Chief Investment Officer at Cult Wines, sheds light on the challenges faced by winemakers: "Wine, like any agricultural product, is subject to weather conditions, and winemakers have been grappling with this since antiquity. The rapid rise in temperatures over the last 30 years, leading to chaotic and extreme weather, have created enormous challenges. Where extreme was the exception, it is now becoming frequent, and this has profound implications for both the volume and quality of crops."

In Italy, a projected decrease in wine production is on the horizon, with the agricultural markets institute Ismea and two industry groups reporting challenges from unusually high rainfall at the start of the growing season.

A test of resilience: Extreme weather impacts Italian & Spanish wine harvests

This led to a widespread outbreak of downy mildew, severely affecting vineyards in the central and southern regions.

Spain has faced its challenges, with main wine regions experiencing extreme drought and heat, with particularly hot August weather impacting early grape varieties, including Tempranillo. The anticipated decline in Spanish wine production is significant.

Jose Urtasun, owner of the winery Remirez De Ganuza in La Rioja Alavesa in Spain, echoes Olivier’s sentiments, sharing his experience: "We entered 2023 with a water shortage from the previous year. The latter part of August was intensely hot, stressing the berries. Miraculously, heavy rains in early September helped the vines, but it was a bit late to fully recover the full acidity in the berries. It was a complicated year, marked by a lack of acidity, and we had to be extremely selective with grapes at harvest to achieve freshness and better acidity."

This reduction across Italy and Spain, along with a slight fall in French wine volumes, could potentially alleviate the surplus that prompted the EU to allow crisis distillation of excess wine. European winemakers are facing decreased consumption due to inflation and abundant supplies following a successful 2022 harvest and stock accumulation during the COVID-19 pandemic.

Cooperativas suggest that these setbacks could result in a notable reduction in the EU wine harvest for 2023. This, along with a drop in southern hemisphere production and crisis distillation in some European countries, might facilitate a recovery in prices.

Italian winemakers are facing the brunt of climate change, with a range of extreme weather conditions affecting various regions. However, despite the challenges, there remains optimism about the production of quality wine, particularly in the northern regions of Italy which have largely avoided damage.

Spain, Europe’s third-largest wine producer, has also experienced record-breaking weather conditions. These have particularly affected Castilla-La Mancha, Spain’s largest production region, where a significant fall in wine volume is expected in 2023.

Additional insights from Coldiretti indicate potential challenges for Italy’s 2023 wine harvest due to extreme weather events linked to climate change. The impact varies across regions, with southern and central areas of Italy facing greater potential decreases in production.

In Sicily, despite concerns about the impact of heat and mildew amidst devastating wildfires, there remains optimism regarding grape quality. Producers in various regions have expressed confidence about the quality of the grapes, despite the environmental challenges.

In conclusion, Olivier Staub reflects on the resilience of nature and humans in the face of adversity: "Beyond the environmental concerns, the economic and financial impact for producers and wine regions is significant. However, as always, the adaptability of nature and humans is prodigious, as demonstrated by the recent 2022 Bordeaux vintage. Vines and winemakers are learning to deal with these new conditions every day."

Explore & travel

A symphony of flavours at Ave Mario in Covent Garden

Written by - Alexa Atkinson - Cult Wines

Tucked away in the bustling heart of London's Covent Garden, Ave Mario is a gem that promises a culinary experience as delightful as it is memorable. On a recent jaunt, I had the sheer pleasure of uncovering a standout wine from their well-curated selection – the Villa Regis Montepulciano d'Abruzzo Bio Cascina del Collie.

Hailing from the esteemed Cascina del Collie vineyard in the sun-kissed Abruzzo region of Italy, this organic Montepulciano d'Abruzzo is a true testament to the vineyard's unwavering commitment to sustainable viticulture and the cultivation of intensely flavourful grapes. The unique microclimate of the region, coupled with the vineyard's rich heritage and dedication to purity, results in wines that have connoisseurs worldwide singing their praises.

This wine, with its deep ruby hue and robust character, was a dance of flavours on the palate. Layers of dark cherry, plum, and earthy undertones were enriched by subtle hints of leather and tobacco. The soft tannic structure made it a versatile companion, harmonising beautifully with the creamy texture of Ave Mario's fresh pasta carbonara, mixed tableside in a pecorino cheese wheel.

A symphony of flavours at Ave Mario in Covent Garden

Enjoying this feast al fresco at Ave Mario, against the lively backdrop of Covent Garden's vibrant ambiance, elevated the entire evening into a gastronomic ballet. The combination of the wine's fruity notes and the pasta's creamy pecorino created a symphony of flavours that lingered delightfully, making for an unforgettable culinary adventure.

Feeling inspired by this experience and keen to explore more wine bars in the Covent Garden area? Here are some recommendations, each with its unique charm:

• Giovanni's of Covent Garden: A classic Italian trattoria, Giovanni's offers a warm atmosphere and a diverse wine list, making it a favourite amongst locals and visitors alike.

• San Carlo Cicchetti: Renowned for its chic setting and Venetian-inspired small plates, Cicchetti pairs its dishes with an extensive selection of Italian wines.

• Prima Sapori d'Italia: With its authentic Italian cuisine and a well-curated wine list, Prima Sapori d'Italia promises a true taste of Italy in the heart of London.

• Fumo: A stylish and modern Italian bar and restaurant, Fumo offers a variety of signature cocktails and wines, complemented by a menu of contemporary Italian dishes.

• Sartori - Italian Restaurant & Pizzeria: Famous for its Neapolitan pizzas and diverse wine selection, Sartori provides a cosy atmosphere for a relaxed dining experience.

Each of these venues offers a unique glimpse into the diverse world of Italian wines and cuisine, ensuring that your exploration of Covent Garden's wine bars will be as delightful as it is varied. So, why wait? Let the adventure begin! Cheers to discovering more hidden gems and tantalising your taste buds!