the right bank—davies wakefield—feb. 2020
The wealth gap between the premium wines of the Left Bank; which consists of the appellations of Médoc, Haut Médoc, Pessac Lèognan, Graves, Sauternes and Barsac, and the Cotes de Bordeaux; whose appellations are Blaye, Bourg, Fronsac and Canon Fronsac doesn't match the quality gap of the two areas. From an investment standpoint, the wines from the Right Bank are a stunning value but largely unknown. In order to understand the irony of this situation knowing more about these wines will help. I hope it encourages you to try them.
The Gironde river is a major French waterway that, during the rise of Bordeaux in the fifteenth century, was major a trade stop where wine was traded for Asian spices like black pepper, mace, nutmeg, cloves, bay cardamom, turmeric, allspice and ginger. Other items of trade were silk and pottery as well as ivory and jade. The Dutch East India Company and later the English East India Company were major traders in the Bordeaux area taking fine wine in exchange for Asian and Caribbean goods. The investment in the wine trade on the Left Bank created some of the richest wineries and most expensive bottles of wine destined for the royalty of England and the Netherlands.
In 1855 the most ambitious grading of agricultural produce attempted to classify the wines of the left bank by using the value of the wines each appellation produced. The grading was defined (from top to bottom) as first “growth," second, third, fourth and fifth. With a few exceptions this system continues in effect today. It is used to value the land that the wineries sit on as well. In 2018 first growth wine acreage in Paulliac averaged $940,000 an acre. Many of the best vineyards are owned by French the insurance company AXA or luxury goods producers like LMVH (Louis Vuitton-Moet Hennessy). A bottle of First Growth Haut Brion from the 2009 vintage sells in the vicinity of $1,000. When it comes to tending the vineyard (the actual farming) no expense is spared. Laser optical sorters separate good grapes from bad, while state of the art production facilities ferment the grapes. When the vines are threatened by late season frosts, which happen often in northern Europe, helicopters are employed to keep the air fanned around the budding vines to prevent freezing.
The other side of the river Gironde in the Cotes de Bordeaux is quite another story. Within sight of their prosperous brothers across the way, this area has suffered. Keep in mind that the Cote is situated on the same soil; gravel mixed with varying amounts of clay and sand. It is less than a mile across the river yet the planted acreage continues to decline while in Bordeaux the number is increasing. Jane Anson Decanter magazines Bordeaux columnist tells a sad story about a lunch she had with a group of young winemakers all under 30 years old that had big ideas about transforming their properties. One after another three of them announced they were getting out of the business. The story each related was that they were unable to break through the price ceiling that the appellation and négociants put on the product. By the way the two wines in the accompanying picture both from the Right Bank were purchased at Costco before Christmas for about $8 bucks a bottle.
One of the vintners Dominique Lèandre-Chevalier, who took over his fathers estate after his passing, lamented on leaving the business that, “We work with the same grapes (as the Left Bank), we are advised by the same oenologists, our wines are tasted by the same critics. Even when I get good scores, my négociants tell me it isn't possible to raise my price because of the appellation on my label."
The horticultural practices couldn't be more different on the right bank as well. There are no helicopters circling over the vineyards during frost alerts in May. They are so close to the Left Bank that they can see the helicopters, as they drag out their smudge pots with teams of horses just as they did 200 years ago. The horses are used for any chore requiring transportation like plowing or hauling grapes and barrels. There are few if any air-conditioned cellars but rather tunnels dug out of ground by three or four generations back. Grapes are still sorted by hand again as they did generations ago.
Another young man Oswaldo Hernandez, who moved from Caracas Venezuela at 22, and started at the bottom working every job in the wine business before buying a 25-acre estate.
According to Anson, “His wines are rich, full of spicy fruit and often receive good scores, but despite this 2017 is set to be his last vintage under Clos de Moiselles." He could no longer sell his beautiful wines at a loss. The real loss is the abandonment of this perfect place to grow grapes. By 2016 there were half as many vineyards as there were 20 years ago. France needs these young vintners if it wants to continue to be the top wine producer in the world.
In the investment world the old saying is that “It always get darkest just before it goes totally black." And when that blackness occurs it is time to look for undervalued assets. I believe that's currently the case in the Cotes de Bordeaux. Two appellations that are thriving are Fronsac and Canon-Fronsac. These two areas are near the city of Libourne. Libourne was the ancient capital of France and was the second largest trade center, providing northern Europe with simple but satisfying wines from those two appellations. Canon and Fronsac have such outstanding potential that a wave of well-heeled Chinese investors has bought up 15 percent of area vineyards in the last 5 years.
In the film “It's a Wonderful Life" Jimmy Stewart said, as George Bailey, “Can't you understand what's happening here? Potter isn't selling. Potters buying. And why? Because we're panicking and he's not. That's why. He's picking up a bargain."
This area on the Right Bank of the most famous wine growing region in the world has the same weather, the same soils, the same grape varieties and a history of wine making that goes back to ancient Rome and Greece way before Christ was born. Exactly like their French brothers a few kilometers west of them on the prestigious Left Bank. The Right bank sits there like Amazon, Google and Microsoft did right after their IPO's. Cheap bargains just waiting for investment. Oh yes, these wines are everywhere waiting for young struggling millennials who can't afford the Left Bank wines, yet, to acquire great tasting Bordeaux for less than ten bucks a bottle. I saw them in every store in Green Bay before writing this essay.
The 2016 Chateau Hyot from Bourg was $8 at Costco. It is 70 percent Merlot 10 percent Cabernet Sauvignon and 20 percent Cabernet Franc. It is rated at 90 points by James Suckling.
He describes it as “A very rich and ripe red for this appellation. Full bodied round and juicy with ripe round tannins. It features dark berry, brick and stone. My wife and I had this with our homemade sheet pan pizza. It held up to the Italian sausage and at that price, it could be the Wednesday night meal wine with just about anything.
The 2016 Chateau Les Aubiers from Blaye also $8 at Costco is 90 percent Merlot, 15 percent Cabernet Sauvignon and 5 percent Malbec. It was rated 91 points by the “Wine Enthusiast."
They describe the wine as “ … structured and balanced, this rich organic wine is generous and packed with black fruits." Concentration and layers of wood are all part of Jean-François Reaud's fruity wine that will age well. We had this with lamb stew with turnips, carrots and potatoes. The Malbec held the wine up to the deep flavors of the stew. Both wines are age worthy, especially the very good 2016 vintage so buy six bottles and drink one every year in order to see how these wines mellow with age.
A graph of the current wine producing areas of the world shows a very tiny proportion of arable land with the right conditions to produce great wines. There isn't any new land being produced for wine and the billion plus people of India and China recognize this. Enjoy these wines while they are still cheap.
Finally, Andrew Kruse-Ross was a friend, and even though I was 30 years older, a mentor. He will be missed dearly, but more importantly, Andrew will be remembered by me as a major constellation in my universe.