ILPB - Ep Four: Beyond Bordeaux

In the global world of fine wine, so many threads are connected by one single place, La Plas de Vordo. For 800 years La Plas de Vordo's unique trading system has brought the fine wines of Vordo to merchants and collectors around the world. But what was for so long an exclusive local club is now the hub of the international world of fine wine. But despite its huge influence on the world of fine wine today, we don't really know much about La Plas de Vordo. I mean we don't really know what the Plas de Vordo is and what happens behind what appears to be closed doors. The most important and influential wine market place in the world remains shrouded in mystery. How does La Plas work? And maybe more importantly, why? And when does it work? Who's behind it? And who gets to be in the club? And one of the questions that we hear most often from wine makers around the world is, will my wines be successful if they go through the Plas de Vordo? I am Bullen Vigel, co-founder and director of a reneglobal, and after hearing these questions over and over, we decided to explore exactly what La Plas de Vordo is, who the people behind it are, and explore the role that the Plas is likely to play in the future fine wine distribution. And I'm Felicity Carter, the editorial director of a reneglobal. For me, this is a fascinating journey into a place that's growing in importance, but yet remains poorly understood. So come with us as we enter La Plas. Welcome to this full episode of Inside La Plas de Vordo. In this episode, we are going to examine one of the major changes that has happened on the Plas within the last two decades, the opening of the Plas de Vordo to the Beyond Vordo wines. We're going to look at three questions. First, why do estates around the world want to work with the historic institution in La Plas de Vordo? Second, what impact have these wines had on the Plas de Vordo and beyond? And finally, the question is, should fine wine producers look to the Plas de Vordo for distribution? But before we start answering these questions, Felicity, I know you've been looking into the history of how international wines first began appearing in the system, and I'm very interesting to know what you found. OK, so I have access to a database that gives me access to what's been published in newspapers in the last 30 years. So I did a search for La Plas, and I found some interesting things. Now, it's fairly well known that the first Beyond Vordo wine listed was Almaviva, the joint project between Chilean giant Conti-Torre and Baron-Philippe de Ross child of Mujon Ross child fame. Almaviva gained distribution through La Plas in the late 90s, and it was really the power of the Ross child name that allowed that to happen. Similarly, Opus I from California was a co-creation between Robert Mondarvi and Baron-Philippe de Ross child. So it's not surprising that Opus I was the second wine to be listed this time in 2004. Both of these wines had very strong connections with the powerful name in Bordeaux, so they were foreign wines, but they weren't foreign wines. According to Les Ecos newspaper, though, it was really the arrival of Mazzetto, the supertuskin from Italy, in 2009 that kicked off the Beyond Vordo boom, and that the trend has accelerated since 2020. In a sense, this has been following the growth of the international fine wine category. 20 years ago, wines from countries like Chile, Argentina and Australia accounted for less than 1/2 of 1% of the global's, the global's fine wine trade. By 2020, according to that article, it had become 6.2% of the trade on livex, the fine wine exchange in London. Wow, but how much of that growth is attributable to La Plasse? La Plasse is not the only reason. Right? No, well, here's what's really interesting. It looks like the growth and broadening of the international fine wine category, including the expansion of La Plasse, is really due to something else. Airfares. Airfares. Okay, wow, I didn't see that coming. You're going to have to explain that. Okay, so remember we've talked about two key dates in fine wine. There was 1982 when Robert Parker awarded his first 100 points to Patrice and Muton. Yes, and the second one was 2008, when the Hong Kong government dropped duty on wine and created a boom in the Southeast Asian fine wine hub overnight. That's right. But it turns out there's a third date we have to add in, 2010. That's when the world had begun to come out of the global financial crisis of 2008. And businesses in some sectors began to be more confident. But critically, oil was cheap. So airfares were low and both business travelers and tourists of all income levels took to traveling. That year, global passenger traveling jumped by nearly 9%. Yeah, I think that's also the year why you know, discovered Airbnb and all of those kind of things. That's right. So I can see the impact on international tourism, but you're going to have to tell me what that has to do with fine wine. Well, first of all, it did have an impact on international tourism and on wine tourism in particular, which really begins to expand at this point. But you're right. That's not fine wine. But when people were traveling, particularly business travelers, they found that fine dining culture was on the up. And so more people had a better food wine experience when they traveled. And so people began to want to have those same wines when they got home. Now, this is the same period, believe it or not, when even the French market began to open up to wines from outside France. By 2016, the French were drinking 30 million bottles of foreign wines, which would have been unthinkable even 20 years earlier. And these weren't cheap wines either. There's echo specifically said that it was from executives looking for some of the high end wines that drunk overseas. Well, I guess the point being people were opening to new things, right? They were discovering premium wines from elsewhere and new markets were opening up. That's right. So there was a greater need for distribution expertise globally. Now, to be clear, I'm not saying this is the only thing behind Laplace accepting international wines, just that their expert network was clearly poised to take advantage of a trend that was already underway. Well, yeah, that's fascinating. And that's actually also something I want to come back to later in this episode. OK, so I think the next thing we should ask is what's the situation right now? Well, and get you asked because while you've been reading all newspapers, I've been diving into Jane's Anson tasting report. And Jane might be one of the only person to taste all the beyond border wines because of course, they're the ones they are distributing, but not the ones that are the negotiating are distributing all the time. So the reports have fantastic source of information and I strongly suggest to everybody to go and see them. We'll put all the links and the show notes if you are interested in that question of the beyond border wines. But just to recap, the beyond border wines are only released in bottles and twice a year. So the biggest campaign is in September and the smaller one yet growing in the port is in March. So when you look at Jane's report, if we combine the September 2023 release plus the March 2024 release, I counting them all, I counted them all and there were 186 labels of beyond border wines. And those wines were coming from 11 different countries with 146 threads, 34 whites, which was a bit of a surprise for me. Five champagne and one rose, if you can see that. But another very surprising fact was that two years ago, Jane tasted 109 wines. So it went from 186 into years. If you do the math, and if I'm correct, because not my forte, but that's a 70% increase in two years. And I also wanted to see, I was also wondering if all those wines were made of a cabine and border grape variety. My question was, do you have to taste like border to be distributed by border? And of course, there are a lot of those wines and a lot within the original release that you mentioned earlier. But there's more and more diversity of grape variety as well. We presented the beyond border wines with Pinanoia, Chardonnay, Sihar and other grape varieties as well. With Felicity a question for you, what countries would you say represent the most of the beyond border wines? Well, I'm going to guess Italy because of Tuscany and the Super Tuscans. And my second choice would be the US. Well, well done. Italy is certainly the highest step of the podium. Italy has 64 wines represented through the blasts. So a bit more than a surge. But my biggest surprise, actually, France was number two with 37 wines. So including, of course, the five champagne we mentioned earlier, because of course champagne is always just made in France. And wines from Bergen, also, since September 2023. So 20% of the beyond border wines are French wine. In the US, as you mentioned, very big country to number three with 27 wines going through the blasts and Chile right after it at the force position with 19 wines. Oh, OK. I should have guessed France, of course. It makes sense that champagne and so on would want to take advantage of a French network. And of course, they already had very strong brands. Yeah, but you know, sometimes border and burgundy don't really like themselves. But the very strong brands is a very important point, because again, just as a reminder, the wines of Bordeaux have always been distributed through Laplace. So to a large extent, their story, the success of their brand is very much linked and dependent on the success of Laplace. So they are really co-dependent. And it might be changing. and some will say that it has already started to change. But until now, you know, estates and Laplace and they go as yarn or tear, they are, they are two side of the same coin. And that's not the case with the Biong Bordeaux wines because they had their own entity before the plus. They existed before. They had the distribution system before they moved onto Laplace. And what was really one of my major takeaway, you know, going in-depth since you changed reports is that, and that's my own, you know, personal read of that. But there are two categories of Biong Bordeaux wines to me. I've seen the one that I've called, you know, the original ones or the ones that I knew before doing this podcast, if you will. So the wines that are extremely well known that had built desirability for the brand outside of the plus system, this fall going through the plows. And so we're quite logically desirable to the negotiator. Let's hear Philip Newly. Who's the second category? Or do you want to have the second category first? All right, well, the second category, I was really surprised at was the wines that I'd never heard of and the number of wines that have achieved the rather low rating by Jane Ensen. And that was-- And we're definitely going to have to talk about this shortly. Yeah, that was fascinating to discover, you know, for me. And there are many reasons to justify, right? You're not the presence of this wines on the plows. We'll come back to it because I really want us to listen to Philip Newly. So Philip, at the time of the interview, was the fine wine buyer for wine.com in the US. And he summarized really well the interest of the iconic American wines to go through the system of the plows. Well, I think one of the main thing that's taken place has been layering on of other wines from other places. And it started off with fairly high-end brands that were looking to expand their distribution. By high-end, it's sort of luxury-priced brands. And we saw some of the Californians at the icon level. They were approached by a few of the major negotiations in concert, which is kind of interesting. The negotiations intelligently said, all right, we'll get together and offer this opportunity to these brands so that they don't feel like they're locked in with just one of us. But they'll feel like they have some breadth of distribution. And so that's certainly, if you speak to folks in the world of Napa, Sonoma, that's certainly opened a wonderful opportunity for them because they trust the ability of these professional negotiations to get their wines into the right hands in places where they may not normally have been expanding their reach. But also as agents that can vet the importing partners in those new countries, which is for a producer of luxury wines, maybe not the thing that they really want to focus on, doing all of the nitty-gritty background work to vet importers in however many countries. It acts, in essence, there are agents who create a distribution opportunity, but also create it in such a way that the supplier has a fairly high level of confidence that the bottles will make it to market in their end markets in good condition and through channels that are reputable. OK, so this is fascinating. If these wines have already achieved a high level of success, what's it for them? Why do they want to go through the plus? Well, that's a good question. Philip touched base on some of those points, but I guess to go from a local level of success to an international one or to accelerate the international presence, I would say. So they already had something that was working, but the blast accelerated everything and they made it possible in less years. One thing that I also have seen as a major reason is status. To see it next to wines that wineries have admired and might have served as an inspiration for them growing up. And you know, if it is to you and I, we spend quite a lot of time defining what fine wine is. And in this instance, I think it's particularly fascinating to see that the distribution itself can be seen as part of what makes you find it. Because you're going through the blast that you can be seen as fine wine. Because you were, you know, you entering the club of the top wines of the world. And as an illustration and Lacka's now to listen to Deer Drey Taylor, who was at the time of the interview, again, the sales and marketing director at Canon Cop in South Africa. So some of you might never have heard of Canon Cop. Some of you know them already, but they have been recognized consistently in the 15 most admired wine brands in the world. And we met with Deer Drey quite a long time ago when we were first thinking, you and I about doing the podcast on the plus. Oh my goodness, that's right. July 2023, which just shows you how long we've been thinking about this. Yeah, we brew that for quite a long time. And at that time, exactly Canon Cop had just been approached by Kufte Anna Blanc to discuss the possibility to propose their wines on the Blanc. And let's listen to Deer Drey's reaction to that email. The plus is a system was, it's something we'd always known about. A concept we were aware of. We knew very little about it. We knew it was an incredible, it was elite. It was brilliant. It afforded people the opportunity to be surrounded by the most incredible wines around the world, but it was so far away from our everyday and what we were used to and what we considered as possible really. And possibly for a while, we were quite surprised that somebody thought as worthy of being included. I think that was the most amazing thing by that email like, wow, they would consider us. If we are successfully launched on the plus, what it means to us, it's not only about Canon Cop when the reputation of Canon Cop. This of course, that's part of it. But if you are on the top end of your industry, and the South African industry is one that's going through a really, really difficult stage and it has been for a number of years, things are not easy here. You feel a added responsibility for doing things to benefit the rest of the industry. Now saying that Johannes being a part of, he was the head of wines of South Africa for many years, he was the head of the Selmerch wine Reads for many years, Arbides on the Pineda Tars Association, I'm on the cab association. So we are part of a lot of industry associations and bodies to help the rest of the industry. So the benefit to South Africa and the benefit to Selmerch would be amazing. And then off course, to be able to do it successfully with Pineda Tars, which is the only real indigenous grape variety we have, it's brave, I know it is. Yes, it's our own. So tell me what happened in the end. Will Cannon Cop go through the plus? Yes, they will. Second South African wine to go through the blouse after Van der Ponstance. But the first Pineda Tars to go through the blouse. First Pineda Tars, well. Yeah, we're talking about diversity of grape variety and here is Pineda Tars' end to bring the blouse. In the next September release, we wish them all good luck of course. So to go back to your original question, why would a state, high end demand wines, would like to go through the plus status of course and again the very powerful distribution system. Well listen now to Ton Porte, who's the co-founder of International First Growth, a courtier agency specialising Australian top wines going through the plus and eastern Marais everything Bratz. Why the plus alone? Yeah, it's a great question. Particularly the Australian New Zealand context because we have so many, I guess, traders so out of like I'm in the southeast Asian trading companies that are very technical and strategically very sound ways of doing business. But Le Plasse is probably the one truly global network, certainly dealing with the greatest wines unquestionably and wines that have a long history and track record of delivering to the customers and consumers that get to enjoy them. So the opening, by going to the plus you're really opening many, many more markets and you're accessing markets that you might not otherwise be able to do from this side of the world and obviously I'm in Victoria Australia so I'm not, it's not easy to get to places that the plastic. but really that is the expertise of Laplace. Years and years of developing markets. So they really have wrapped themselves around the world like nobody else. So of course, Laplace is a super powerful distribution network. But we were wondering when we were exploring the definition of fine wine, does the distribution network actually gives you the status of fine wine? When you convince a wine or each come with you through Laplace, do they go mostly for distribution or do they go mostly for that type of aura, status, the world compete with the best in the world? What's the biggest motivation to go through Laplace? Yeah, I think initially produces are most indeed to the recognition that comes with being on Laplace. It's somewhat the danger with that is that you become a flesh in the pan and your inaugural release gives you the articles and the interest and the reviews that you're looking for. But this is where the role of Portier and I'm sure we'll get into the role of Portier is probably, or at least I don't want to say we're probably more a broker than a Portier and an agency where it's a long term. The negotiations we work with are looking for decade long partnerships. So the recognition is fine in year one, but really everything is geared towards what we're doing years five to 10. And that's quality distribution and quality relationships with the clients of the negotiations, the customers and the key buyers that they consider important is, is really stage two of. The whole process, but it's actually the core of what matters. It's the quality of the distribution that you're getting from Laplace is really what makes it special. So one thing you're not clear on is if you get distributed through the plus, do you get all of your wines distributed or do they only take some wines? Well, Laplace is supposedly only distributing fine wine. So I guess it would depends on how you portfolio brand is built in the case of Canon cop, for example, they will only go with one wine through the blouse. But let's ask that question directly to the negotiator. So here is Matthew sat on your head of the city vision. Being committed is always a good ingredient to success. So you cannot spread commitment to thin so yes, if you work through Laplace, you do want to work 100% through Laplace much the same way that if you have direct distributor in Germany, you will not convince them that you are the right partner for them. If you say, well, I'm going to sell most of my wines to Germany through you, but I know a lot of restaurants and I'm going to sell direct to them. If you choose a system, you have to be committed to this system because if you're not, you're not going to invest the right resources to make it work and it will not. It seems it seems that there would be a difference between my French estate and my Italian wines, right? Is the beyond border wine that usually don't have the full production through the plus? Yes, I know if you have a winery in Tuscany, the plus the burdo will not be able to do a better job than you will in selling your wines in Italy. So yes, the domestic market is a market you should retain, but other than that, you want to look at it committing your entire export production to Laplace. So typically domestic market is usually retained by the winery and it makes a lot of sense. And sometimes there are very special geographic agreements for instance, a wine like Masetto, we do not sell in the US, but it's binary. They sell in the US or we sell in the US, but it's not both of us. So the rationale is wherever you sell with Laplace is 100% through Laplace. So here's a question. Why are negotiations interested in beyond burdo wines? Yeah, because we've just seen why estates will want to go through the system, but why negotiate those wines? Well, we've heard many different opinions on this one. And as we've seen before, there is always different perspective to having burdo and also remember it will do later with my read at this, there's two different categories of wines. So let's focus on the first category of wines, which are, you know, to me, the icons. That's where you will find all the Nia, Arlen, you know, Opus 1 and etc. So it's kind of easy to see why the negotiable would want to work with this wines. To me, there are two benefits. The first one is almost an intellectual or philosophical one. But if your own negotiable, it can give you a supleasure or satisfaction to trade with the best wines in the world and to help them accelerate their growth. So you're taking something of beauty and you make them, you know, better distributed and you make them accessible to a whole range of different customers. And they are in burdo people who care deeply and genuinely about wine. So I guess we should underestimate that will to elevate the notion of excellence. Yes, I mean, I think it's been really obvious to us in many of the arena events at how much pleasure people who work in fine wine or any category of wine really get from meeting their colleagues from, you know, other places in the world. It's a genuine sort of great pleasure for people to have those conversations. And then of course you can also look at the practical thing, which is the cash flow money, right? Because these wines are high in demand and again, they are only delivered as we've heard so only in bottles they are ready to sell now. Once they're, you know, they're arriving burdo. So there's no need to wait for two years like now, I'm trying to buy and to cash in on the sales. So in a difficult context, easy money is always welcome. I suppose so maybe the icon wines are pretty obvious. But let's talk about the other wines. Yeah, that's right. So that's that's where I was really surprised, right? Really astonished myself discovering some of those wines on the class. As mentioned, Bergen de Yen did the class in September 2023 and I thought, well, I'm going to see names, you know, that the world will recognize and, you know, they will scream fame and everything. But no amongst the first Bergen de Yen is distributed where you know, something is the marriage and show a little bit of an appellation. So to be totally honest with you, that's not what I think of when I think about fine wine from Bergen de Yen. I come from an amount of so I see that with all the love and respect that I have for this region. Do you think maybe the negotiants are just hedging their bets? I mean, we've seen so much, you know, fire and drama in the Bergen de Yen. We have seen, you know, less of villages and stuff elevated. Do you think they're just hoping the wines will appreciate it? Yeah, maybe except there are also wines from Limor, for example. Okay. And this left me quite speechless and I will have to dig out deep around that. But wines from the Eel de France region, so around Paris, not a famous region. It's all something that sounds like a quirky, revival vine project, which is of course very interested in its own. But why through the class? Most of these wines scored under 90 points in James report. So if the classes are supposed to distribute famous wines, but those wines are not known yet and they do not have high scores by international critics. That's when you can start questioning the presence of those on those wines on the plaster. I tried to come up with several explanation for this wine being being here. Most of all, maybe these wines are called in their own niche market and the only reason that I don't know about them is because I don't know everything and must have missed something and they might have a big distribution in the market that I know very little of. And the second reason probably is that also they have been picked up by negotiable who are maybe more followers and because they can't access the top wines. Well, they didn't want to miss the boats, they took on, you know, other wines. It's a risk. It's a risk. It sounds like they're going to risk a lot. All right. So does it work the other way around? Are there examples of top estates that don't want to be listed through the plus? I love this question and I've asked it a lot to some of the top estates. I had the privilege to visit recently. And one of the best person to start answering this question might be Matthew Julien. Matthew is at the head of Van der Exception, the RVMH entity that manages Sheval Blanc and Ikem Bordeaux. We'd also domain de l'amre in Burgundy and Colgyn in California. So Matthew technically deals with four different distribution system because Sheval goes through the plus and on primer. Ikem does go through the plus, but it's not released on primer. Colgyn is mostly sold direct consumers and domain de l'amre goes through a classic distribution system with exclusive importers and distributors around the world. So I asked Matthew about the benefits and the limitation of each system. Let's see what he has to say. If you had to take your four distribution system, what would you say are the pros and cons of each of them? Well, it's the pros and cons of Monopoly versus open market. So he should interest the distribution to someone specific. He creates kind of a double way. dependency because you grow, especially with personal relationship, but even without the personal relationship element, you can grow more and more comfortable in the relationship. And there is this saying in the trade that the exclusive distribution rights for DRC doesn't compel you to work harder for the estate. So I'm not saying that there is not enough effort going into that distribution, but it can lead to complacency while the open market distribution by its own nature can also, so can be very dynamic and always exploring new avenues and new clients and that, but can also on the downside destroy some of the value. So a very French answer, they are good thing and bad thing in every system and you have to ponder everything and choose, but a couple of additional answers that I've heard on, you know, why some of the wines I thought could be pretenders for the glass were not on the glass. The first answer was, well, we don't have the volume to go through the glass. So this, this idea of scale that to go through the glass means to have scale and that's the reason why border also needed help with their distribution is because they have a chocolate wine to sell. This is, I can ponder that reason because some of the, you know, new really sound the glass is well, Berliner and Tlaubberst in Australia and will has, you know, a handful of wines to sell through the glass and it's quite successful from around here, so scale is not everything. The second reason that I've heard is, you know, I've asked that question to a very famous Spanish wine that I thought could be interested by the glass and they said no because we have had an aggressive price strategy. We wanted to raise the price quite aggressively in five years and the plus, you know, didn't really want that because the glass likes progression, not explosion. And my favorite answer came from a top estate in Burgundy and the gentleman told me, well, we do not sell our wines through the glass because it is not our culture. And that made me think, it really hit me at the moment is that, you know, Tervoir is not just about wine making, it's also about wine selling and the way you sell. And just like there is a heritage to vine culture with practices that make sense through time locally, it's still the same with distribution. You tend to trade with the people that you know and trust through system that you know and trust. And, you know, Vannex, Vannexibson is the perfect example, you know, border goes through the glass, Burgundy goes through distributors and call again being an American sales direct. And so I'm not saying that it will be fixed, you know, forever. You can bet that an iconic Burgundy wine will end up at some point on the glass, but one shouldn't underestimate the extent of Tervoir and culture when it comes to distribution. Yeah, and that makes sense. I mean, one thing I've learned from living in Europe is that people here really hesitate to burn relationships because they think long term, you know, that person that they have a feud with today could mean that their descendants are feeding together in three centuries time. Yeah. And you know, for many people it would be an active unforgivable disloyalty to suddenly burn a long-standing distribution relationship in favor of somebody else. But just another point you made, the aggressive price strategy, that's also very European. You know, I remember talking to a New Zealand producer who was selling their wines in Germany. And the wines caught fire, you know, they were just flying off the shelf. And in most markets, distributors are absolutely thrilled with something like that. But the German distributors was very unhappy about it because what they want to see is slow steady growth. The idea being that, you know, one, explosive growth attracts competitors. But two, explosive growth is not sustainable. And it can be a sign that something is going to burn itself out. So it's very interesting. And it's somehow linked to the vision of fine wine. Or at least maybe they European vision of fine wine, but it is extremely linked to consistency and consistency is through time. You can only be seen as fine as if you've proven, you know, your capacity to maintain that consistency over decades, I think, you know, live exit 30 years. So it's not overnight that you become there. So people are really looking, you know, there's sometimes worried about things that go too fast for sure. Yeah, it's so interesting. All right, so let's turn to the impact of the Beyond Bordeaux wines on Bordeaux itself. What have you heard about this? That's a fascinating question indeed. But before we get into it, I just want to take a second to ask a favour to everyone listening to the podcast right now. If you like what you've heard so far, please do subscribe to the Rini podcast channel on any of the platforms that you are listening this episode on and give us a cool rating. It really helps. And when we say give us a cool rating, what we mean is please give us five stars. Five stars please. So when we invite in this podcast, Felicity, I knew that we would find very different opinions and views on the Laplace system because you and I we've heard about people giving them advice on the plus and everyone has a different opinion. But I must say that the topic of the Beyond Bordeaux wine is certainly one of the most dividing and considering the growth of the category against 70% in two years. It's not surprising to find that a lot of people are unsettled to say the least. But let's explore some of the impacts that the Bordeaux wines, the Beyond Bordeaux wines already have had on the plus and beyond. I think one of those first impact is they have pushed Bordeaux to be better. I think it's fair to say that they have and notably the first wave of the American wines and opuses often quoted in particular that they've changed the way the plus does business. You remember Felicity about all the data that, you know, now the Chateau Hanne access that they have been demanding to some extent, it's been pushed by the Americans that had a totally different way of doing business that the French had. So the answer to the plots with the demand of like business practices and they changed that and they challenged the French to adapt to that and it's been very positive for everyone. But Felicity, you've talked about it with Matthew Schedler-Wenier. So let's hear your conversation on that topic. So there's huge excitement now in the new world about the possibility of access to the plus. How has the plus changed as a result of the influx of the new world and Italy and other countries? I think probably the first thing that has changed is sometimes when you have something that you've always had, you lack the perspective to understand the value of it and having producers from many different countries and regions and top producers through a very rigorous and thorough analytical process decide that the best way forward for them was Laplace. I think informed everyone in Bordeaux and some of the places of the unsung merits of open markets for the distribution of fine wines. So the first thing that changed I think was really to help everyone realize the value of the system. 20 years ago some people called the system Archaic and now there is, as you said, many, I mean a great number of producers who want to work with the system precisely because Archaic it is not. But it took that to understand the value and as we understand the value and the merits of it, I think we can also improve those. So this is probably the most defining change that has happened to Laplace. It's not very tangible but it's extremely real. Another change is Laplace used to be structured around the entrepreneur campaign. Well now we have two and almost three campaigns. We have the entrepreneur which remains the main campaign but we have the September campaign with wines from mostly from beyond Bordeaux not only and there is also a campaign in March with wines from Bordeaux, Latour and Ikem who released a new vintage in March and a flurry of wines from beyond Bordeaux including from Monterey and Ornelaia. That's fascinating. Do you think there have been changes in other ways like the data collection for example, the digitalisation. Has that been more rapid because of this growth and particularly the outside voices or would it have happened anyway? It was happening. It has been accelerated. I mean it has enriched and enhanced the collective experience and yes we have worked with people with different distribution backgrounds so we learned from them as they learned from us and in the end yes some it helped accelerate the adoption of data sharing and to understand the value of it and how this could help work better together. Yeah it's interesting. We also had a conversation with Ron and LaBorde. The the prayer. President of the Union, they're called crew de Bordeaux. And with him, we debated about whether or not the beyond Bordeaux wines shifted the negotiations away from their expertise. So let's hear what he has to say. How do those wines from Italy, California, everywhere? What kind of opportunity and challenge do they create for you? Well, those wines, they create attractions because they increase the portfolios of our customers or exclusive customers who are the Bordeaux wine merchants. The fear is for us as a president of the Union de Concretes or a producer is that there used to be a few and now there are far more wines from our side Bordeaux that are coming into the system. I think if I'm not too wrong, in September for the Orre Bordeaux campaign in September, they were close to 200. So that's a lot of other wines from Bordeaux to take care. So it takes of the attention to the care from Bordeaux to the beneficial of other wine producers outside of Bordeaux. And questioning on the DNA, what makes also the Bordeaux wine merchants special is not the fact that they were located in Bordeaux is that they were very close from the producers in Bordeaux. So they had a certain know-how and they could give advices to the wine merchants all over the world on the climate in Bordeaux, the taste of the wines. And if they have less attention to what's going on into Bordeaux and they give more attention to elsewhere, they will be. Orre Solon, we say in French, they will be less connected with the production in Bordeaux and not to be compared as companies that are not based in Bordeaux, but just fine wine merchants. Yeah, in a way, it's going from specialised negotiate just another fine wine merchant, I guess. I guess I could see that happening too, yeah, that makes sense. And what we've also heard is that when the gocees are by more beyond Bordeaux wines, well, they have quite logically less money for Bordeaux wines. So listen to what Jane Austen said about this. So I think as with so much about the placerate negatives and their positives, I'm going to actually start with the negative because they really think it's very important. We've worked out this system of how the goceesions have to buy from the chateau and in many ways, the only clients for the chateau are the goceeions. And I think that's so crucial to understanding the ludicrous prices and why chateau continue to get prices wrong. And they don't mean all prices are ludicrous. I mean, this situation where they don't respond as quickly as we'd like them to. Often that's because in their minds, the wine just has to go as far as the negotiate. So if we think about that in terms of the external wines, here's your chateau whose release wines at a high price, the negotiants have bought what they have to do to keep their allocation. At the same time, you have all of these big international wines coming in. Again, the negotiants buys those because they see that as being potential to make money. Great. But let's say 50% of those international wines don't sell through immediately. The negotiants have to hold on to that stock. Same thing, they're buying expensive wine from the chateau. It's not all going to sell through because the chateau is selling at a very high price. So let's say again, they're holding on to 50%. That means that there's less liquidity in the market for the negotiants to then do what they traditionally did, which was by Crou Bourgeois, which was by those lower level classified to add to millions, and also to buy the graph wines and all of these things which traditionally the negotiants would have bought much more of. So what happened? There's a problem, those smaller chateau struggle massively to get money because they're not used to selling direct to consumers because they've been used to selling through negotiations. All of a sudden the negotiants have less liquidity out there to buy. It's really been dramatic, particularly for Crou Bourgeois. Their wines at a good price, often really good quality and they're having harder and harder time being bought by negotiants. And so they've got to quickly pivot and find different routes to market at that proving to be very complicated. And here I have two ponders, Jane arguments slightly because we've asked that question to many negotiants and courtiers and we've been told many times and you will remember that from our latest podcast with Matieu Chadronnier, the latest episode when he said that the beyond border in their wines and our 20% of the city of business, but they have been done, those 20% are on top of everything else that they do and that they were very clear that it did not replace border transactions and we've heard that many times. So I guess it depends on the negotiating. Yeah, it depends. Felicity, you are turning French, do you? That's right. You finally convinced me to think about it a little bit of nuance. How did you do it following? But anyway, what about the buyers? What are their visions and opinions and all of this? Well, and a lot of the buyers and importers that we talk to are still pondering whether or not the recent development will be positive in the short and long term. So you also have to remember that the importers and buyers that we talked to, they had the distribution of those wines before and now they have to go through the class. So of course, they are worrying about many things, but one being the access to those high demand wine, do the fact that those wines go through the class change their access. Let's listen to Max Lundrelle, who is the fine wine buyer from Foul Berry Brossenberg here in London. And what about the beyond border wines? Did they, did their arrival change anything or play a bit in that? I'm still undecided on the beyond border, I think, because from a, so I can see it from the winery point of view, I can see it from the Nighossian point of view. And I can see it from a far afield merchant in a mail of nowhere. Yeah. He has access to this brand. So if you buy from three Nighossian in Bordeaux and you are a merchant in Belgium and you're a small retailer and you buy from three Nighossian in Bordeaux and before you never had access to some of these Argentine wines or Confonian wines because you don't have the time to travel and that's not really your business. Then having access to these wines where you can buy just two cases that you put onto a parrot of other border wines that you have so making your shipping more efficient, then I understand it's logical. For us it's, it's far less logical because we already spend a huge amount of time in, you know, and you had access to these wines that you have access to. So a par from a few, I would say up to about 100 wines that are released in September beyond Bordeaux. I would say that we successfully do 20 of them. But out of the 20 we already had probably 10 or 15 or access to 10 or 15 so maybe we gain fine that, you know, we had no access or not to the same level before. And also, you know, going back to margin for us it is impacting margin because, you know, in pencils, for example, I'm arguing to the class today in Penfold, we were the biggest distributors in Penfold in the kind of the icon pencils in Europe and, incidentally, margins being eroded by having to buy from the class when we had very good access before. So there's some good and some bad. But isn't that the same thing that you were explaining me at the beginning that in some aspect it's good because then you don't have to buy every year to be afraid to use your allocation and that doesn't work. Or within a brand, you know, it's a, it's very likely that we will buy less Penfold than we have in the past. Okay. Well, and you will also probably will have access to less because they will go through the capitalarity system and they will use also. Yeah. In the opposite example is Maseto, for example, so Maseto had a distribution that had an important, you say, and every year we used to get maybe for a lucky 36 bottles on Maseto. And then obviously they went to the past system and then we have one of the biggest allocation of Maseto there is. So, you know, there's the good and the bad. But I don't think there is space for a hundred of them. I think there's for respace for 30 of them. But let's go back to talking about one of my favorite topics, money. We know that the plus is very focused on increasing the profitability of the wines that distribute. Does this mean you think that the beyond-border wines are also going to end up being more expensive in the markets where they will already distribute it? Well, I'm tempted to see yes here because of course, but of course it will depend on a case by case basis. have a winery continue to support or not the Hestia Wreck distributors. But listen, - I've just listened to Jeremy Stockman, who's a general manager for Watson Wines in Hong Kong. - Yeah, it depends on where you were buying it before. If it was producer X that, and it's happened to me a few times, it was producer X, I was buying direct shipping myself, where did it went to the class? Yes, absolutely, it's more expensive because if they're releasing it at roughly the same price, then you've got the negotiate margin. And I'm not disputing the right, but it means that it's more expensive. - Well, does it happen that some estate actually cut the margin when they went through the class because then they would end up having the same price at the end? - No, I'll never see that. - So again, Felicity, one of the biggest impacts that the Beyond Border Wines is having at the moment on buyers and importers is that it leaves them confused. And here is Philip Nulin, who was at the time of the interview, again, the buyers with fine wine don't come in the US. And he explains to us that the release calendar, the September and the March dates, makes very little sense for them in the US market. He's why. - In general, I would say is that as a buyer, I find that perhaps now in this rush to bring on more business, there are players, there are negotiations who are grabbing its straws, trying to get a wine from here, a wine from there that may not have that much of a reputation, but they feel the need, at least this is my perception, they feel the need that in order to compete with their fellow negotials, they need to have a portfolio of products. And so I think personally, I find that the September release program has become a little bit of a distraction because it's no longer a tight group of wines that I would be interested in sourcing. Perentices, there are wines that I would be interested in sourcing that are excluded from the US market because US suppliers don't want the plasks to sell it back to the US market. But the overarching point that I was making is, the portfolio of offerings now from the plasks has gotten to be so large that it becomes a little bit noisy. And then the other thing is the timing of releases in September does not work for the US market. For the simple reason that we will not be able to get the wines in physically for the busiest time of year. Can we pre-sell the wines? Yes, we can pre-sell the wines. But would we rather be able to have the wines in physical stock? Yes. So September, and this might be a minor detail, but it's not necessarily the best time for us. So now we've covered all of that. I'd like us to return to what we were talking about at the beginning, which is about the development of the fine wine category. And this is where Matthew Shadronnier had something really interesting to say. As a category, fine wine has changed dramatically. It burst in the last 20, 25 years, and even more so in the last five years. In the last 20, 25 years, I think fine wine has evolved from being defined by region to being a standalone category. In the old days, wine was structured by region of production. And in each region, you would have a pyramid. But the entry point was more the region than it was the category of wine within the region. And to put it simply, an easy example is, if you look at Opus I and Muton Rochil and Muton Kadeh, probably in the old days, it was tempting to say that there was probably more in common between Muton Kadeh and Muton Rochil. I'm speaking maybe the early 80s. Today, it is extremely obvious that there is much more in common between Muton Rochil and Opus I than there is between Muton Rochil and Muton Kadeh. But one reason, which is that Opus I and Muton Rochil address the same consumer. And the fine wine consumer today is a fine wine consumer regardless of the country where the wine is being produced and the appeal of traveling with wine from Oakville to Mendoza to the Apalta in the Kolchagwa Valley to Proyac and to Melbourne is irresistible. So fine wine has become a truly cross-regional category. - Yeah, and so what Matiu is describing is something that somehow motivated also us at the creation of a reneglobal, that realization that fine wine was becoming something of a super regional category and that we needed a place for these producers that might have more in common with like, might in people from the other side of the world than with the neighbors down the streets that was setting the same last office for euros. So my personal take is that the glass has really facilitated this. They did not create that movement, but by trying together all the best wines of the world in one place, they've accelerated it. - Yeah, I think it's pretty clear that Laplace was perfectly placed to take advantage of a trend that was already clearly happening. - Yeah, and if you allow me a bit of philosophy here, there is almost an ironic side effect or a risk for an ironic side effect here, because the risk of traveling with wine from Ogville to Mendoza is that you might forget the other wines waiting for you at home. So there might not be as brilliant or shiny, but they are part of your community and your collective identity. And remember Felicity in the last white paper that we published on the definition of fine wine, we've asked that question, can you be fine alone? And the answer was clearly no, you can't. You can't be fine alone. The collective identity and reputation matters enormously. And so the risk is that you end up in a situation where the wines that are supposed to be the most the Juan focused, the reflection of the place where they come from. Well, this wines are not invested anymore in the local economy because they start looking outward exclusively and you end up with situation like in Bordeaux to some extent where there are almost no communication between the top and the bottom of the pyramid. But people forget that the top of the pyramid can be quite windy and unstable when the base is not solid or grounded. - Yeah, something that you and I occasionally talk about is the way that the fine wine category follows other economic trends. And one of those is the emergence of a global class of powerful people who have multiple residences around the world. And they choose to be headquartered basically wherever they'll get the best tax advantage. British Prime Minister Theresa May famously called them citizens of nowhere and they have more in common with each other than they do with the ordinary citizens of the countries they come from. What I find very interesting when I think about this is how many people I know who are expats involved in the wine industry who have moved to France originally and they go really native. They're completely into the whole authenticity and terror. And yet of course, you know, they're out of their own place. It's interesting. - Yeah, just like I'm sure the city is in a no way by historic houses in the country where they choose to live. Yeah, citizens of nowhere. I love that concept. Oh, speaking of somewhere, I forgot to ask, where are the Biong Bordeaux wines kept? Where are they stocked? - Well, the Biong Bordeaux wines are centralised in Bordeaux warehouse, in the Nicarossians warehouse in Bordeaux to be consolidated with other orders and then sent back to the world. And so that brings a question about the sustainability of the logistical chain. So we've talked about the impact that the Bordeaux wines, the Biong Bordeaux wines have had on Bordeaux. I think they are going to, they are ongoing questions about what are they going to change in logistical change. So for example, we had the chance to discuss with one of the major fine wine in Portugal in Japan a few months back for our market reports on the fine wine consumer there. And it was really adamant, buying wines from the plas was absolutely not a problem for him, but he had an issue with the wines all having to transit through a plas. He took the example of Opus I, of which it was literally buying full containers of and his stake that I'm sure many would agree with is that today. Well, well, having wines travelling from California to Bordeaux only to go from Bordeaux to Japan a few weeks later doesn't make a lot of sense and it's not really environmentally friendly. Final question, should more producers consider being distributed through the plas? Well, that's a tough question. So I'm not going to take that one. Let's see what Jeremy's document thinks about this. We've had several occasions where we would be exclusive import of it by something that's off the plas. And you know, how that's been. and there it's a lot with it, dude, so I do, I have heard some producers come to me and say, this is the presentation they got and the reality is quite different. And I think that as I've mentioned before, if we had a, let's say a little while, white wine is very popular with foreign restaurants at the moment, is that move sort of a blast because it's a famous brand? How does that then get supported in restaurants? How does that brand then still get this exposure? If it's open one and it's a very fine white but it's traded commodity, that's worth it. But if you're reliant on your white beer show in great restaurants and big toys about boats, maybe you need an important, we are the agents who are going to come to it. When I go there in two weeks, I will present to them every bottle of every restaurant that we represent a white. So it is, we do a lot of that kind of work and we'll be rewarded for it. So once you move something onto the class, I think all of that's good. When it moves, having an exclusive importer that was doing a good job, not necessarily after something to do in good job, they establish a price point and they establish support for it as we are. Once you go on the class, the risk is, especially in Asia, that a trader can take a negotiated price list at 5% and then just advertise it. And what we saw in certain brands is that the price being traded was 20-30% below where it was established. So we did see some price crashing on some brats when it took advice. But why would they. So it would be the negotiable's job than not to sell to the traders. But they need sales. They won't say. And some extent, why would they. Yeah, okay. And that comes back to what is the role of a negotiator. A negotiator is a boxman. That's their job. And I love the negotiator. They've got nothing negative to say, but that is their role. And a negotiator. I think normally we'll tell you, we are not branded. And of course, before giving you my own takeaway, I wanted to understand if the negotiator was thinking the same way. So here is a matter of shadow and new stake. So the blast is not really good at building brands. Is that still true? What's the difference between a distributor and a brand builder? I think it's hard to answer this question as you ask it. I will say this. Going from 0 to 1 is something only the founder of the brand can achieve. And no one will ever make you who you are, but yourself. Once you've reached a certain level, then a system like Laplace can help you accelerate your development and accelerate it to a point that you cannot do it on your own anyway. So going to 1 to 5? Yes. So I really see Laplace as an acceleration platform. And to a certain extent, this is also building the brand because from the initial stages to scaling up, the brand is not exactly the same. So yes, there is a brand building component. But the initiation stage has to be you and only you can do it. And it's not a matter of system you sell through. Only you can do it. I think if I had to nail it down to one element, I think the main misconception that you want to avoid when dealing with Laplace is thinking that it will do it for you. It will do it with you. It will help you do it. But at the end of the day, it is still your wine. So you really have to view Laplace as something that can take you to a level that you cannot achieve on your own. So yeah, it really comes down to understanding that it's not going to help you do less. It's actually going to help you do more and more effectively. So I guess now if you ask me, but listen to me, I'm asking you for the entire thing. Tell me your thoughts. So I guess the producers really have to understand what they are signing for. And for me, it comes up with answering two key questions before thinking seriously about going through the past. The first one is, am I not overestimating the power of my brand? Because we've seen that happening. I'm not going to quote names, but we know some that entered the past recently because there were superstars in the local market, but actually we're not really known outside of some of the UK merchants and their own country. So because if your wines are not selling themselves and flying off the shelves in the market that you are already present in, the lightiness of your wine doing better, just because it's sold in 85 different markets is quite low. Then the second question that's really important to ask is, what are the resources that I have, both in human and financial terms, to grow my brand and to give you an example, brands like Senya or Opus 1, they will have their own people representing the brand in each of the big major markets that they have. I think Opus 1 has something like 30 people on the floors everywhere with a dedicated budget. And I'm not saying that it's the case for Opus 1, but to give you a benchmark, not to be good, usually have a marketing budget, which is 35% of their turnover. So can you do that? Can you invest that much? Because if you can't the likeness of you being disappointed by the plans is quite high again. Okay, so just imagine that my long-lost uncle Bob has died and left me a highly profitable winery in Oregon that makes sort of cult pinot o'uas. And I'm thinking to myself, I don't want to go distributing all around the world, I'd like them distributed through Laplace. What's my first step? Well, usually we'll start with the courtier. So if you are that, you know, we now in Oregon, the likeness of the courtier, everybody knows us, yeah, yeah. So they might have approached you already, or they can be in a courtier in your local market like Tom Portier in Australia. So that would be the first step. You will be approached by someone. And then if you are considering that option, you will have to work on your numbers, but you're very good at Excel. I can do a few tables and everything by now. So which line of your range do you want to sell through the plas? What volume do you want to allocate to the plas? What markets do you want to keep for yourself with seeing with Matthew that the local market is usually easy to negotiate, but you might also retain some historical markets. And that might be a tougher negotiation with the plas. And then you have to work on your story. Remember in the last episode you have to be story ready. What makes you one unique and highly recognizable? Because you will need proof of concept before moving to the next step within the Gossia. And they need to quickly see what's in it for them. They need to see how they will be able to make money with your brand. And based on that, the courtier will try to get your meetings with the Gossia. You will need to visit them in Bordeaux and present your wise and taste with them and tell them your story. And I guess then it's just like a date. You will quickly see if you have similar visions and if you click or not. And if the Gossia are interested, then you know, negotiation will begin. And you will prepare for your first release. But to conclude on that, let's listen to Tom Portet about a couple of do's and don'ts on the plas. If you talk to an estate and you want to list the do's and don'ts before going through the plas to make it successful, what do you need to do? What you need to don't do? Oh, be very, very ask yourself ten times if you really want to do this and then do it again. And I think you really need to list the reasons you're doing it and understand what you're doing it. And they have to be extremely extremely sure that that's the direction they want to know and probably have extreme awareness for the wines already there and why they're successful. How long it took them to be successful? Because at the end of the day, if it was easy, then everyone would do it. And I can assure you it's very, very hard. And time like making great wine is not negotiable. It takes a long time and it's hard and you have to show up every day in all parts of the business. What you shouldn't do is there any don't like obvious one. Well, we start with that. Start with don't do it. We should buy firsted buys and then try and convince yourself to do it. But no, I think you have to have the out. You really have to have the ambition to want to go into lots of markets and be willing to support lots of markets. And I guess if you're not willing to make that effort, if you're not willing to meet people and engage with people and talk about your wine, then it's extremely hard to do for my salvation. So listening to that, it sounds like my quest to have an easy life isn't really working out the way I was hoping it would. It seems that brand owners still have their work cut out for them. Well, the L.A. is to be successful. for through the blast. - Well, don't hold back, Polly, let me know what they are. Well, I don't want to spoil too much because that's what we are going to explore in our next episode. How to build a fine wine brand and try to understand how fine wine in the secondary market works. - I can't wait to discuss it with you. This podcast episode was presented by me for the City Carter editorial director, Overeigny Global, along with Polly Vicar, the CEO and co-founder, and it was edited by Polly Hammond and the five forests team. We want to thank all the fascinating personalities who took the time to answer all of the hard questions we threw at them, only a few of whom were featured in today's episode, but you'll be hearing from many, many more of them in the episodes to come. - Insignyapas de Bordeaux was made possible, thanks to the support of the City of Ibergette, one of Bordeaux's leading negotiations house. We are very grateful to Matryusha Dronien, all of his team for sharing insights, data, contacts, while allowing us to to lead your story of freedom. Until next time, see you, bye.