01 July 2022
Bordeaux EP 2021 Summary – Highlights and Outlook from a Mixed Campaign
The 2021 Bordeaux En Primeur campaign very much represented the vintage as whole – some exciting highlights amidst variable results. Many of the top chateaux in the region rose to the challenges of the growing season to produce a strong set of wines even if some didn’t quite equal the excellence seen in the 2018-2020 trilogy. With this heterogenous nature of the 2021 wines, release prices would turn out to be key and, much like the quality of the wines, some were more attractive than others.
The campaign got off to an encouraging start with ex-negociant prices often coming slightly below prices from a year ago. Overall, average ex-negociant release prices for the wines that make up Cult Wine Investment’s EP40 index (a fixed group of 40 wines from the Bordeaux market) were 2.4% below their 2020 EP levels. Consequently, when wine and brand quality were also strong, the 2021 releases formed attractive buying opportunities with long-term investment potential. Highlights included First Growths such as Chateau Lafite on 7 June as well as its second wine, Carruades, on 12 May.
However, many prices toward the end of the campaign were coming roughly in line with last year. Buyers displayed selectivity throughout, with demand varying from wine to wine depending on quality, price and brand popularity. In our view, this selectivity stemmed from:
- Vintage reputation – Although most critics and commentators recognised quality came higher than expected in 2021, the vintage is not currently viewed as among Bordeaux’s best. Buyers likely concentrated on the highest-quality wines and those released at attractive prices.
- Macroeconomic environment – Many potential buyers remain cautious amid talk of economic recessions in major economies. Consequently, some showed hesitancy to commit large quantities of funds to long-term EP wine purchases despite wine’s track record of stability during volatile conditions in the wider markets.
- Back vintages – Back vintages of several chateaux represented the more attractive relative value options than the new 2021 releases due to better price-to-point ratios. Even in cases where the 2021s still offered good value, demand was more spread out across a producer’s full range rather than concentrated in the new wines.
This reception for the 2021 EP wines validated Cult Wine Investment’s decision at the beginning of the campaign to focus buying efforts on the entire Bordeaux market in order to access the best relative value opportunities across new and older vintages alike.
Outlook for 2021 wines: Good things can come to those who wait
The internal drivers of the fine wine market are solid and should keep prices stable and trending higher. However, in the coming months, the performance potential of the entire 2021 cohort could be limited by the mixed reputation of the vintage and the uncertain macroeconomic environment.
But EP purchases often deliver the best rewards over the longer term. A look back at the performance history of the 2017 EP wines supports this view. Initially, the 2017s struggled due to a combination of high release prices and overall vintage quality falling short of 2016 and the 2018-2020 trilogy. However, the 2017 EP index has delivered steady appreciation over the past two years, as shown below.