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Published:  23 July, 2008

Bordeaux has arrived in the world of brands kicking and screaming. With a greater volume output than Chile, the region certainly has the resources to unleash some major labels, but does it have the infrastructure and the unity of purpose? Bordeaux's key figures talk to Roger Voss about the unique hurdles to be overcome

Bordeaux claims to be the largest fine wine area in the world. It produces as much wine as Chile. Yet it cannot support a truly global wine brand. Its infrastructure, its traditions, its attitudes combine to make Bordeaux the sack race entry in a 100-metre sprint. Talk to any of the major brand owners in Bordeaux and the story is the same. We just don't have the volume of wine to let us make a brand on the same scale as Gallo or a top Australian brand,' says Jean-Franois Mau of Yvon Mau. The Bordeaux ngociants are too small, without the power or the scope of the big New World players.' There are more than 300 branded wines coming from the 400-plus ngociants in Bordeaux, and this doesn't take into account the 5,000 or more chteaux. The biggest Bordeaux brand, Mouton Cadet, sells 12 million bottles. Mau's Yvecourt sells 4.5 million bottles. Ginestet's Marquis de Chasse brand sells three million bottles. Castel Frre's Baron de Lestac and William Pitters' Malesan have sales of between eight and nine million each. These are all big players in Bordeaux terms, yet they are small in any global context: Jacob's Creek sells 60 million-plus bottles worldwide, while Gallo sells 300 million bottles. Even in the UK, Stowells of Chelsea, with sales of the equivalent of 36 million bottles, is much larger than any Bordeaux brand. And wine brands worldwide are small: the top 25 brands combined equal only 8% of global wine sales. Bordeaux produces nearly 900 million bottles of wine every year. Of that total, 37% is exported, with the main markets being the UK, Germany, the US, the Benelux countries and Japan. Only 100 million bottles of the total production are sold as generic Bordeaux brands, either under the name of a ngociant or as an own-label brand. Of course, brands can mean many things in Bordeaux. If Chteau Margaux isn't a brand, then what is? I am not talking luxury here, but the 3-5 wine that your 28-year-old sister-in-law will buy. In this category, at least as far as the UK is concerned, Bordeaux brands just do not exist. So, who is Bordeaux trying to sell to? One man who thinks he has an answer is Dan Jago, managing director of London-based agency Bibendum. We found there were two groups of wine drinkers as far as Bordeaux is concerned. The younger group didn't know that Claret was red Bordeaux, and thought that, anyway, it was a wine for older people. The older group thought Claret meant good, prestigious wine, but that it was expensive.' Bordeaux is tormented with the problem of creating a global brand. There are those who argue that Bordeaux needs to create a Banrock Station or Jacob's Creek. Allan Sichel, of ngociant Maison Sichel, and president of the Syndicat des Ngociants, says: It would do Bordeaux a lot of good to have a very big brand. What Bordeaux needs is greater visibility to non-expert consumers and a big brand is a great way to do it. It could carry the intrinsic values of Bordeaux out to a much wider public.' On the other hand, there are the Bordelais who believe that, given its structure, Bordeaux can never compete in terms of big-volume brands. They cite the costs of marketing - Gallo spends $65 million a year on advertising, which is unimaginable to a Bordeaux brand owner. Sichel lists some of the sales and marketing costs: you need to buy shelf space, pay for promotions, advertise, sponsor - it can take decades and it is very expensive'. And then there are the difficulties of distribution. Jean-Michel Cazes, who produces Michel Lynch under the JM Cazes Slection label, says, If you get into volume production, then you have to go through distribution channels which are very difficult to handle'. For these producers, the solution is niche brands, selling a maximum of three or four million bottles, sometimes less than a million. Cazes believes that a huge volume brand is not desirable. With a mid-size brand you are easily able to adapt volume and quality, which is a great plus. We are looking to niche markets.' There is a growing crowd of such niche market brands coming out of Bordeaux. CVBG Dourthe-Kressmann's Dourthe Numro 1 has a production of 650,000 bottles. The company president, Jean-Marie Chadronnier, says, We have a limited production of a range of ten chteau wines and three or four brands, all sold under the Vins Signatures de Dourthe name, which individually are small, but which have total sales of about four million bottles. That means we fit into a whole range of niches.' Maison Sichel sells 1.2 million bottles of its premium brand, Sirius, in red and white. This was one of the first on to the niche brand scene, when it was launched in 1988. It was also the first time a brand owner controlled the production of the wine as well as the blending and marketing, through the creation of its own vinification centre.

Niche wines and poor fruit The latest brand to hit the world is from Bibendum and Grands Vins de Gironde (GVG), the largest Bordeaux ngociant. Named Lafayette, after the revolutionary Marquis de Lafayette, who was involved in the American Revolution, the 1789 French Revolution, the fall of Napoleon and the French Revolution of 1830, it will launch at a price point of 4.99 in July. It is a non-vintage wine (people don't worry about vintage', says Jago), with planned initial sales of 1.8 million bottles. Jago is launching Lafayette in the UK, and GVG in Europe. With some success, the US will follow. Producta, the grouping of Bordeaux co-operatives, is also launching a new brand at Vinexpo, in conjunction with Adel UK. Using the expertise of Australian winemaker David Morrison, the new wine, Right Bank, is in a fruity style aimed firmly at the UK market. Alexis Fourault, Producta's export director, believes that the Right Bank of the Gironde offers a style that is particularly well adapted to the tastes of the UK market'. Initial sales are 150,000 bottles. Niche brands, even mid-size brands, are a solution to some of the hurdles Bordeaux faces in creating a global brand. The infrastructure of the region remains a serious stumbling block: there are at least 12,000 growers, many with tiny vineyards. They fall into two camps, with vastly different ambitions. One camp wants to bottle its own wine, and aspires to get the same price for it as a classed growth. Growers in this group either don't want to sell their grapes for brands, or are only willing to sell their second-best fruit. The other camp - the largest number - wants a quiet life. As long as it can take its high-yield fruit (60 hl/ha is preferable) along to the local co-operative or to the ngociant, then these growers are content. Although this has been changing over the last five years, there are still many who rarely have an incentive to go for quality over quantity. The net result of these two differing viewpoints is that any large company wanting to buy grapes or wine to make a brand is faced with second-rate, often underripe fruit. Hamilton Narby, whose ngociant firm, Vinta, sells La Croix Barton, a joint development with the Barton family of Chteau Loville-Barton, says, It is getting more and more difficult to buy quality wine on the bulk market. Fewer and fewer growers are prepared to sell their wine in bulk. They all want to bottle their own wine.' A smaller, but equally vital supply problem concerns white wine. With the grafting of white vines to red, there is now a serious shortage of white wine in Bordeaux. Every brand needs a white offering to go alongside the red, but, says Narby, six months ago, when we were still selling the 2001 vintage, there was no Sauvignon Blanc left in Bordeaux. It had been bought and it had gone.' A few ngociants have avoided this stumbling block of sourcing supply by paying their grape growers a premium for quality. Ginestet is one. Christian Delpeuch, the company's director general, says that Ginestet's policy is to pay growers a premium of up to 30% for quality grapes. One advantage of this policy is that it cuts down on the bane of Bordeaux - vintage variation. We choose different lots of wine to maintain the quality,' he explains. While Champagne blends across years, we blend across vineyards. That means even in [a poor year like] 1997, we can produce the same quality.' CVBG Dourthe-Kressmann has followed Sichel in controlling the production from the vineyards upwards. The firm's Dourthe range of wines is sourced as much as possible from the company's own grapes. Jean-Marie Chadronnier says this is the logical extension of the inevitable consolidation in Bordeaux. It is not just ngociants and merchants who have to consolidate, it is also vineyards. We need to decouple production of grapes from vinification, so that more growers are persuaded to sell their grapes to larger organisations better suited to vinification - in other words, wineries in a New World sense.'

The chteau concept Bordeaux is continuing to strive for quality, through a tighter application of the labelle system for getting appellation status, through downstream control and through a level of technology in the wineries and vineyards that is second to none in the world. Quality has impacted on the brands produced by large companies which can afford good equipment. But it has left many smaller producers, what the market calls petits chteaux, outside. Angela Muir MW, director of UK-based consultant Cellarworld International, says, Small growers in Bordeaux can't afford to get round the problem that the region is marginal in viticultural terms. The result is that the quality of viticulture is all over the place, from one vineyard to the next.' The plight of many petits chteaux wines has affected their place in the market, especially in France. Francis Cruze, director of the Union des Maisons de Bordeaux, the ngociant's umbrella organisation, says, There used to be a sensible price pyramid, with generic Bordeaux wines at the bottom, then petits chteaux, then classed growths. Now, brands, because of their better quality and because their distribution can be controlled by bigger firms, are selling in French supermarkets for higher prices than many petits chteaux. That is both confusing and it demeans the word "chteau", which is part of the Bordeaux dream offering.' The chteau concept is not just central to Bordeaux, it is central to Bordeaux brands. Mouton Cadet, after all, was created by the owners of Chteau Mouton-Rothschild. While Charles Marshall, senior marketing manager at Paragon Vintners, the British distributor of Mouton Cadet, says that we don't make a logical connection between Mouton Cadet and Mouton-Rothschild', you can bet that the consumer does. And Bordeaux brand owners are keen to emphasise the Bordeaux origins of their wine. Bordeaux must be the best-known wine region in the world, after Champagne. Marshall himself is very happy with the Bordeaux Wine Council's Brand Bordeaux promotions: It is exciting times for Bordeaux,' he says, and we can be part of the promotion. It creates a feelgood factor for the region.' Bordeaux, as it is presently structured, is incapable of producing a global brand in the same league as Gallo or Lindemans. That is accepted by every participant in the Bordeaux market, whether grower, ngociant or buyer. But this doesn't have to be a negative, for the question also arises: should Bordeaux be aiming for a 60-million bottle brand? The French Jacob's Creek is not going to come out of Bordeaux. If it happens at all, it will be through the new concept of Cpages de France, the nationwide varietal brands which are being heavily touted by some of the country's biggest producers. It would give producers more flexibility in blending,' says Allan Sichel. It should also make everyone more comfortable with stricter selection in giving the labelle to appellation wines.' Cpages de France would be the source for the French global brand. It would release huge quantities of varietally-labelled wine, which would make the rest of the world production of popular varietals look tiny in comparison. Even though no decisions have been made on this concept yet, I wouldn't mind betting that a number of boardrooms in the French wine trade have the blueprints drafted and ready to roll, once official approval comes through. In the meantime, successful Bordeaux brands fit into an increasingly well-defined category: medium-sized or small quality products that draw on the region's strengths and reputation, rather than any ability to supply large quantities of fruit for huge volume production. Bordeaux is a great brand, it has a great terroir. We should play with our history, our knowledge and our traditions,' says Ginestet's Delpeuch.