How does Bordeaux actually work?

No region stands for wine more than Bordeaux. All over the world the name is almost synonymous with good wine. The success story is centuries old. But complicated. In spite of all its fame, it requires a lot of instinct to deal with the branched sales system. You cannot actually get more superlative than Bordeaux.

The best known wine region in the world, and also the largest continuous AOC region. If Bordeaux was a growing country, it would be in 11th place on the world ranking list, with its 113,000 hectares of crop land, even ahead of Germany. Last year, 684 million bottles of wine came out of Bordeaux. Every second, 22 of them are being sold somewhere in the world. Many of the most expensive wines also come from Bordeaux.

In total, the region turns over €3.74 billion every year. Four out of five farms and 55,000 jobs depend on wine growing. There have long been buyers all over the world, from Dubai to Hawaii. Why does Bordeaux in particular have this significance? There are many answers to this. One is longevity. Even simple red wines develop over several years, and better ones over many decades.
Photo: Old Grape-Vine
Photo: Bordeaux Tasting © CIVB
Photo: Pessac Leognan - Chateau Olivier © CIVB/Francois Ducasse
Photo: Chateau in Bordeaux
Photo: Chateau Les Tour Seguy
Photo: Chateau Region Entre-Deux-Mers © CIVB/Haut Relief
Photo: St. Emilion © CIVB/Philippe Roy
Photo: Wine-Cellar Neipperg
Photo: Primeurs © CIVB
Photo: Sculpture Chateau Montlabert
Photo: Wine-Trade in Bordeaux

Regions and grape varieties

The Atlantic with the Gulf Stream on its doorstep is the most important climatic influence for winegrowing. In addition, there are several rivers, a potent limestone soil, warm, dry summers and sunny autumn weather. 88% of red wines benefit from this. The majority of the most durable come from the left bank of the Gironde estuary. Gravel soil with very good drainage is the basis of the best locations. Here, the vines take root particularly deeply. They provide tannin-rich, aging capable wines.

Their counterparts on the other bank are more soft and fruity. Above all Saint-Émilion and Pomerol stand for this style. Further to the South East, the majority of the dry white wines grow. Above all the varieties Sémillon and Sauvignon Blanc are in the hilly landscape of Entre deux mers between Garonne and Dordogne. To the South of the city of Bordeaux in Graves, on the left hand side of the river, many sweet wines grow, of which Sauternes is the best known. The best appellations are close to the river and develop botrytis under the influence of air humidity.

Of course there is also Rosé, to satisfy the constantly growing demand, and since 1991 also an appellation for sparkling wine, the Crémant de Bordeaux. In 2013, 2.6 million bottles were filled. Almost all Bordeaux wines are Cuvées. Cabernet Sauvignon with its powerful structure dominates the wines in Médoc. Rive droite is ruled by Merlot, which takes up 65% of the crop land. Cabernet Franc with its aspect of sharpness is used less frequently and the other permitted varieties Petit Verdot, Malbec and Carmenère hardly at all. For the most part, the white wines consist of Sémillon and Sauvignon Blanc. The former mostly dominates in sweet wines and Sauvignon Blanc rather in dry ones, which often also contain Muscadelle. Other varieties such as Ugni Blanc and Colombard also play subordinate roles here.
Photo: Arcachon Beach

History of 60 appellations

The terroir of Bordeaux can be further differentiated. However, the success of the region is better explained by the economic history of the city. The Romans used it as a transshipment point for their military rations. Wine from inland was shipped from here to the Northern border of the empire in Scotland and Ireland. Only in the 1st century, when in the city of Burdigala an amphitheatre with 17,000 places provided entertainment for the population, were the first vineyards planted there. The vines came from Navarra, and there is substantial evidence that they are genetic ancestors of the Cabernet Sauvignon.

From 1154 Bordeaux belonged to England, where the interest in wine was awakened and still continues today. In 1363, the trader’s association Vintners’ Company was founded. At the time, 70 to 80 million litres of wine departed on the sea voyage to the north every year, in 900 ships. When the Médoc, at the time marshland, was drained and planted with vines, the first Bordelaise top wine was born. Châteaux such as Brane, Ségur or Haut-Brion emerged. 300 years later, it was once again planted out so excessively that it was referred to as a “furore of planting“. Especially the world power Holland was thirsty. It needed on-board catering for its sailors. Trading companies where founded, many of which are still in business.

For the World Fair in 1855, Napoléon Bonaparte had vineyards classified. As there was little expertise, the task fell to the negotiants. The brokers traditionally bought the wine from wine growers, made Cuvées and sold them to the retailers. The negotiants understandably assessed the vineyards according to the prices of their wines. Not according to the terroirs. The reputation of the Château is crucial. So the famous classification of 1855 of the wines of Médoc and Sauternes occurred, which has worldwide recognition even today. The rise of the Château Mouton-Rothschild from 2nd to 1st plant in 1973 remains the only change since 1855. The ambitious young Minister of Agriculture Jacques Chirac was politically responsible for this. In 2013, the Conseil des Grands Crus Classés even applied to be a UNESCO world heritage site with the classification.

Apart from the Crus, a detailed system of Appellations d'Origine Contrôlée (AOC) differentiates between them. Overall, around 60 origins divide the region hierarchically into appellations such as Bordeaux and Bordeaux Supérieur, which can be produced in the whole growing region, and make up more than half of the production. Other appellations are limited differently according to region. Côtes de Bordeaux, on the steep slopes to the East of the Garonne is relatively large, Médoc or Graves are famous. The communal appellations are the smallest and finest. Here, world famous names such as Margaux, Pauillac and Saint Émilion appear. Municipalities such as Sainte-Croix-du-Mont and Graves de Vayres however, are rather something for people who want to dazzle with their expertise. In addition, all Châteaux are allowed to sell their wines under the best municipality names, even though not all of their vineyards are there. The names can also be confusing. For example the Blaye region with the “Premières Côtes de Blaye”, renamed itself “Blaye – Côtes de Bordeaux” some time ago. In contrast however, there are also “Blaye”, “Côtes de Blaye” and “Côtes de Bordeaux”.
Photo: Vineyard

On the way to world fame

Up until the 1960s, Bordeaux produced more AOC white than red wine, when the practice of bottling the wine in the château prevailed. At the same time, this broke down the supremacy of the wine merchants. The university gained great oenological importance. World renowned oenologists such as Émile Peynaud, Michel Rolland, Denis Dubourdieu and Jacques Boissenot came and still come here.

The American critic Robert Parker boosted the demand worldwide with his simple valuation system. Limited companies purchased Châteaux. Bordeaux wines became stock exchange objects. Wine funds were set up, even though the wine pope Parker personally recommends keeping away from them. Today, a hectare of vineyard in a good location costs a seven figure sum. This does not stop Chinese investors buying up prestigious properties. However, the first ones are already selling theirs again.
The prices often correlate with global economic developments such as the dollar rate. New markets such as Russia and China fuel the share prices for the limited goods. Under the effect of the China crisis and the wars in North Africa, the exports in 2014 fell by 9% in quantity and 17% in value.

The brokers still handle 70% of the production, by balancing out the supply and demand between wine growers and traders, officially they are even “moral guarantees for proper implementation“. A very sensitive factor in the business. But even chain stores mostly stick with négociants. Above all the Grands Crus are primarily sold by subscription. Thereby, the broker takes the wine still in the barrel, in the spring after the harvest. This means that the winegrower receives their money very quickly. However, the quality of the vintage is difficult to guess at the time of sale. Due to climate change and the technical process, really bad vintages are becoming increasingly rare. The best Bordeaux' oft he 20th Century almost all come from very hot years. Since the millennium, there have been an above average number of good to very good vintages.
Photo: Wine-Trade in Bordeaux

The silent majority

However, the celebrated Grands Crus do not even make up 5% of the production, and simple cask wine has become harder to sell since the millennium. The competition from overseas initially led to subsidised distillation, and then reduction of the growing area. This affects the majority of the 6800 Bordelaise AOC winegrowers, who are always Château owners, although there are only a few real castles amongst the farms. Even for them, marketing is well organised. 300 Maisons de Négoce and 89 commercial brokers market 70% of the production, in China and Germany amongst others, the largest buyers in more than 150 export countries. This includes 36 associations and 4 cooperatives, which supply 40% of winegrowers.

One obstacle to sales is its own image. Wasteful dinners in evening dress, which three star chefs cook up, are part of Bordeaux' self image. At Dubai International Airport, there was recently a single bottle of Château Margaux for sale for €143,000. However, the celebrated Grands Crus do not even make up 5% of the production, and simple cask wine has become harder to sell since the millennium. The competition from overseas initially led to subsidised distillation, and then reduction of the growing area. This affects the majority of the 6800 Bordelaise AOC winegrowers, who are always Château owners, although there are only a few real castles amongst the farms.

Even for them, marketing is well organised. 300 Maisons de Négoce and 89 commercial brokers market 70% of the production, in China and Germany amongst others, the largest buyers in more than 150 export countries. This includes 36 associations and 4 cooperatives, which supply 40% of winegrowers. One obstacle to sales is its own image. Wasteful dinners in evening dress, which three star chefs cook up, are part of Bordeaux' self image. At Dubai International Airport, there was recently a single bottle of Château Margaux for sale for €143,000. As wine has become a popular drink, this scares away many new drinkers. In light of such fantastical prices, they believe that Bordeaux is always very expensive. Especially younger people tend to take a critical view of products with a collar and tie image. Many believe that wine can only be understood by experts.

Therefore, the sector association is trying to break through these clichés with image campaigns. For an estimated €8 million, in the scope of this, Bordeaux is combined with street food, sustainability, urban cuisine or simply party. Mega events such as “Fête Le Vin“ in Bordeaux, where hundreds of winegrowers offer their wines, should emphasise the uncomplicated festival character. There are now also similar events in Los Angeles and Shanghai. Young winegrowers with new concepts will be introduced. In price critical Germany, lists such as “100 wines to discover“ force you to price the wines in the range of €5 to €15. However, a short term recovery can be observed in this country.

Meanwhile, market participants who normally appear quieter are asking themselves whether the strategy will work in the long term. There are some large companies on the huge growing areas of Bordeaux. Families such as the Lurton family, who own over 600 hectares of vineyard, have to think seriously about their sales channels, and influence the development of the area with their economic power. Traditionally you do not show off wealth. This also applies to the Castel family. What started as a family vineyard in 1957, is today a company with a turnover of €3 billion. The majority comes from the worldwide sale of beer and water. Castel is the 7th richest drinks manufacturer in the world. The portfolio was poured into glossy brochures a long time ago. When it comes to company strategy however, where others use immodest superlatives for their own work, you can read expressions such as “sharing” and “humility”.Even with wine you follow a long term strategy. “We only buy unknown vineyards“, explains Philippe Castel, “no Grands Crus”. Until now there are 20, where he is optimising the terroirs and cellar work step by step, with the help of renowned oenologists such as Hubert de Bouärd. So, the value of each individual Château increases slowly, but surely. The wine sector of the family company is worth €30 to 35 million today. A prime example is the current top quality good Château Montlabert, on the doorstep of Saint-Émilion. Castel bought it in 2008. Then the subscription price was €15. Today it has more than doubled. The wine is available in restaurants, in specialist retailers, even in food shops. But here too, Philippe Castel sold a share via negotiants. This increases the level of awareness. “In addition they could refuse later, if they can’t now.”

Matthias Stelzig