Jamie Ritchie is the Worldwide Chairman of Sotheby’s Wines & Spirits. Originally from the London office, he launched Sotheby’s wine auctions in New York in 1994, and then Hong Kong in 2009. More recently, he has opened Sotheby’s wine auctions in France in 2021. He’s been responsible for many other wine initiatives, including launching Sotheby’s Wine, a New York retail store and online wine business, with a second location in the Sotheby’s gallery in Hong Kong. A range of Sotheby’s Own Label wines was introduced in 2019. He has also created auction partnerships with the Hospices de Beaune, The Worshipful Company of Distiller’s, and the Napa Valley Vintners.
Meininger’s: What’s your take on the spectacular price rises of Burgundy and how they are affecting the market at the moment?
Ritchie: Burgundy has been the strength of the marketplace for the last couple of years. The prices across the board, from the Bourgogne level through to the top Grand Crus have gone up. Obviously, the most in-demand producers have gone up more than anything else. I guess we’ve seen a plateauing of the prices, and we’ve seen less demand coming out of Asia. Specifically in mainland China, Hong Kong, and Taiwan.
The price has reached a level whereby there’s a more limited market for them. If there’s more caution in the marketplace, then I would think those prices will come down.
Meininger’s: Another thing that people are telling me, especially in the restaurant trade, is that there's a flight to value happening. People are still spending money, but they're not as keen on trying new things as they were in the past. Is that being reflected in auctions?
Ritchie: Certainly people want and need things that are good value. That’s across the board. We don’t see people being less adventurous. If anything, they're being a bit more adventurous because they want value things to buy.
Meininger’s: Bordeaux's market share has fallen, although the overall market is growing. What are you seeing in terms of who's buying Bordeaux and who's not?
Ritchie: Yes, Bordeaux’s market share by value has fallen. It used to represent over 70% of our business for many years. And now it’s around 27%. That’s really a consequence of two things. One is the rising demand and rising price of Burgundy compared to Bordeaux. Second because we’ve introduced spirits into our marketplace and that’s become 25% of our business. So I would say about Bordeaux — generally speaking, younger vintages are pretty flat, but older vintages that are ready to consume and enjoy are still seeing strong demand.
We have roughly 40% of our new buyers under 40. (...) But, regrettably, we don’t see as many women collectors as we would like.
Meininger’s: What's happening in terms of younger people generally, but women in particular, moving into the secondary fine wine market? And if it's happening, where is it happening?
Ritchie: The digital tools enable, or certainly appeal to, a younger generation of buyers. We have roughly 40% of our new buyers under 40. Globally, it’s in every area. It’s Asia, it’s America, it’s Europe. In terms of women in the secondary market as collectors, we still see relatively few. When we do see them, they tend to be on a larger scale and have some impact. But, regrettably, we don’t see as many women collectors as we would like.
Meininger’s: What do you mean by “on a larger scale”? Do you mean they spend more money?
Ritchie: Yes, if they’re in the marketplace, they are significant collectors, We have a range of people who buy you more affordable wines, all the way through to people who spend a lot of money and build big collections. The female buyers we have tend to be in the latter category. Important buyers with significant collections.
Meininger’s: And where in the world are they clustered?
Ritchie: A scattering of people worldwide.
We’ve seen very strong demand for white Burgundy. I think people are beginning to understand that it can be absolutely as complex as red Burgundy.
Meininger’s: What else has changed?
Ritchie: White Burgundy. We’ve seen very strong demand for white Burgundy. I think people are beginning to understand that it can be absolutely as complex as red Burgundy. And despite the oxidation issues that we still witness, we’ve seen very strong demand for white Burgundy across the board.
Meininger’s: The financial press has been full of the fact that there are more High Net Worth Individuals. There are lots more of them because of the pandemic. Have they changed the market in any way?
Ritchie: I think they’ve just further contributed to the strength of the marketplace demand for Burgundy across the board. We see lots of younger people who have created wealth. That’s globally. I don’t think there’s a specific category that they’re buying in, but they’ve certainly contributed to the price of Burgundy rising. With new collectors, they don’t compare prices. Older collectors will go back and think, “OK, well this used to be X price and now it’s Y price”, whereas younger collectors don’t tend to do that comparison. They compare it to “This is a bottle of X which costs $500, and a pair of sneakers costs $500.” They don’t really have that historical comparison to go back to, which means they still tend to be less price-resistant.
Meininger’s: When we're talking about younger buyers, how young are we talking about?
Ritchie: You know, 40 and under.
Meininger’s: Okay. Is this something that people don't start until they turn 30? Or is it something that that people do when they get rich?
Ritchie: Generally speaking, it’s the 30-to-40-year-olds. You get relatively few under 30. But you get a few.
Meininger’s: One of the things that Pauline Vicard, the CEO of ARENI, has been remarking on lately is that some of the big houses — particularly Champagne houses — are beginning to remove their wines from the market and are instead selling them to private clubs. What impact is this going to have on brand building? Will it make those wines more exclusive and sought after, or are they taking a risk that removing a wine from the open market will reduce its cachet?
Ritchie: That’s an interesting one. I think globally there is a move across wine and spirits to DTC, direct to consumer, and we're seeing that obviously with Champagne, we're seeing it with Burgundy. We're going to start seeing it with Bordeaux. I think the spirits brands are doing it as well. I think the transition to DTC being a more significant channel is going to continue to happen.
The impact on the marketplace will depend on how much they put through those channels, and whether those channels are still consuming them or just storing them. You need consumption, to be continued. I think DTC is one channel which will continue to grow, but most brands will still want their wines in the marketplace, whether that’s through the on-trade or the off-premise.
Hong Kong is still going to be the most important centre for us, certainly in the near term.
Meininger’s: I’m hearing that Singapore is becoming a more important wine hub, as many people from Hong Kong are moving there because of the political situation. What’s your response? Is Hong Kong still as dynamic as it was, or is the centre of gravity shifting to other parts of southeast Asia?
Ritchie: Hong Kong is still super important. It’s a zero-tax place—no tax on wine. So I think Hong Kong is still going to be the most important centre for us, certainly in the near term. We continue to see that as our main base. Singapore is certainly a very energetic and exciting place to be right now. And there are certainly many, many people with wealth in Asia who are moving there. From what I saw, it is mostly mainland Chinese rather than Hong Kong.
Singapore has political stability and I think it will continue. We see all sorts of strength throughout Southeast Asia: Vietnam, Thailand and Indonesia, and I think that will play an increasing and interesting role in the marketplace. Singapore will continue to grow and become a more important place in the wine market, for sure. But I think Hong Kong will probably remain the centre of sales for the foreseeable future.…
We will be travelling more to Asia than we have done in the last couple of years, obviously. I think it’ll continue to be the most important region of growth for wine sales.
Meininger’s: Finally, a two-part question. If you look back on 2022, what were the big things that happened and—what do you predict for 2023?
Ritchie: The Hospices de Beaune sale [conducted by Sotheby’s] achieved €32m in sales. When we started working with the team at the Hospices de Beaune, I was thinking maybe €20m would be in our sights in a five-year time period. I never, ever thought we’d get to €30m, particularly in two years. I think that obviously shows the record demand for Burgundy worldwide [and] the fact that [winemaker] Ludivine Griveau and her wine team are getting more recognition for the quality of the wines they’re making. And I think we’ve been more efficacious and enthusiastic and professional about how we run the auction. That just really encapsulates the demand for Burgundy worldwide.
The rest of the year has been continued strength in demand. We've seen prices at the level they've been, which has attracted sellers to come out and sell their wines. And so we've seen a lot of strength in the marketplace.
I think now we see more of a plateauing in prices. I would expect next year that we'll still continue to see a healthy demand for wines that are ready to drink. Maybe a softening at the very top end. But we've seen strong demand from Asia and continued resilience in Europe. So I would expect the market to be pretty consistent next year with a good level of supply. And it's all matched with equal level of demand. I’m not sure there’s going to be more price appreciation but levelling out next year.