In 2006, Master of Wine Susan McCraith decided to put the en primeur system to the test to find out whether collectors should invest in wine before it’s been bottled. She pre-ordered six magnums of Feytit Clinet and 12 magnums of Chateau Jonqueyres while they were still in the barrel, spending about $383 on the Feytit Clinet, and about $155 on the Jonqueyres. Now that they have been on the market for a few years, the value of these bottles has nearly doubled, with the Feytit Clinet worth at least $580. McCraith’s test was a success in two ways: she proved that the en primeur system can be profitable, and that it makes collecting wine more fun. She explains, “For me, the pleasure was all in having bought these wines as babies, and having nurtured them carefully, and then got so much shared pleasure from them.”
Although McCraith had success with her investments, buying wine en primeur can be risky. En primeur wine is any vintage that’s sold by the winery while it’s still in the barrel. At this stage of the winemaking process, it’s hard to tell whether the wine will turn out to be exceptional, or merely a purchase you regret. When you buy en primeur wine, you’re essentially gambling, hoping for a good outcome.
How Is En Primeur Wine Different from Normal Auctions?
Buying en primeur wine is a lot like buying an idea, rather than a real bottle. Wineries in the top regions like Bordeaux and Burgundy will first tell their distributors and customers how many bottles they expect to have after they harvest and process the grapes. From there, they set aside a certain number of future bottles to sell to their customers as en primeur. For instance, if a winery knows it will have about 10,000 cases worth of wine this year, it might set aside 1,000 of those cases for en primeur. After you pre-order your wine, you need to wait for the bottles to age in the barrel before being bottled, then wait a bit longer for those bottles to ship to you. This process can take as long as four years or more.
By contrast, when you buy wine from trusted auction houses, you rarely have to wait for your bottles to arrive, and you know exactly what you’re buying. By the time the wine has been bottled, critics have a better sense of the wine’s character, and how it will taste 10 or 20 years from now. Although you always know what you’re getting with normal auctions, you will also pay more for your bottles than you would if you purchased them en primeur.
Is Buying En Primeur Wine Worth It?
Since en primeur sales are so risky, most beginning collectors should avoid them unless they have done significant research on the vintage. The main benefit of en primeur sales is that you will almost always make a greater profit if you choose to sell the wine later, especially if you buy vintages that become especially popular on the secondary market. However, not all en primeur sales are inexpensive or profitable. In the mid-2000s, Bordeaux en primeur prices skyrocketed due to a market bubble in China, and as a result, collectors had to pay far more for the wine futures than what they were eventually worth. For instance, a collector might have purchased Bordeaux en primeur for $500 per bottle, only to discover later that the vintage was sub-par, and that collectors weren’t willing to pay more than $500 for that bottle. Collectors in this situation were forced to sell the bottles at a loss, or drink the wine themselves.
Another issue that collectors face with en primeur sales is that early tastings don’t always tell you everything you need to know about the vintage. Because the wine is so young, it’s downright impossible for even the most seasoned of critics to identify important flavor qualities and balance. Instead, many of these critics look at the overall ripeness, acidity, and tannin levels in the wine to decide whether it will age well. To make the most out of an en primeur sale, carefully read early barrel reviews, and look for the three qualities listed above.
En Primeur, Pre-Arrival, or Ex Chateau?
Collectors should only buy en primeur wine if they are willing to risk their entire investment. From the time you pre-order your wine to the time it arrives on your doorstep, any number of problems could arise. The barrel holding your wine could spill, the vintage itself could be flawed, or you could spend more than what the bottle is worth later. However, with great risk comes great reward, so if you’re getting into wine collecting for profit alone, en primeur might be your best choice.
Many beginning collectors have more success with ex-chateau or pre-arrival sales than they do with en primeur. If you like to know exactly what you’re buying, you should go for an ex chateau sale instead. Ex chateau is the opposite of en primeur, in that you buy wine from the winery years after it’s been bottled. You might also consider pre-arrivals as an alternative to en primeur. Pre-arrivals allow you to order wine before it’s been released on the market, but after it’s been bottled. With this type of sale, you can verify that the wine is of high quality, since it’s had the chance to age longer than en primeur wine. As you might expect, buying pre-arrivals is both less risky and less potentially remunerative than buying en primeur.
Whether you are starting your high-end wine collection or adding to an established portfolio, Vinfolio is your partner in buying, selling, and professional storage. Contact us today to get access to the world’s finest wine.