In late May, a call was made: Bordeaux winemakers who want to uproot partial or all of their vineyards can now submit an application through an online platform. What may sound sad was eagerly awaited by most Bordeaux winemakers and even protested for in large demonstrations. The goal is to curb the massive overproduction of primarily red wines by clearing almost 10% of the largest French wine-growing area's land (108,000 ha). The French government and the EU are willing to invest up to €100m to restructure the market, offering vineyard owners approximately €6,000 per hectare, along with the costs of uprooting.
Significant overproduction
In 2022, Bordeaux produced 4.1m hl, of which 85% was red wine. Fortunately, this is below average, as the 10-year average stands at 4.6m hl. However, while the renowned Châteaux have little trouble selling their wines, a large portion of red wine production consists of generic entry-level wines sold in bottles or in bulk.
Or perhaps not sold at all: Only around 3.98m hl were sold last year, resulting in a 5% decrease. While uprooting vines aims to reduce future production, the surplus or stock from previous years faces a different fate: distillation. Around 2.5m hl will be processed into industrial alcohol across France. This will cost an estimated additional €160m, funded by taxpayers, as producers will be compensated with public funds to turn wine into spirits.
This is not a new issue. In 2005, approximately 180,000 hl were distilled when annual production exceeded 6m hl. At that time, discussions were also held about uprooting up to 10,000 hectares (about 25,000 acres). Ultimately, only 4,000 hectares (about 10,000 acres) were removed. With the support of stricter yield restrictions, the harvest volume was reduced by 17% within two years. Christian Delpeuch, the former President of the Conseil Interprofessionnel du Vin de Bordeaux (CIVB), declared, "The wine crisis in Bordeaux has come to an end."
Crisis reloaded
Now it's back, and it's not just Bordeaux that's affected. Other wine-growing regions have also resorted to the last resort of distillation. This happened recently when COVID-related lockdowns caused massive sales problems, leading to the removal of around 2.6m hl from the market. The current issue of overproduction also involves other regions like Languedoc and the Rhone Valley, which need to get rid of unmarketable surpluses. Christophe Chateau, the communication director at CIVB, even estimates that Languedoc will need to distill significantly more wine in crisis than Bordeaux.
As the largest region in France, with a strong focus on red wine, Bordeaux is at the center of the crisis. For some winemakers, the question of "to continue or not" arises. It's not just declining revenues due to reduced sales, but also the significantly rising costs that make it challenging for the approximately 5,300 wine producers to operate profitably. Many winemakers who produce entry-level wines are over 50 years old and are unable to find successors or buyers for their vineyards. "No one wants the vineyard plots even if they're given away," reports an industry insider.
A survey conducted by the Agricultural Chamber of the Gironde Department revealed that about a quarter of winemakers want to quit their profession. For them, subsidized vineyard removal is the only way to exit the wine business and receive at least some financial compensation.
Two very different Bordeaux
"There are actually two Bordeauxs," summarizes Tobias Lassak, the export manager at Grands-Chais-de-France subsidiary Crus et Domaines de France. And different dramas are unfolding in both areas. At the top end, the region is witnessing the departure of the major flagship estates from the classification system of the most prestigious appellations. These include the prominent Châteaux Angelus, Cheval Blanc, and Ausone in Saint-Émilion, which left in 2021/2022. They simply don't rely on the Grand Cru Classé certification on the label, as their names are already established brands, not only among wealthy consumers.
It is thanks to these Châteaux and their reputation that the entire region has achieved global fame. Although Liv-Ex's latest research shows that Bordeaux's position as the leading wine investment region is being challenged by other regions such as Burgundy, Bordeaux's Grands Crus Classés continue to demonstrate robust sales and retain their significant value.
"The more herbaceous, tannin- and acid-driven style with notes of bell pepper is no longer as well-received."
And the prices of the En Primeur keep skyrocketing year after year. However, they only represent an estimated 5% of the total vineyard surface. And even though they attract all the attention, it is the "second" Bordeaux where the large quantities are produced, supporting numerous jobs and livelihoods.
The two entry-level appellations, Bordeaux and Bordeaux Supérieur, account for 43% of the total area. They are currently in crisis focus, as confirmed by Bordeaux-expert Lassak: "The wine trade appears to show little interest in these wines; sometimes they remain unsold at the winery and the winemaker struggles to sell them." The problem lies in the (lack of) image of these more generic appellations. Especially in comparison to their famous neighbors. "Consumers are more likely to choose a Saint-Émilion for €15 than a Bordeaux Supérieur for €9 because the category is not well-known enough."
Delayed crisis
Lassak doesn't see it as a second crisis and emphasizes, 'The first crisis in the 2000s was never really over, as it had been claimed at the time. The enormous surge in sales in China simply masked the problem. Overproduction still existed but shifted to Asia."
More than half of the region's wine, 55%, is consumed in France. However, there has been a decline in consumption, as confirmed by the CIVB: "Domestic sales have been declining for years. Last year, consumption in France dropped to 40 liters per capita. And studies show that in the next 5-10 years, another 10 liters per capita will likely be lost, bringing it down to just 30 liters per capita," says Christophe Chateau. Consumers are drinking less but opting for higher-quality wines. There is less demand for heavy red wine, but lighter wine varieties such as white, rosé, and sparkling wine are gaining popularity. International market research also shows that red wine consumption has been declining for years and is expected to stagnate at best in the future.
Bordeaux is also facing challenges on many fronts abroad. Exports have recently decreased by 7% to 235m bottles. The crucial Chinese market has shrunk significantly due to COVID and consumption decline, with a 23% decrease compared to 2021, resulting in 41m bottles. During peak times, 70m bottles were exported. The fact that the value of exports could be increased or at least declined less than the volume, offers little comfort. This effect is primarily due to price increases by the leading wineries and inflation."
"Most people think of the big Châteaux when they hear Bordeaux, not the 95% or more that fall under the Bordeaux label. The customer base that still perceives the different appellations in Bordeaux is aging," says Andreas Brensing, managing director of the German specialist store Kölner Weinkeller. Bordeaux, he believes, has established its profile in the ultra-premium segment with top wineries functioning as brands. However, the region has hardly been introduced to consumers below that level. "It's a shame because there are indeed many small wineries that make an effort and deliver great quality at very good prices."
Has the region dug its own grave in terms of sales by focusing on its position in the luxury segment for too long?
Diversifying is key
"Bordeaux is the most well-known wine origin in the world," claims the CIVB, but they also admit that the consumer perception is that Bordeaux is (too) expensive.
As they metaphorically put it, the goal must be to "sell not only haute couture, but also prêt-à-porte.” Diversifying is key, especially in terms of markets. The ratio of domestic to international sales needs to be reversed. As a result, future exports will take on greater importance, reducing dependence on the French consumer. In addition, new markets should be opened. Bordeaux already experiences high double-digit growth rates in some African countries. For example, Ivory Coast already ranks 9th in terms of volume with 6m bottles per year (for Nigeria, see HERE). North America also promises significant growth potential, particularly in terms of value appreciation. The wealthy and wine-loving Scandinavia is currently only represented by Denmark on the leading 20 export list, ranking 16th in volume. “Sales will also rebound in China," says Christophe Chateau, as the strictest Covid measures gradually ease. Emerging markets in Asia include smaller countries such as South Korea, Taiwan and Vietnam.
Focus on organic
A significant part of the current Bordeaux offensive revolves around the themes of organic and sustainability. This is an important approach, considering that the region has always had to fight a variety of vine diseases with pesticides. This often gave Bordeaux a bad reputation, as seen with Valérie Murat and her initiative "Alerte aux Toxiques!" (engl. “Toxic alert!”) that even took legal action against pesticide use in the region. Even Communication Manager Chateau admits, "Over the past 40 years we have done a poor job as a wine region. However, this has been changing recently." The goal is to quickly catch up in the organic sector.
The numbers communicated by the association speak for themselves: as of 2021, more than a quarter of the vineyards, totaling 25,310 hectares (about 62,500 acres), are certified organic or are in transition. Moreover, 75% of the vineyard area is now awarded at least one environmental certificate.
The organization considers the inclusion of the Haute Valeur Environmentale (HVE) certification as secondary due to its liberal regulations on chemical pesticides, which have been criticized in France and other places. "We do not see the certificates as competing with each other but believe that every step towards environmental protection is a good and right step," says Chateau.
The focus of the communication campaign is primarily on organic viticulture. The message is: "Bordeaux is going green.” Organic does, however, not equate to sustainability. Initial efforts are therefore being made to adopt a holistic approach that goes beyond the vineyard. For this purpose, the region's own label "Bordeaux Cultivons Demain" was developed in 2020. It considers social and economic aspects and aims to promote exchange among producers, from small winegrowers to large cooperatives. By the end of 2023, around 200 producers are expected to be certified. Furthermore, by 2030, the region aims to reduce its greenhouse gas emissions by 54% compared to 2007. As of today, it has already achieved a reduction of 39%.
New styles on the horizon
Tobias Lassak suggests that the "the more herbaceous, tannin- and acid-driven style with notes of bell pepper” is no longer as popular. "Bordeaux wines are primarily known as a dinner accompaniment," adds Caroline Vigneron, Brand and Export Manager at CIVB. "Therefore, we must adapt to different moments of enjoyment and establish Bordeaux as a wine for less formal drinking occasions."
But easily understandable red wines, specifically Easy-Drinking, are also on the agenda. "We want to offer new profiles, new producers, and new techniques," summarizes Vigneron. Bordeaux is now delivering on this, as Lassak also notes: "We see interest and increasing demand for a new type of Bordeaux wines with a more approachable wine style - and they exist!"
Thomas Seguy, Export Manager of the largest cooperative in the region, Tutiac, which has 550 members managing a total area of 5,000 hectares (about 12,300 acres) confirms: "Over the years, we have increased our production capacity for white wines and worked intensively on the quality of our rosés. They are now an important asset for us. Tutiac is also increasingly focusing on crémant or hybrid varieties, which are now being grown experimentally in the region.
...and other labels
The classic Bordeaux bottle is history for many products, and the strict traditional label featuring the image of a (symbolic) château is a thing of the past. Instead, colorful labels compete for the consumer's attention. Witty or philosophical wine names and slogans break the stereotype of the noble drop. Many wines are filled "sans soufres ajouté," without added sulfur, aged in amphorae, or even bottled in innovative paper bottles in line with reducing the CO₂ output. Or at least in lightweight glass: producers have mostly switched from a 600-gram bottle to 440 grams, they say. Many wines are released young, dispelling the often misguided notion that entry-level qualities require aging.
Varietal transparency
New and old varieties in cultivation and marketing are the next keyword in the region's strategy document. Where non-wine-savvy consumers were previously in the dark about the grape variety mix, the contents of the bottle are now more actively communicated. Not only in small print on the back label but prominently on the front as a selling point. Because it is no longer just the classic Bordeaux blend with the well-known combination of Cabernet Sauvignon, Cabernet Franc, and Merlot that is bottled. Increasingly, wines are made from a single variety. Even Petit Verdot and Malbec, which are actually classics of the region but rarely chosen by consumers, paint a picture of a more diverse Bordeaux.
The INAO Appellation Authority approved several new grape varieties in 2020, including Marselan, Touriga Nacional, Castets, and Arinarnoa for red wines, and Alvarinho, Petit Manseng, and Liliorila for white wines. Initially, these varieties were approved for Bordeaux and Bordeaux Supérieur.
These varieties, native to hotter regions, serve to prepare the region for the ongoing climate change and warmer temperatures. The CIVB also welcomes the side effects of broadening Bordeaux's market positioning.
Many of Bordeaux's problems are not unique. However, with a vast vineyard surface comparable to that of Germany, the of adapting flexibly to changing market conditions is greater. The dynamic approach the region is taking to ensure its future sustainability is cause for optimism.
"Union des Vignerons Bordeaux Pirate" is the name of a collective formed by 30 winemakers from Bordeaux, who aim to produce and promote wines that are "off the beaten path." They all share a desire for distinctiveness, innovation, and individuality. This can include reviving old grape varieties, using alternative packaging, employing unique marketing strategies – basically anything that sets them apart from traditional Bordeaux wines and often challenges the AOP regulations.
The idea for this project emerged in 2019, initially as an open Facebook group for like-minded individuals to exchange ideas. Since then, the group has grown to over 3,500 members. In 2020, they made their first public appearance as a group at the Wine Paris.
They position themselves as the "third way," a path that lies between the exclusive world of Grand Cru wines and the entry-level, often bulk-produced wines lacking a distinct character. Since 2022, the collective has been officially registered as an association.
However, there are still some rules to follow. To become a member, one must pay an annual fee of €400 (for wineries below 10 hectares it's reduced to €200) and present at least one of their wines to an expert jury. There are two categories: "Bordeaux Pirate" for Bordeaux AOP wines and "Cuvée Pirate" for Vin de France. However, when it comes to production, winemaking techniques, and marketing, there are no specific guidelines imposed. This should enable new approaches and maximise innovation.
