French Resistance

With radical names such as ‘55%’, ‘Oaky Toasty’ and ‘Lynch Box’ – not to mention varietal labelling – perhaps bigger, bolder négociant brands will help to stem Bordeaux’s crisis, says Tom Bruce-Gardyne

Britain is still Bordeaux’s most valuable export market but it has been suffering for some time. This unwelcome news has been slow to sink in. UK trade visitors to the region were met with a pervasive sense of denial until only a few years ago. As ACNielsen tracked the relentless rise of New World wines in the British supermarket over the past decade, many Bordelais simply refused to believe there was a problem. If there was trouble at Tesco, surely it was only a temporary blip for what claims to be “the largest fine wine area in the world”? If news from the market was depressing, perhaps the Australians were massaging the figures, just as President Chirac is said to do with French unemployment stats.

The Bordeaux merchants at the sharp end of the UK market were less complacent. Charles Sichel, export director at Maison Sichel, says he first became aware of problems in the on-trade in the mid-1990s: “You saw first Bordeaux and then France slipping off lists in bars and restaurants. It was like a slow death.” At Yvon Mau, managing director Jean- Francois Mau also realised things were going wrong. “I think we have been blinded by our culture. We thought we could export our ‘drinking with gastronomy’ and we didn’t see brands coming. Thinking of what was happening with beer and mineral water, we thought wine would be an exception,” Mau says. Partly to wake up the industry he organised a series of blind tastings in 1995 that pitched AOC Bordeaux against Australia, New Zealand and Chile. “But no one was really listening,” he says. “People didn’t like bad news.” Besides worldwide demand for Bordeaux was booming then, prices were rising and the wine was in short supply. Crisis? What crisis?

The post-millennial hangover has been vicious. According to the Conseil Interprofessionnel du Vin de Bordeaux (CIVB), UK shipments fell 25% by volume last year and 32% by value. Within Europe, the only major market not to shrink was Belgium, while in the US the value of Bordeaux imports collapsed by over a half. Few are in denial now.

As they say at Alcoholics Anonymous (so I’m told), “accepting there is a problem is the first step to recovery”. If and when it happens for Bordeaux, it will be led by the region’s big brand-owning négociants. Two of the biggest are Castel, and Rothschild, whose Mouton Cadet is the largest brand in Bordeaux, with global sales of 12 million bottles. In 2003 both companies conducted lengthy consumer research. Like others, they were looking to see how best to tweak the style and image of their wines to fit changing tastes. There is a realisation that in markets like the UK the jammy, fruit-driven wines of the new world have now become what Calvet’s Etienne Brault calls the “reference point” for consumers.

Frank Crouzet of Castel says, “The most important thing in the UK is now the brand.” However, he insists the name “Bordeaux” still matters to consumers. “They want a brand tied to an origin. We had to develop a Chablis for the UK and nowhere else,” he says. For Crouzet this proves that British drinkers still believe in AOC wines. Castel which owns the Nicolas chain, gained a greater understanding of the British market when it bought Oddbins in 2003. Last year the company’s main Bordeaux brand sold 500,000 bottles here with a shelf price of £4.99, when not on promotion. At Ginestet, the second biggest négociant after Castel with annual sales of around 30m bottles, the UK is looked after by Dominique Cruse. Like many of his compatriots he is having a torrid time at the hands of the major supermarket buyers who have been reorganising their shelves. “At the moment they are reducing the space for Bordeaux wines,” Cruse says. All too often the region’s loss is the New World’s gain, with the main Australian and Californian brands given yet more prominence. For the French the effect has been to make a bad situation worse. 

No doubt the big buyers claim their motives are simply to give consumers what they want. Not everyone in Bordeaux is convinced, however. Many suspect that the size of the promotional spend the big brand owners are prepared to hand over is equally, if not more, important. The trouble is, the only French-owned brand that has deep enough pockets is Pernod Ricard’s Jacob’s Creek.

“Last year the new world bought the British Christmas,” Mau says, pulling an imaginary chequebook from his pocket. Such an option is beyond the dreams of Bordeaux. Even buying promotional slots on a gondola end, where the really dramatic shifts in volume occur, is too expensive for any individual producer. Despite all this, Mau remains optimistic that Bordeaux brands have the quality and diversity to come back, even if they will never compete with Gallo in volume or budget. As he points out, trends in the market are apt to change. “Six or seven years ago we thought the UK would become totally dominated by own-label. This has not happened.”

Winning formula

Throughout 1998 Mau and his team blind-tasted the competition to try to identify the qualities needed for success in the UK market. “We found we were looking for a wine with fruit, a bit of residual sugar and wood,” he says. Using a base of Merlot and 9,000 new barriques he created Premius, which he reckons could potentially reach 1m bottles in the UK. “It’s not impossible.”

The real pioneer in modern Bordeaux brands, the first since Mouton Cadet in 1930, was Sichel, which launched Sirius on the British market when the new world invasion was in full swing in the late 1980s. Last September Sichel unleashed a red and white Vin de Pays called Renaissance with an RSP of £3.99. Its success at Tesco and elsewhere led to the launch of a £5.99 Bordeaux version of Renaissance at this year’s London International Wine and Spirit Fair.

Meanwhile, Ginestet has just unveiled its French Roots brand, which is based on a similar idea to Renaissance – that of having a range that extends beyond Bordeaux. The project was going to be called French Rooster until it was discovered that Gallo had already registered the name “rooster” in the US. A shelf-price of £6.99 will allow the occasional dip down to £4.99 on promotion.

Getting the price right is clearly critical for Bordeaux. “We don’t believe the new generation of wine drinkers will be interested in what we can produce under £5,” Ginestet’s Dominique Cruse says. David Bolzan, joint MD at Cordier, agrees: “£4.99 will be very tough for Bordeaux. In some vintages you will have the right quality and volume, but fluctuating prices make it chaotic.” This is especially true in the price-point obsessed UK. His own firm has opted to stay out of the mid-price maelstrom with its upmarket Prestige brand, which retails for around £10. Of course, such a price seriously limits sales. For any brand aspiring to shift real volume, the action is packed in around the £5 mark. But this can be hard to maintain given the downward pull of Bordeaux’s bargain basement. According to Charles Sichel, Asda’s cheapest claret was £2.49 until recently. “Can any winemaking region in the world supply anything that is remotely drinkable at those prices?” he splutters, with wide-eyed indignation. “It’s just not possible!”

The reason such loss-making wines exist is simply down to too much supply and not enough demand. According to Jean- Francois Mau, Bordeaux has “never been able to sell regularly more than five million hectolitres a year”. Last year’s harvest came in at 6.6m hl, and at the time there were stocks of 8.3m hl. Of course there is overproduction elsewhere, including Australia, but with four or five corporations controlling 90% of the Australian wine industry, the task of managing the surplus is a lot simpler down under. In Bordeaux there are almost 12,000 registered growers making wine from 120,000ha of vineyards. Today that seems an awful lot, but as recently as 1997 there was a shortage of Bordeaux. In the past decade the area under vine has grown by 15,000ha which, as Mau points out, “is more than the whole of Bergerac or Alsace”.

The CIVB plans to uproot 8,000 to 10,000ha if it can get agreement, but it is a highly political issue. In the meantime the CIVB says it is determined to work more closely with the UK trade and insists the country remains a top priority. Hopefully its efforts below the line will complement what the leading brand-owners are doing above the line. This year Castel will be running a print campaign called French Without the Fuss in newspapers like The Times and Observer and magazines like BBC Good Food and Marie Clare. Frank Crouzet won’t reveal the spend, but says, “It’s a lot of money.” At Cordier the strapline is Irresistible Bordeaux, with a bare-chested hunk holding a bottle and being grappled by a woman from behind. Calvet, meanwhile, has a campaign planned for the autumn aimed at showing younger wine drinkers that Bordeaux represents a stimulating alternative to the New World. Details are being finalised but, according to Brault at Calvet, the adverts will feature a cartoon and the words “Every bottle opens a conversation”.

All this may be small change compared to the multi-million-dollar ad campaigns of Gallo and Blossom Hill, but it does represent a welcome change of direction. In each of the campaigns there is a sense that Bordeaux needs to simplify its message and take itself less seriously. As a brand name Bordeaux has excellent recognition. Throughout the world the B-word means wine. But in the UK it has other connotations as well. According to consumer research commissioned by the CIVB, the image of Bordeaux is quite close to Vin de Pays on one level and very distant and elegant on another.

The impression that Bordeaux is a wine for special occasions stems from the region’s pyramid structure. At the top, the Grand Crus have dominated the fine wine market for as long as anyone can remember. This reinforces an image of quality, but has also been a major distraction for the 95% of Bordeaux that is not a classed growth. The niche, premium end is about appellations and vintages and subtle variations in terroir where demand will always outstrip supply. It is all a million miles from the supermarket world of BOGOFs but it still casts a long shadow.

The négociant brands are different and are slowly getting bolder. The first step has been to break the taboo on varietal labelling. For white Bordeaux this is a wellestablished practice and is considered crucial by Calvet’s Brault: “Not putting the grape variety on the front label means losing nine out of every 10 young consumers.” For red wines, the change is much more recent. Under EU law it is perfectly permissible, yet some believe it is still officially disapproved of; something the CIVB denies.

Some brands have adopted a new world approach. Producta, a grouping of Bordeaux co-operatives with access to 12,000ha, launched its Right Bank range three years ago. The reds were given every treatment from maceration to cool fermentation to enhance fruit and colour to appeal to the UK. At this year’s Vinexpo Producta is unveiling a new, more traditional range called Marquis St Vincent. Meanwhile, Michel Lynch has gone bag-in-box with its so-called Lynch Box, the minimalist design of which is striking.

But the prize for the most radical packaging should go to Vincent Lataste whose 55% and Oaky Toasty were unveiled at this year’s LIWSF. The first refers to the percentage of Merlot, the second to the same wine given six months in new American oak. Both come in a unique square-shouldered bottle with the brand name etched large on the glass. Compared to old-style Bordeaux, which used to promote itself with the CIVB’s corporate bow-tie, it is a real breath of fresh air.