William Kelley 2020 Burgundy vintage report

[Andrew_K]

I’m hearing +50% ex-domaine for several well-known domaines.

Probably the Domaines that didn’t already do +50% in 2019. I’d imagine they saw their bretheren succeed and followed suit. Not to mention costs are up huge everywhere.

Did you really see producers that were up 50% ex-Domaine from ‘18 to ‘19? I saw some bumps but nothing that high.

Bouchard was the main offender in my stable. Beze was up over 50%.

[Andrew_K]

Anyone know when the drc package prices for 2019 come out?

C&B allocations come out in early Feb.

[Andrew_K]

SOme domaines that went up 40-50% for 2019 vintage will be higher again for 2020 according to my sources.

Naturally, but up another 50%? Seems unlikely but not impossible.

[A_Gillette]

Probably the Domaines that didn’t already do +50% in 2019. I’d imagine they saw their bretheren succeed and followed suit. Not to mention costs are up huge everywhere.

Did you really see producers that were up 50% ex-Domaine from ‘18 to ‘19? I saw some bumps but nothing that high.

Bouchard was the main offender in my stable. Beze was up over 50%.

Wow. Well, I guess in retrospect they were just ahead of the curve!

[Nick_Gangas]

Hmm. Oregon here I come.

[Andrew_K]

Hmm. Oregon here I come.

Don’t get me started on Oregon pricing…

[P_L_owet]

But of course all that is patterned and complexified by farming!

William,
Your insights are excellent, blah, blah, blah. But I really want to thank you for using “complexify” in a sentence! Is this proper usage: The 2020 pricing is really going to complexify my purchasing decisions.
Regards,
Peter

[dbailey]

But of course all that is patterned and complexified by farming!

William,
Your insights are excellent, blah, blah, blah. But I really want to thank you for using “complexify” in a sentence! Is this proper usage: The 2020 pricing is really going to complexify my purchasing decisions.
Regards,
Peter

Surely, it would be more correct to say that it will simplify your purchasing decisions…

[Dennis_Borczon]

I have to agree about prices, this is now a truly crazy train. If not Oregon, Cote Chalonnaise will get a lot harder look from me. It seems the bottom starting price in the Cote D’Or will be about $125.00 in decent Beaune 1er reds; maybe $150.00 for Corton GC, Pommard 1ers at $125-150, and the sky is the limit after that. Maybe Savigny is also going to be worth more of a look. Curious to see what the more restrained pricing in Volnay stars are going to look like. They always seemed to not lose their head with good vintages. Looks like the entry point for well made interesting Borgogne sourced from the Cote D’Or is going to get priced about $50.00 and up. Not that long ago I got a case of Hudelot Noellat 2015 Bourgogne for $25.00 per unit. That is not such a distant memory…$100.00 Bourgogne rouge anyone?

First and second growth Bordeaux is going to start looking downright sensible in price!

[William_Kelley]

I have to agree about prices, this is now a truly crazy train. If not Oregon, Cote Chalonnaise will get a lot harder look from me. It seems the bottom starting price in the Cote D’Or will be about $125.00 in decent Beaune 1er reds; maybe $150.00 for Corton GC, Pommard 1ers at $125-150, and the sky is the limit after that. Maybe Savigny is also going to be worth more of a look. Curious to see what the more restrained pricing in Volnay stars are going to look like. They always seemed to not lose their head with good vintages. Looks like the entry point for well made interesting Borgogne sourced from the Cote D’Or is going to get priced about $50.00 and up. Not that long ago I got a case of Hudelot Noellat 2015 Bourgogne for $25.00 per unit. That is not such a distant memory…$100.00 Bourgogne rouge anyone?

First and second growth Bordeaux is going to start looking downright sensible in price!

I think we all need to start buying Bordeaux to take the pressure off Burgundy


More seriously, ex-domaine increases will certainly push prices up. But honestly, if a 50% rise ex-domaine takes the wholesale price of a wine up to 150 EUR, and the wine is trading for 1,600 USD, who is really driving the pricing? This is the big conundrum Burgundy is going to have to wrestle with in the next decade.

[Howard_Cooper]

Glad I have a whole lot of Burgundy in my cellar and really am too old to cellar much young higher end Burgs.

[J_a_y_H_a_c_k]

. . .

So is this Kelley guy any good? I was a TWA subscriber for years but dropped it when, well, you know. I have been planning to re-subscribe since Joe was named EIC because he is a real human being who plays hockey and does not wear a silk ascot, but it would be nice to know that there are two good guys in the fold, even though the other one is forced to review Burgundy.

PS - When should I open my 2005 Hospices Grand Crus?

[J_a_y_H_a_c_k]

. . . More seriously, ex-domaine increases will certainly push prices up. But honestly, if a 50% rise ex-domaine takes the wholesale price of a wine up to 150 EUR, and the wine is trading for 1,600 USD, who is really driving the pricing? This is the big conundrum Burgundy is going to have to wrestle with in the next decade.

Let’s talk serious economics for a moment. Short term analysis says that the better domaines and negociants should follow the prices up until they can no longer sell out their entire production, which will of course drag up the prices of the lower tier producers. The question, which I cannot answer with any degree of certainty, is whether that will result in too many people looking for alternative sources of alcoholic beverages (Ray Walker Bourbon?), to the extent that when the market turns, the people who have left Burgundy for other (greener?) pastures do not return. I know that a number of highly allocated California wines experienced this and they are now begging me to return to the fold after I dropped them 10+ years ago because either the prices got out of hand or the customer service stunk.

Basic marketing analysis shows that the cost of retaining an existing customer is much less (IIRC one-sixth) the cost of getting a new customer, so customer loyalty is a very valuable commodity. This indicates that squeezing the last dollar out of this year’s production may be short sighted if it means that you price your existing loyal customers out of the market.

[Howard_Cooper]

. . . More seriously, ex-domaine increases will certainly push prices up. But honestly, if a 50% rise ex-domaine takes the wholesale price of a wine up to 150 EUR, and the wine is trading for 1,600 USD, who is really driving the pricing? This is the big conundrum Burgundy is going to have to wrestle with in the next decade.

Let’s talk serious economics for a moment. Short term analysis says that the better domaines and negociants should follow the prices up until they can no longer sell out their entire production, which will of course drag up the prices of the lower tier producers. The question, which I cannot answer with any degree of certainty, is whether that will result in too many people looking for alternative sources of alcoholic beverages (Ray Walker Bourbon?), to the extent that when the market turns, the people who have left Burgundy for other (greener?) pastures do not return. I know that a number of highly allocated California wines experienced this and they are now begging me to return to the fold after I dropped them 10+ years ago because either the prices got out of hand or the customer service stunk.

Basic marketing analysis shows that the cost of retaining an existing customer is much less (IIRC one-sixth) the cost of getting a new customer, so customer loyalty is a very valuable commodity. This indicates that squeezing the last dollar out of this year’s production may be short sighted if it means that you price your existing loyal customers out of the market.

Right now, for many of the most allocated Burgundies, the price cellar door is pretty reasonable for their long-term customers who have allocations. I have a friend with allocations at a couple of the blue bloods and am fascinated by the prices he pays. Prices in the US have been disconnected from cellar prices for a number of years and now prices at stores in Burgundy seem to be following suit (or are heavily allocated and tied - have to buy other things to be able to buy these wines). Even this has been getting harder in recent years. I used to be able to get Ramonet whites from one place if I bought their reds (not at all a hardship). Now, I am lucky to get Ramonet’s reds. With the huge markups in the secondary market, it is not surprising to see wineries want to capture more of that. It reminds me of cult Cabs that went way up in price because people on their lists were buying them to flip them.

I agree with you with respect to lower tier producers. I wonder if they will be able to raise prices and make it stick.

[Jurgen_Steinke]

As long as people with deep pockets buy wines without thinking of the price this will not end. And since I know that plenty people exist who make millions a year I am not optimistic what the trend in the future will be. The top names and Grand Cru Burgundy are not interesting to me anymore. I will not spend huge money for a bottle of wine. I am glad that Rully, Marsannay etc. are not so much in fashion so far. But if the wine critics will focus more on this areas it is only a matter of time until these wines will get expensive too.

To me the challenge and fun these days is to find superb wine makers beside the main stream. Those exist. Fortunately.

[Dennis_Borczon]

. . . More seriously, ex-domaine increases will certainly push prices up. But honestly, if a 50% rise ex-domaine takes the wholesale price of a wine up to 150 EUR, and the wine is trading for 1,600 USD, who is really driving the pricing? This is the big conundrum Burgundy is going to have to wrestle with in the next decade.

Let’s talk serious economics for a moment. Short term analysis says that the better domaines and negociants should follow the prices up until they can no longer sell out their entire production, which will of course drag up the prices of the lower tier producers. The question, which I cannot answer with any degree of certainty, is whether that will result in too many people looking for alternative sources of alcoholic beverages (Ray Walker Bourbon?), to the extent that when the market turns, the people who have left Burgundy for other (greener?) pastures do not return. I know that a number of highly allocated California wines experienced this and they are now begging me to return to the fold after I dropped them 10+ years ago because either the prices got out of hand or the customer service stunk.

Basic marketing analysis shows that the cost of retaining an existing customer is much less (IIRC one-sixth) the cost of getting a new customer, so customer loyalty is a very valuable commodity. This indicates that squeezing the last dollar out of this year’s production may be short sighted if it means that you price your existing loyal customers out of the market.

Right now, for many of the most allocated Burgundies, the price cellar door is pretty reasonable for their long-term customers who have allocations. I have a friend with allocations at a couple of the blue bloods and am fascinated by the prices he pays. Prices in the US have been disconnected from cellar prices for a number of years and now prices at stores in Burgundy seem to be following suit (or are heavily allocated and tied - have to buy other things to be able to buy these wines). Even this has been getting harder in recent years. I used to be able to get Ramonet whites from one place if I bought their reds (not at all a hardship). Now, I am lucky to get Ramonet’s reds. With the huge markups in the secondary market, it is not surprising to see wineries want to capture more of that. It reminds me of cult Cabs that went way up in price because people on their lists were buying them to flip them.

I agree with you with respect to lower tier producers. I wonder if they will be able to raise prices and make it stick.

Beggars the question why the Burg producers don’t just set up their own cooperative to deliver highly allocated wines direct to consumer, with the usual methods of including a spread of lower level wines. If the markups are as drastic as WK suggests, then they should have the incentive to take the profit out of the middleman’s hands and put it in their own pocket. Cannot believe working out a client list and shipping the wines worldwide is that much of a headache. If Becky Wasserman could do it, why not the Roumiers/Rousseau’s/DRCs/Leroy’s/ and the rest of the high tier wine producers like Dujac who are approaching that level pull it off? I can order wines directly from negoce/domains like Drouhin and Boillot as well as Bouchard. …

[Mark_Golodetz]

Let’s talk serious economics for a moment. Short term analysis says that the better domaines and negociants should follow the prices up until they can no longer sell out their entire production, which will of course drag up the prices of the lower tier producers. The question, which I cannot answer with any degree of certainty, is whether that will result in too many people looking for alternative sources of alcoholic beverages (Ray Walker Bourbon?), to the extent that when the market turns, the people who have left Burgundy for other (greener?) pastures do not return. I know that a number of highly allocated California wines experienced this and they are now begging me to return to the fold after I dropped them 10+ years ago because either the prices got out of hand or the customer service stunk.

Basic marketing analysis shows that the cost of retaining an existing customer is much less (IIRC one-sixth) the cost of getting a new customer, so customer loyalty is a very valuable commodity. This indicates that squeezing the last dollar out of this year’s production may be short sighted if it means that you price your existing loyal customers out of the market.

Right now, for many of the most allocated Burgundies, the price cellar door is pretty reasonable for their long-term customers who have allocations. I have a friend with allocations at a couple of the blue bloods and am fascinated by the prices he pays. Prices in the US have been disconnected from cellar prices for a number of years and now prices at stores in Burgundy seem to be following suit (or are heavily allocated and tied - have to buy other things to be able to buy these wines). Even this has been getting harder in recent years. I used to be able to get Ramonet whites from one place if I bought their reds (not at all a hardship). Now, I am lucky to get Ramonet’s reds. With the huge markups in the secondary market, it is not surprising to see wineries want to capture more of that. It reminds me of cult Cabs that went way up in price because people on their lists were buying them to flip them.

I agree with you with respect to lower tier producers. I wonder if they will be able to raise prices and make it stick.

Beggars the question why the Burg producers don’t just set up their own cooperative to deliver highly allocated wines direct to consumer, with the usual methods of including a spread of lower level wines. If the markups are as drastic as WK suggests, then they should have the incentive to take the profit out of the middleman’s hands and put it in their own pocket. Cannot believe working out a client list and shipping the wines worldwide is that much of a headache. If Becky Wasserman could do it, why not the Roumiers/Rousseau’s/DRCs/Leroy’s/ and the rest of the high tier wine producers like Dujac who are approaching that level pull it off? I can order wines directly from negoce/domains like Drouhin and Boillot as well as Bouchard. …

This makes sense, but it does hurt clients who have been buying for years. However, they have as I said, been buying for years under current market pricing.

I am not buying any more. Apart from the actuarial problems of someone of my age buying a wine and hoping to be around to drink it, I am tired of the whole exercise.
I have a decent amount of older Burgundy, and a few Cote de Beaune reds I will still buy, but I am stepping off the Burgundy merry go round.


DRC is no longer a beverage, it is a financial instrument.

[Andrew_K]

Wow. Well, I guess in retrospect they were just ahead of the curve!

Ah, Trapet was the other one I forgot. Not quite 50%, but 30-40% across the board.

[Andrew_K]

Beggars the question why the Burg producers don’t just set up their own cooperative to deliver highly allocated wines direct to consumer, with the usual methods of including a spread of lower level wines.

That’s how it works with DRC here in the US. For those in the club.

[Dennis_Borczon]

Beggars the question why the Burg producers don’t just set up their own cooperative to deliver highly allocated wines direct to consumer, with the usual methods of including a spread of lower level wines.

That’s how it works with DRC here in the US. For those in the club.

But the club is kind of a secret club. If they just had a mailing list, you could sign up and wait. Even Screagle let’s you do that…