Category: Articles

Why has confidence in fine wine increased in 2020?

Despite the headwinds of 2020 – tariffs, Brexit uncertainty and the global pandemic – the wine market has remained robust. Today’s post examines what has changed and offers an explanation as to why we are seeing greater confidence in the market during these exceptional times.

Increased liquidity

One of the key changes this year is an increase in market liquidity, which is reflected in the rising value of bids and offers on the Liv-ex marketplace. The total exposure (total value of bids and offers) reached a new record high of £81 million last week – a £30 million increase this time last year.

In recent months, both bids and offers have been on the rise. The bid to offer ratio (i.e. the total value of bids divided by the total value of offers) currently stands at 0.6. Traditionally, a bid-offer ratio of 0.5 or higher suggests positive sentiment.

A broadening market

Another noticeable difference is that more wines than ever are attracting buying interest, taking market share from the traditional strongholds of Bordeaux and Burgundy. As the chart below shows, the wine market has undergone considerable broadening in the past decade. Bordeaux’s share has halved from its peak in 2010 when it accounted for 95.7% of secondary market trade by value. As its share declined, others shined. Burgundy was the first and main benefactor; its trade share rising from 0.6% in 2010, to a record high of 19.7% in 2019. It has dipped slightly this year to 17.4%.

This year, Italy has been the big winner. Having reached an annual average of 8.8% in 2019, Italy now accounts for 15.3% of fine wine trade. As recently highlighted, the US wine market is also developing at unprecedented rate. USA accounted for just 0.1% of trade in 2010. Year-to-date, it stands at 7%.

And then, there is the Rest of the World – an increasingly diverse category. Up from 0.8% in 2010 to 5.9% in 2020, RoW trade so far in 2020 has been led by trade for Australia (1.8%), Spain (1.4%) and Germany (1%), though wines from Argentina, Austria, Chile, and Portugal to name but a few are seeing more and more activity.

What has changed?

So, why are we seeing such increased confidence in the wine market? One well-documented explanation is that investors are seeking to put their money into safer assets in these uncertain times. Historically, fine wine has offered steady returns and low volatility.  Another explanation is that there are simply more market participants than ever before. The number of wine businesses trading on Liv-ex has increased 15% in 2020 alone. This increase in members reflects a growing trend since the Covid-19 pandemic took hold – businesses are looking for web-based solutions to grow their sales.

One such solution is trading automation. Trading automation makes it easier for merchants to list stock for sale, exposing their diverse inventory to an ever-growing marketplace. Regions that once struggled to find a secondary market have been benefitting from the shift to online sales, particularly as lockdowns have closed much of the physical retail. Through APIs, stockholders have been able to list and advertise various wines to a far greater audience, as merchants have connected their customers to this ever-broadening market. Subsequently, wine merchants and private collectors have been able to find less well-known wines from a greater range of wine regions.

Despite an early swoon as the first lockdown took place, the fine wine market would seem to be in a relatively healthy place today. As a tangible, finite asset, it offers stability in a volatile world. It also of course offers a great deal of pleasure for imbibers who are locked down and deprived of their usual wining and dining! And importantly technology, as in so many sectors, has helped merchants from across the globe, to adapt, making wine more accessible and more exciting to all with an interest in it. Combined, these three things have put the wine market on a firm footing in 2020.

Source: Liv-ex

 

 

Colorado’s “Beckenridge Brewery” will be delivering beer by Reindeer this holiday season to 10 lucky winners

Breweries from pole to pole are finding new ways to be creative this year –Colorado’s Beckenridge Brewery has decided to take things one step further to provide a few lucky locals the opportunity to receive their beer by reindeer.

Taking home delivery to the next level this holiday season, the Anheuser-Busch owned brewery is giving 10 Colorado residents the opportunity to receive a mini keg of Christmas Ale right to their front door pulled by Santa’s special helpers. Teaming up with the nearby Moon Deer Ranch, the two soon-to-be iconic companies decided that reindeer could have a huge impact on people’s morale, so what better time than now to put them to work?

The contest, which can be entered by visiting their website: https://www.breckbrew.com/ReinderDeliverySweepstakes

And runs until December 2 with deliveries to the winners in the Denver and Cascade areas taking place on December 5 and December 6, respectively.

In addition to your “reinbeer” delivery—which is at no charge, btw—winners will receive a Christmas Ale t-shirt, Christmas beanie, and a 12-pack of Christmas Ale. You will also receive the bragging rights that come along with having a reindeer pull up to your front door. What better way to end 2020!!

 

 

 

Rob Symington on Climate Change: “We Have To Be Activists”

At an online conference this week, members of the International Wineries for Climate Action (IWCA) spoke of the need to “be activists” in order to bring about real change in the fight against carbon emissions.

Founded last year by Familia Torres and Jackson Family Wines, the IWCA is a small but growing group of wineries dedicated to ‘de-carbonizing’ the wine industry and combatting the effects of climate change.

Crucially, the group requires its members to commit to actively lowering its carbon emissions. The requirements upon joining are:

A complete end-to-end (through Scopes 1-3) Greenhouse Gas emissions inventory (which must be completed six months after joining).

At least 20% of power generated through on-site renewable energy.

Demonstrate a reduction of at least 25% in CO2 emissions for every litre of wine produced after a baseline of emissions has been established.

A commitment to reducing total emissions by 50% by 2030 and ‘climate positive’ by 2050.

Speaking at the conference, Familia Torres’ sustainability manager, Josep-Maria Ribas, explained that all the objectives are, “science based”, to allow members to work towards producing real results in how their companies and wineries operate.

Also speaking was Rob Symington of Symington Family Estates, one of the first wineries to sign up to the IWCA. He said that the big challenge when it came to meaningful change in environmental initiatives was to “avoid greenwashing”.

Not wanting to be criticized and being seen to do something had been the “usual approach” in this area for many years and many sceptics are all too eager to pounce on projects – even good ones – that lack some sort of robustness to their processes.

This is why as well as setting its own goals, Symington said that the family-run group had been, “seeking external frameworks where we’re being held accountable to things we said we would do and that’s the most effective way to avoid falling into the trap of greenwashing”.

And while Symington Family Estates, alongside Torres, Jackson and other members, are able to take control of certain emission hotspots in the vineyards and winery more directly – producing their own energy, cutting energy use, adapting their vineyards to the changing climate, etc – there’s also a strong case for ‘activism’.

As Symington continued: “Over 85% of our emissions are beyond our control – they’re produced by the brandy makers we buy spirit from, glassmakers and transportation and so on,” but, he continued, customers at all points are able to “act as lobbyists to change those emissions from our partners”, and “put positive pressure throughout the chain”.

He added that it sometimes seemed at odd for very traditional wineries to act like activists but countered it was also important to, “stick your neck out and sign up to things like the IWCA. We joined to hold our feet to the fire and to justify the steps we need to take”.

Having goals and being held accountable is vital if not only the structural systems are going to change but the culture behind them that enables those structural systems are going to change too.

But given the challenges and threat posed to vineyards and longstanding family companies by climate change, there is also a (perfectly) legitimate form of “enlightened self-interest” in being a champion for the cause, as Symington admitted.

The IWCA is currently comprised of nine members across the Americas, Europe and Antipodes, with another two apparently close to signing up. Membership is not restricted by size and Ribas added it was currently compiling an emissions calculator that would help smaller wineries be able to join and identify where to focus their efforts to meet the entry requirements without the need to hire expensive consultants.

IWCA website – https://www.iwcawine.org/

Sources:  Drinks Business and IWCA

2020 Burgundy Harvest Historically Early and “Unforgettable” Vintage

 

The global pandemic and high temperatures provided new challenges for Burgundy’s growers in the 2020 harvest which ended up being the earliest on record.

The eastern French region, having already experienced a mild autumn and winter in 2019, with only seven days in six months registering below 0°C, then enjoyed beautiful weather from March to September, which led to bud break three weeks earlier than average and one of the fastest starts in 25 years.

Ludivine Griveau, director and winemaker at the Hospices de Beaune, noted in her report that April saw an additional 42 hours of sunshine with temperatures up over 23°C on certain days the vines were soon “bursting with vegetation” and growers were forced to both de-bud and ‘dédoublage’ (remove shoots to reduce foliage and yield) at the same time.

This up-tempo pace in the vineyards throughout the year was further complicated, it must be remembered, by the Covid-related restrictions put in place in France, with those winemakers with young children also having to deal with home-schooling at the same time.

It would be interesting to see which aspect of the year winegrowers ultimately found more challenging.

By April 21 the 2020 cycle was already 24 days ahead of where it had been in 2019, again only the sixth time in 80 years that one vintage had been so far ahead of its predecessor.

Flowering began towards the end of April and was extremely successful. As the summer went on high temperatures and steady winds kept the crop in a largely pristine state but the lack of rainfall posed its own issues.

Luckily, despite being so mild, the end of 2019 had been wetter than normal which would prove helpful as, from March onwards, rain showers were infrequent and tended to be localized. There were instances of water deficits and resulting vine stress as well as some sunburn on bunches.

Interestingly, Griveau said that: “Wind is now an important climatic component, not only of this vintage, but also of previous vintages. In recent years, it has been quite ‘new’ to Burgundy to have this wind every day and almost all day long. If it is our ally in maintaining the perfect sanitary state of 2020, it nevertheless gives us less respite and fewer weather ‘windows’ for the application of our treatments.

“The wind also has the consequence of drying out the land, at least on the surface, making it sometimes difficult to work because it hardens [the topsoil].”

Different appellations, sometimes areas within appellations, saw staggered rates of maturity, which then meant vigneron had to be on their toes to harvest what was needed at the right time as the time approached.

Griveau said that: “We saw a noticeable variation of stages within a plot, and sometimes in Chardonnay, the phenomenon of coulure was marked, the structures of the bunches were long and airy, and the millerandage was at times not negligible. The pre-flowering conditions having been more favourable to Pinot Noir, meant it had better passed the bud burst and its berries were more regular in size. The Pinot was slightly ahead of the Chardonnay at precisely this point in the vegetative cycle.”

With the vines so far advanced (and the wasps beginning to notice) the first crop began to be gathered in on 12 August in the southern region of the Mâconnais – one of the earliest harvest starts on record and one echoed elsewhere in France as well.

Griveau authorized the harvesting of white grapes for the Hospices on 18 August and the estate’s entire crop was gathered in by August 29 – the first time in its history harvesting was finished inside of August.

The Bourgogne Interprofession (BIVB) said in a statement that the overarching tendency among the white wines was “beautiful aromatic complexity”, intense fruit but also “very good acidity” in spite of the high summer temperatures.

The reds meanwhile have very deep colour and concentration but, like the whites, “they have kept their freshness” and have a distinctly black fruit profile.

Griveau concluded: “The vinification process went perfectly for both white and red wines, and the balances that have emerged in our wines are extraordinary, and, let’s admit it, quite unexpected. The sunny side of the vintage is there, but the wines reveal an impressive aromatic freshness. Acidities are very present, and the densities are already felt. The whites have substance, without too high an alcohol content. The tannins of the reds are supple but powerful.

“The ingredients of a great vintage, which, for many reasons, is unforgettable, are all present.”

Sources:
BIVB
Drinks Business

“Connaught Bar” in London is named The World’s Best Bar, as The World’s 50 Best Bars List 2020 is revealed

The World’s 50 Best Bars were announced yesterday in London via a virtual awards ceremony, with London’s “Connaught Bar” clinching the No. 1 spot.

The awards’ list is organized by William Reed Business Media, which also produces The World’s 50 Best Restaurants list.

The 2020 winners

This year’s list includes bars from 23 countries, with 11 new entries.

The U.K. had the strongest showing, with bars in London accounting for eight of its nine rankings. Europe took 21 spots in total, more than Asia’s 15 and twice that of the Americas — North and South America lodged 10 slots in total.

Connaught Bar is known for its martini trolley, which allows waiters to prepare drinks at your table. Singapore dominated Asia’s rankings, with four bars being named among the world’s best, an outsized showing for the city-state that is home to nearly 5.7 million people. Tokyo registered three bars on the list, while Hong Kong and Taipei each netted two.

Sydney accounts for Australia’s three rankings, while Dubai’s Zuma bar gave the Middle East its sole award.

The full list includes

Connaught Bar, London

Dante, New York

The Clumsies, Athens

Atlas, Singapore

Tayer + Elementary, London

Kwant, London

Florería Atlántico, Buenos Aires

Coa, Hong Kong

Jigger & Pony, Singapore

The SG Club, Tokyo

Maybe Sammy, Sydney

Attaboy, New York

Nomad Bar, New York

Manhattan, Singapore

The Old Man, Hong Kong

Katana Kitten, New York

Licorería Limantour, Mexico City

Native, Singapore

Paradiso, Barcelona

American Bar, London

Carnaval, Lima

Salmon Guru, Madrid

Zuma, Dubai

Little Red Door, Paris

1930, Milan

Two Schmucks, Barcelona

El Copitas, St. Petersburg

Cantina OK!, Sydney

Lyaness, London

Himkok, Oslo

Baba Au Rum, Athens

Panda & Sons, Edinburgh

Swift, London

Three Sheets, London

The Bamboo Bar, Bangkok

Tjoget, Stockholm

Buck and Breck, Berlin

Employees Only, New York

Bulletin Place, Sydney

Bar Benfiddich, Tokyo

Artesian, London

Sober Company, Shanghai

Indulge Experimental Bistro, Taipei

Bar Trigona, Kuala Lumpur

Drink Kong, Rome

Room by Le Kief, Taipei

Alquimico, Cartagena

High Five, Tokyo

Charles H., Seoul

Presidente, Buenos Aires

 

This year, the voting process changed to highlight emerging bar scenes around the globe, said Mark Sansom, content editor for The World’s 50 Best Bars.

The 50 Best organization appointed an outside chairperson to 20 geographical regions around the world. Each chairperson then chose a voting panel for each region, which cumulatively formed the organization’s voting “Academy.”

“The 540-strong Academy is made up of drinks experts, including bartenders, bar managers, drinks consultants, brand ambassadors, drinks writers, historians and cocktail aficionados who are selected for their knowledge of the international bar scene,” said Sansom.