Investing Part Of Your Portfolio In Wine? Speak With Marc LeFleur First. He Gets It.

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You cannot just go out and buy pallets of wine and, you know, Hope that

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in 10 years you'll sell them at a better price. The vast majority of the

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wines, they will not take any value over

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10 years. Sit back and grab a glass. It's

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Wine Talks with Paul Kay.

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Hey, welcome to Wine Talks with Paul Kay. And we are in studio today in

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beautiful Southern California about to have a conversation with Marc Lefleur all the way out

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in Geneva, Switzerland. Hey, have a listen to a couple of shows that just put

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out one coming up with Zaya Yunan.

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And this story is unreal when it comes out in about

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a week and a half. I mean, it's really, really quite interesting.

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But not while we're here today. Here to have conversations with Mark Lafleur. Welcome to

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the show. Thank you, Paul. Honored to be with you. From

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Geneva, Switzerland, along the way. Yes. So it's

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nighttime there, I think, right? 7 o' clock, 8 o' clock. Evening, evening, 7 o'

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clock. Beautiful sky. It's summer, summertime

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today. Are you

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Swiss by birth? No,

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I'm American by birth, actually. Born in

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Guadalupe, West Indy. My parents traveled a lot when I was a child

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and we ended up in Switzerland when I was 4 or

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5 years old. So I've been here for quite some time. Wow.

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How interesting is that? So what languages do you speak? We speak

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a few different languages in Switzerland. Obviously you have to

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learn mandatory German when we go to school

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and then we have a few options. So it's quite common to speak

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a fourth language, if not more. And my fourth language is Italian.

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In French. In French, obviously. Yeah, yeah, yeah. Wow. You

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know, I just had this guy I was talking about whose show is coming up,

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incredible story from Iran and

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he says, I came to America. I was 13. I did on my own. I

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showed up, I and they put me in German

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class in, I think it was in Illinois when he,

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where he landed at 13 by himself. He didn't bring his parents or anybody. He

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just decided he was leaving Iran and coming. I said, why would they put you

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in German class in Chicago

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when you're coming from a country that speaks Farsi?

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So it didn't make any sense to me. But my father's

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from Cairo and he spoke five languages as part of the culture, which is

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not a very American thing to do, to have a multicultural,

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the background in languages as you're, as an American. So it's really interesting. Do

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you find that that language skill set

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is an important skill set in the wine trade? Yes.

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Well, in my, in my in my situation, it is

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because especially the Italian. I.

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I'm personally very fond of Piemont

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wines. I travel there very, very frequently.

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And obviously, speaking Italian opens a lot of doors in terms

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of building relationships with the producers. There's just a whole different

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way of being welcomed there when you speak the language.

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I'm saying this, the Italians are very welcoming to everyone.

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There's no doubt about that. But surely speaking the language

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helps. Well, we were in Piemonte

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just a few months ago. I opened my big mouth because

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we like to go to Monaco for the Grand Prix. And I told some

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friends because every year we've told them that we've gone, they said, no, you know,

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it's too expensive or whatever the reasons are. This time, five of the

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couples said, yeah, we want to go. So I was straddled with 12

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people to move around, and I, of course, wanted to do some wine events.

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And we started in Pomonte and had an incredible time there. Dropped into

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Monaco for the race, headed to Bordeaux for some tasting and

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podcasting there, and then came home. It was very

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gracious. But what a world of difference between

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wine cultures such as Piemonte. I don't know if

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you want to call Pimon to Piedmont, Pimonte, and just

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to say Bordeaux, you know, just a world of difference in the

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rural aspect of it, obviously, the grapes and the. In the

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terroir. But how do you. How do

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you define that with your clients when it comes to collecting and investing

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wine? Yeah, we can still. We can start from there. That's a

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good. That's. That's a good comparison. I think

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there are differences, I would say,

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in all areas. You mentioned terroir, you mentioned grape varieties,

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all these aspects, of course, but I think

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the production in Piedmont is still very

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artisanal compared to what Bordeaux is doing.

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Bordeaux is

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at the top of the pyramid. It's a rich man's game in a good

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way, in the sense that there's a lot of capital available for the.

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For the. For the classified chateaus.

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They are competing for excellence, they are

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innovative. They are doing a lot of research to

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understand the environment in which they're growing the grapes, to

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understand how they can better in terms of wine quality.

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It's high tech in Bordeaux for the top tier

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chateaus and in Piedmont is

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more, I would say,

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reminiscent of what's happening in Burgundy in terms of approach.

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And all the Piedmont producers have gone to

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Burgundy to see how things are done over

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there, to be able to learn

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more and replicate quite a few of

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the Burgundy approaches in Piemonte, that's an interesting comparison.

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And for the listeners, I don't think we properly introduced what you do as an

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investment consultant and building

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investment portfolios around wine, which is a really interesting concept. And

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we'll peel that back a little bit later. But when

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my dad was selling wine in the 70s in his wine shop

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as a French speaking, you know, his French was a second language or third

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language and a key understanding of the

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French culture. But he always sort of not complained, but he always sort of

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would say, hey, you know, the way the Bordelaise have positioned themselves, they've sort

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of not over romanticized, but romanticized the

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value of a good glass of Bordeaux and

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not exclude the rest of the wine world, but to sort of position itself, as

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you said, as king of the hill. And I think that's still true,

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that certainly they've been able to

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elevate their status in the world of wine based on the

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classification. And I guess the

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natural rarity of the wines is that, I mean it seems like it's always

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been a solid investment for someone to invest in a top

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growth Bordeaux.

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That's a topic I love speaking about. And

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Bordeaux wines are not that rare as one would believe.

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And I think there's a misconception around

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the top. The first growth, for instance, as to

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their, their scarcity.

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Muto hot shield is is produced to about

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300000 bottles per vintage. Margaux is

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150 000. I think Lafitte is probably the smaller

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producer out of the first roast, it's still 100000 bottles.

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We're not talking about super rare bottles at all. And I think

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this is where Bordeaux faces issues,

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is when there's a global slowdown in market demand, they rapidly

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into oversupply situations and

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stress on pricing. That's when we see prices go down. Right.

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Whereas Burgundy and Piemonte producers,

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well, historically in Burgundy and

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now for different reasons in Piemonte, we'll get to that. But

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Burgundy has top wines

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globally celebrated that can be produced

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at levels of what, two, three, four barrels, a thousand bottles, up to

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5,000. So I mean the, the scale of what Burgundy

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and Piemonte is producing on single site vineyards is

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completely different from what Bordeaux is doing with hundred

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thousands of bottles of the, of the first growth. You

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know, there's so many directions that take that thought because

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again, these classified growths, they're

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positioned as you know, I think in general, the general public when it

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comes to wine would barely know how to pronounce them, let alone

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they would certainly say that the rarity of them would be,

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would be the eminent feature. And here we are saying

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there's no up to 25,000 cases of one and

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115,000 cases of another. And that, that's

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quite voluminous. But it's still, it's still, they, they still have a

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demand and they still have a rare, an

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exclusivity to, around them. And if you talk to,

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let's say, novice collectors, novice investors, that's where they're

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going to go first, is to say, oh, well, I have, I

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have Lafitte in my cellar and I have Petrus in my cellar and I have,

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I have, you know, Margaux in my cellar. It.

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And that's not changed in a long, long time. Does Barolo in

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Piemonte have that kind of, I don't know, what's

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the word I'm looking for? Do they have a kind of intrigue?

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Yeah, well, I think what you, what needs to be factored in is

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that Bordeaux has 150 years

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of marketing ahead of Burgundy and Piemonte.

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That's fair amount, you know, so there's, there's, it's.

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They started selling bottles in the 19th

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century. Right. So we're talking about a

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status that has grown ever since. Right. Whereas

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Burgundy is probably building a status

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at global scale in the past 50 years, maybe. And the

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Piemonte past 20, 30 or so. Right. So

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Piemonte is amongst what I call the

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investment worthy regions, the emerging, the

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emerging region because they're very new to, I would say

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the, the global public. And when you say of investment, are you talking about financial

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gain in the, in the future or quality or a little bit of

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both? Aging potential. I've got this in my

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cellar. I can't wait to taste it in five years, 10 years, 15

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years kind of thing. Or like we're going to spend some money on some

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wine, put it in the cellar and then we're going to see how it does

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in the future. Yeah, exactly. I

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think it's very important to, to, to make a distinction

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between what could be seen as a speculation and investment.

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Speculation would be

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betting on a few high priced bottles and hoping for a

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quick return in two, three years or so.

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Wine investment doesn't work like that.

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Returns are when they do actually

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happen in the expected way, or rather

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at the 10, 15 year horizon, if not more. So

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investing in wine, in essence. What does that mean?

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That means whether you're collecting at home, whether

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you're using a managed storage solution,

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usually in bond, the, the essence is

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placing capital in wines that have a strong potential to

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age 20, 30, 40 years in terms of developing

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quality, while at the same time they will become

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rarer and rarer on the global market marketplace.

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So the, the, the, the, the target is to be the owner.

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Preserved wine that can age well, and of which

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you may find yourself being the only owner to have a case to sell on

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the market in 20, 30 years down the road. So that's

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interesting. So you, you have to sort of, not only, I mean,

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I guess the Bordeaux classified gross going back

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to that would be sort of the blue chip stocks, you know, everybody knows what

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they are. There's no, there's not necessary to predict their value

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in the future in the sense of quality, certainly not in financial gain or at

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demand for those aged Bordeaux in the future.

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But man, if you're predicting potentially what a

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Barolo might be worth or, you know,

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another part of the world, Burgundy for instance, as well,

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that takes a little bit of skill and a little bit of understanding of

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where wines are, where the vintages, where

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the terroir is at the time that those vintages are made, in order to not

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only predict the quality of them, but potentially predict

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the rarity of them. When that happens, is that kind of your

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skill set? Is that what you're trying to invest into your, for your clients?

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Yeah, I think, I mean, no, no, no one can guess the future

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in terms of valuation.

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You cannot draw a continuous line from the past, hoping the future

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will mirror the past. So the,

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the one thing that

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we can't put on the table is the understanding of

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terroir quality of aging potential of the wines in the

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volumes of production and potential demand going forward, I

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think we can

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use the data at hand and make an assumption

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rather than a prediction. Right. And

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in the case of Piemonte wines, Barolos and Barbarescos, what

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is interesting today is

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climate change, which is very honestly rather

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playing favorably to that region for the time being.

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And I can see that for the next 10, 20 years, obviously

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if it gets much warmer quicker, it might be an issue. But

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the Nebbiolo grape variety that goes into the Barolos and

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Barbaresco is a late ripening grape.

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And historically on some cold vintages, the,

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the producers had a hard time to reach maturity

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with their grapes. And sometimes on the colder vintages, well,

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those Baros and Barbarescos would always remain rather

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austere and difficult to drink, even after

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some decades. Right. But the few degrees

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or degree and a half perhaps, that we're having on average today

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and in the Piemonte region is actually,

238
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in my opinion. And you can, you can see, you can hear that from producers

239
00:15:16,740 --> 00:15:20,180
helping the, the quality of, of the

240
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grapes generally. So we have a context here where the wines

241
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are absolutely superb coming out of the past vintages

242
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and long aging potential. Softer tannins,

243
00:15:31,780 --> 00:15:35,460
more approachable because both of. Both because of

244
00:15:36,100 --> 00:15:39,540
riper, riper grapes and, and

245
00:15:39,540 --> 00:15:42,740
improved white making, of course. So we have top quality,

246
00:15:43,220 --> 00:15:46,470
good, good climatic conditions, long aging potential

247
00:15:46,870 --> 00:15:50,670
in the wines versus Burgundy at,

248
00:15:50,670 --> 00:15:54,390
I would say, comparative caliber,

249
00:15:54,790 --> 00:15:58,630
maybe. Yeah. A quarter to, to

250
00:15:58,630 --> 00:16:02,310
half the price. Yeah. You know, it's kind of interesting. I. I did.

251
00:16:02,310 --> 00:16:05,830
I did this for 35 years, tasted every Tuesday from

252
00:16:05,830 --> 00:16:09,070
9am to 2pm you know, amassed

253
00:16:09,070 --> 00:16:12,450
100,000 wines under my palate. Excellence.

254
00:16:12,610 --> 00:16:16,410
It took a long time for me to. To grasp

255
00:16:16,410 --> 00:16:20,050
the value of good Barolo, good Nebbiolo.

256
00:16:20,850 --> 00:16:24,570
And it almost wasn't until we went on this trip where

257
00:16:24,570 --> 00:16:27,810
I started to understand, you know, that terroir differences and how,

258
00:16:28,370 --> 00:16:31,930
how special the grape is to produce these rather

259
00:16:31,930 --> 00:16:35,650
unique wines in that part of the world. Does when somebody comes

260
00:16:35,650 --> 00:16:39,380
to you, it says, I want to invest in wine.

261
00:16:39,380 --> 00:16:42,740
Is that what they say? Or I want to create a cellar that might have

262
00:16:42,740 --> 00:16:46,500
future financial value. What's their typical purpose of coming to Marc

263
00:16:46,500 --> 00:16:50,140
Lefleur and, and trying to figure out what they're going to do in the

264
00:16:50,140 --> 00:16:53,780
wine world? Well, usually

265
00:16:53,780 --> 00:16:57,500
they, they are already collectors.

266
00:16:58,140 --> 00:17:01,780
They have knowledge around wine, and they do have a

267
00:17:01,780 --> 00:17:05,260
feeling that they can probably do something a little bit more rational

268
00:17:05,260 --> 00:17:09,100
than purchasing by compulsion and

269
00:17:09,420 --> 00:17:12,780
drinking and enjoying, which they do, and they will continue

270
00:17:12,940 --> 00:17:16,780
doing. But if they have some extra cash to, to lay aside,

271
00:17:17,180 --> 00:17:20,460
they. They may be looking for a route

272
00:17:20,780 --> 00:17:23,820
of purchasing wines that is

273
00:17:24,860 --> 00:17:28,140
very simply backed up by a little bit more of data and

274
00:17:28,300 --> 00:17:32,060
analysis. And usually there's, there's a. There's

275
00:17:32,060 --> 00:17:35,740
an understanding that storing the wines in bond far away from

276
00:17:35,740 --> 00:17:39,380
home, not only for avoiding to drink them, because

277
00:17:40,180 --> 00:17:43,940
if you start drinking your investment well, then, well, that's great because you're drinking great

278
00:17:43,940 --> 00:17:47,460
wines. But the idea is to keep them aside. Usually

279
00:17:48,020 --> 00:17:51,620
they come to me to organize a managed inbond storage solution,

280
00:17:52,500 --> 00:17:55,620
which is kept. So wines are kept in professional storage.

281
00:17:56,260 --> 00:17:59,460
That's interesting, because my career, look, my business

282
00:18:00,020 --> 00:18:03,820
was the original Wine of the Month club, and it was. Wines were 15 to

283
00:18:03,820 --> 00:18:07,600
$20 retail. That's what people bought, which is obviously a very important

284
00:18:07,600 --> 00:18:11,200
segment of the market. But I found there were two types of

285
00:18:11,440 --> 00:18:15,200
sort of unophiles that were really into wine There was the one type

286
00:18:15,200 --> 00:18:18,880
of unophile, which I see a lot, which is they just

287
00:18:18,880 --> 00:18:22,160
chase the biggest brand they can to say in the next

288
00:18:22,160 --> 00:18:25,960
conversation with somebody at dinner, I only drink this. I. I have this

289
00:18:25,960 --> 00:18:29,200
in my cellar. And that's one type of collector. And then there's the other type

290
00:18:29,200 --> 00:18:31,920
of collector that actually seeks to understand

291
00:18:33,480 --> 00:18:37,320
the value of that glass of wine, not just to talk about the brand

292
00:18:37,320 --> 00:18:40,960
name, but to actually talk about the wine you have. Are those

293
00:18:40,960 --> 00:18:44,640
two segments that exist, or are there more when it comes down

294
00:18:44,640 --> 00:18:48,360
to collectors and people investing in wine? No, I

295
00:18:48,360 --> 00:18:52,160
think you're. I can see those. Yeah,

296
00:18:52,160 --> 00:18:55,880
those. Those two polls as well. But what.

297
00:18:56,920 --> 00:19:00,660
What often happens is that investing in wine and has a lot to do

298
00:19:00,660 --> 00:19:04,260
with deconstructing false beliefs. What. What I like to

299
00:19:04,260 --> 00:19:06,860
call. We talked about Bordeaux just before, but

300
00:19:08,540 --> 00:19:11,740
most often collectors who want to start

301
00:19:11,740 --> 00:19:15,500
investing in wine with a view not necessarily to drink the bottles,

302
00:19:15,900 --> 00:19:18,700
but to. To have them as cash in the bank.

303
00:19:20,460 --> 00:19:23,220
They. They would come to me and say, oh, you know, I love this wine.

304
00:19:23,220 --> 00:19:26,830
I would like to invest in this wine. Or, I've heard about this.

305
00:19:26,990 --> 00:19:30,710
Is this a good investment? And usually it's not the case, because the wines

306
00:19:30,710 --> 00:19:34,430
that you love continue loving them, but

307
00:19:35,230 --> 00:19:38,990
they're not necessarily a great investment for different reasons. I mean, we talked about

308
00:19:38,990 --> 00:19:42,750
Mouton, which is an amazing wine. There's

309
00:19:42,750 --> 00:19:46,390
many great reasons to acquire Mouton on a regular

310
00:19:46,390 --> 00:19:50,030
basis, because it's one of the top Bordeaux that can be found,

311
00:19:50,030 --> 00:19:53,230
and it's fabulous. But that's not

312
00:19:53,470 --> 00:19:57,310
necessarily where you want to put your. Your cash today. If you have a view

313
00:19:57,310 --> 00:20:00,910
of. Okay, I want to see some valuation over 20. 10, 20

314
00:20:00,910 --> 00:20:04,430
years. All right, so there's. There's. There's. There's

315
00:20:04,430 --> 00:20:08,030
conversations I have with my clients around these

316
00:20:08,030 --> 00:20:09,870
topics. Sharing data,

317
00:20:11,070 --> 00:20:14,750
deconstructing false beliefs and. And showing them a route

318
00:20:14,750 --> 00:20:15,310
which is

319
00:20:18,430 --> 00:20:22,210
going towards properly rare products versus

320
00:20:22,290 --> 00:20:24,690
perception of rarity. You think there's social

321
00:20:26,050 --> 00:20:29,890
and political pressure on the perceived value of these wines.

322
00:20:29,890 --> 00:20:33,730
And what do I mean by that? It's currently the. The sort

323
00:20:33,730 --> 00:20:37,450
of social view of Bordeaux is that

324
00:20:37,450 --> 00:20:41,050
anybody can go there. There's lots of Chateau for sale. You can invest if you

325
00:20:41,050 --> 00:20:43,810
want. And. And there certainly was some

326
00:20:45,250 --> 00:20:49,070
degree of exclusionary practices when it comes to real

327
00:20:49,070 --> 00:20:52,710
estate in Bordeaux. Burgundy's always been that way. Burgundy is very

328
00:20:52,710 --> 00:20:56,310
tightly controlled, as you know, there's people standing in line to get access to vineyards.

329
00:20:57,030 --> 00:21:00,630
Does any of that play into what. What you talk about with your investors?

330
00:21:01,590 --> 00:21:04,790
Yes, yes, there's a bit coming Back to Bourdeaux. I think

331
00:21:05,190 --> 00:21:08,950
there's a lot, there's too much generalization, like there is too much generalization

332
00:21:09,030 --> 00:21:10,310
in the world of wine

333
00:21:12,310 --> 00:21:15,600
everywhere. I think there's been

334
00:21:16,000 --> 00:21:19,680
last year a lot of talk, the media was talking about it,

335
00:21:19,760 --> 00:21:23,360
well, here in Europe, but I think in the US as well, of wine growers

336
00:21:25,760 --> 00:21:29,600
taking the vineyards out to replace it with other agricultural,

337
00:21:32,000 --> 00:21:35,680
whatever they, they could go for. But the French

338
00:21:35,680 --> 00:21:38,480
government, they subsidized, you know,

339
00:21:39,610 --> 00:21:43,130
taking the vineyards out. So the, the picture of Bordeaux was, was,

340
00:21:43,530 --> 00:21:47,050
was widely damaged because of, of that

341
00:21:47,050 --> 00:21:50,810
situation. But we're not talking about, we're not talking about the top

342
00:21:50,810 --> 00:21:53,690
level, but we're talking about the entry level. Right, which is

343
00:21:54,410 --> 00:21:58,010
a very different business, a very different segment that has nothing to do with investment,

344
00:21:58,090 --> 00:22:01,290
by the way. It's a, it's a different segment that

345
00:22:02,570 --> 00:22:05,210
has produced wines in large quantities.

346
00:22:07,130 --> 00:22:10,970
The Bordeaux appellation is very big in itself. And they did

347
00:22:10,970 --> 00:22:14,530
suffer from competition from Italian wines that

348
00:22:14,530 --> 00:22:16,970
probably, yeah,

349
00:22:18,730 --> 00:22:21,610
cheaper entry points, better value for money, Spanish wines,

350
00:22:22,330 --> 00:22:24,650
New World wines as well. And

351
00:22:26,650 --> 00:22:30,250
I would say when I say entry category, we're talking about bottles,

352
00:22:30,970 --> 00:22:34,330
let's say €10, €15, a little bit

353
00:22:34,410 --> 00:22:36,650
dollars is 1.2. I think today

354
00:22:38,390 --> 00:22:41,830
these wines suffered from huge competition

355
00:22:42,070 --> 00:22:45,030
from European wines and from wines from beyond.

356
00:22:45,590 --> 00:22:49,270
And obviously in that segment there are

357
00:22:49,270 --> 00:22:52,870
some producers, some wine growers who were probably

358
00:22:52,870 --> 00:22:56,710
very ambitious, creative, but did

359
00:22:56,710 --> 00:23:00,350
not necessarily have the financial, you know, the

360
00:23:00,350 --> 00:23:04,150
capital to actually improve the wines

361
00:23:04,150 --> 00:23:07,500
that they were producing. And

362
00:23:08,060 --> 00:23:11,580
they did suffer from the competition at the end. And then many others

363
00:23:12,860 --> 00:23:16,660
did not even seek to improve what they've been doing for ages. Right.

364
00:23:16,660 --> 00:23:20,380
And for during the 80s, 90s and the beginning of the century, all of

365
00:23:20,380 --> 00:23:24,180
the entry category, Bordeaux was selling easily. And

366
00:23:24,180 --> 00:23:27,060
now suddenly it's a wake up call and say, well, it doesn't work anymore. Yes,

367
00:23:27,060 --> 00:23:30,140
well, you've been doing the same thing for 40, 50 years and well, the world

368
00:23:30,140 --> 00:23:33,540
is changing and competition is there. There's great wines from

369
00:23:33,540 --> 00:23:37,380
elsewhere coming into France as well. And, and, well, what's your plan?

370
00:23:37,380 --> 00:23:40,900
Well, I don't know. I've been doing this for 50 years and it worked so

371
00:23:40,900 --> 00:23:43,340
well. Not going to work anymore. Right, so

372
00:23:44,780 --> 00:23:48,140
this is one story about the entry category

373
00:23:48,140 --> 00:23:51,420
Bordeaux on the other opposite side.

374
00:23:51,740 --> 00:23:52,139
The

375
00:23:55,500 --> 00:23:58,780
all classified chateaus for large

376
00:23:59,020 --> 00:24:02,300
majority are, as I said, I think earlier in the call,

377
00:24:02,860 --> 00:24:06,640
are really engaging. Passion, determination,

378
00:24:06,720 --> 00:24:10,560
capital, technology, whatever's out there to

379
00:24:10,720 --> 00:24:14,320
improve, perform and come out vintage after vintage with the best

380
00:24:14,320 --> 00:24:18,160
possible product. Right. And so these chateaus are

381
00:24:19,760 --> 00:24:23,440
obviously still there, suffering from the global

382
00:24:23,600 --> 00:24:26,240
economy, that's a different story.

383
00:24:27,680 --> 00:24:31,440
The market is not great for top

384
00:24:31,440 --> 00:24:34,980
end wines right now. When you're a seller

385
00:24:35,300 --> 00:24:39,060
for the buyer, it's fantastic. Right. So it's a great time to invest.

386
00:24:39,140 --> 00:24:42,020
It's a great opportunity, great window of opportunity to,

387
00:24:42,820 --> 00:24:45,460
to collect at this point of time. But

388
00:24:46,420 --> 00:24:49,700
you said something interesting, I want to pause you there. That

389
00:24:50,020 --> 00:24:53,300
made me see the marketplace a little clearer. And

390
00:24:53,780 --> 00:24:57,220
as a vendor of wine, I always felt, you know,

391
00:24:57,220 --> 00:25:01,040
margins were important. Buy it as least expensively as

392
00:25:01,040 --> 00:25:04,400
I can. As long as I keep maintain what's in the bottle as quality and

393
00:25:04,400 --> 00:25:08,200
sell it for a fair value. You know, I was not the type that would

394
00:25:08,200 --> 00:25:10,800
sell it for as much as I can. It would be what I thought its

395
00:25:10,800 --> 00:25:14,480
market value was. And so the whole idea of my club at the time that

396
00:25:14,480 --> 00:25:18,000
was started, you know, 50 years ago was we're going to send you the best

397
00:25:18,000 --> 00:25:21,840
of what's on the street for the price that they were offering. So we would

398
00:25:21,840 --> 00:25:25,640
compare $20 cabernets with $20 cabernets and $50 bordeaux

399
00:25:25,640 --> 00:25:29,340
with $50 bordeaux and tell you amongst those segments,

400
00:25:29,340 --> 00:25:32,980
these are the better values. And so that's what, so

401
00:25:32,980 --> 00:25:36,460
that that marketplace is convoluted,

402
00:25:36,460 --> 00:25:39,900
congested, influenced by all kinds of market

403
00:25:39,900 --> 00:25:43,420
forces which, not the least of those things like white claw and bubbly flavored

404
00:25:43,420 --> 00:25:47,060
drinks and the non alk movement and the low elk movement and all the other

405
00:25:47,060 --> 00:25:49,180
things that are happening sort of in society.

406
00:25:50,780 --> 00:25:54,540
But then as I got out of the industry or started getting more mature in

407
00:25:54,540 --> 00:25:58,220
the industry I'm talking About the last 20 years, you start to realize the value

408
00:25:58,220 --> 00:26:01,900
of this honest glass of wine that reflects terroir, that tells you about the expression

409
00:26:01,900 --> 00:26:04,780
of where it came from and when it came from. And

410
00:26:05,660 --> 00:26:09,460
these, those market forces tend to start to dilute a

411
00:26:09,460 --> 00:26:13,300
little bit. Even though you're saying there's pressure in that area as well,

412
00:26:13,300 --> 00:26:16,900
of course, because general consumption is down and you know, the lots of

413
00:26:16,900 --> 00:26:20,380
societal changes, but less volatile

414
00:26:20,860 --> 00:26:24,630
than that congested part of the marketplace that, that.

415
00:26:24,870 --> 00:26:28,630
I will talk about your response to one of the posts in a minute. But

416
00:26:28,950 --> 00:26:32,670
is that, do you see that as accurate? Yeah, yeah,

417
00:26:32,670 --> 00:26:35,990
absolutely, absolutely. I think it's. Now it's,

418
00:26:36,230 --> 00:26:38,389
it's correct. I think that the congestion is

419
00:26:39,830 --> 00:26:43,670
clear. The, and

420
00:26:44,070 --> 00:26:47,910
I don't know if I like, I like this comparison because I

421
00:26:47,910 --> 00:26:50,890
use it every now, now and then. But the,

422
00:26:51,610 --> 00:26:55,330
you know, it's like I'm into cycling. I love cycling. The Tour de

423
00:26:55,330 --> 00:26:58,810
France is starting in a month, right. So we'll, we'll all have our eyes on

424
00:26:58,810 --> 00:27:01,210
the Tour de France. But you know, it's a, I love. Watching it, by the

425
00:27:01,210 --> 00:27:04,930
way. It's a three week, it's a three week race, right?

426
00:27:04,930 --> 00:27:08,330
And the, at the start of the race you have 180 or 200,

427
00:27:08,570 --> 00:27:12,090
you know, cyclists. And as, as the race goes and

428
00:27:12,570 --> 00:27:16,250
they hit the mountains and you know, the hills get steeper. Well,

429
00:27:17,240 --> 00:27:20,720
at the back of the peloton, you know, those who are not well

430
00:27:20,720 --> 00:27:24,480
prepared, well, they, they drop off, right? And some drop out of the

431
00:27:24,480 --> 00:27:28,040
race. And at the end of the race when they reach Paris, well, way

432
00:27:28,040 --> 00:27:31,880
less cyclists than they were at the beginning. And it's every year

433
00:27:31,880 --> 00:27:35,680
like that, right? And well, the Tour de France is still

434
00:27:35,680 --> 00:27:39,440
not great, but those who are not well prepared, well,

435
00:27:39,440 --> 00:27:43,120
they, they kind of drop out, right? And, and in the

436
00:27:43,120 --> 00:27:46,880
congested wine segment, it's, it's, it's the same, it's the same

437
00:27:46,880 --> 00:27:50,540
thing, the same reality. If you're not pre, for, for competition,

438
00:27:50,540 --> 00:27:54,260
for change. And I'm not saying change in terms of,

439
00:27:54,580 --> 00:27:58,260
oh, we have to do things completely different, but when I say change, it's just

440
00:27:58,420 --> 00:28:02,020
other, other product production regions coming out with great

441
00:28:02,020 --> 00:28:05,820
products at better value for money. And so,

442
00:28:05,820 --> 00:28:09,660
yeah, that obviously, you know. It'S, it's an interesting problem and

443
00:28:09,660 --> 00:28:13,460
I, this is the part that drives me crazy. In particular, why, why we got

444
00:28:13,460 --> 00:28:16,860
in touch with each other. Your response to one of the posts or somebody's response

445
00:28:16,860 --> 00:28:18,780
to your post. Because

446
00:28:20,300 --> 00:28:23,900
wine, it's slow, right? It's once a year

447
00:28:23,900 --> 00:28:27,540
that you have a chance to do something with it and you

448
00:28:27,540 --> 00:28:31,300
can't predict all the things that are going to come from your vintage

449
00:28:31,300 --> 00:28:34,940
and what the market's going to be ready to take on. Because you're looking

450
00:28:34,940 --> 00:28:38,500
five to seven years down the road. Like, if you think

451
00:28:38,500 --> 00:28:42,140
Syrah is going to be hot, a hot product, I

452
00:28:42,140 --> 00:28:45,860
mean, for instance, look at Sauvignon Blanc or Sancerre, for example. 20 years ago,

453
00:28:45,860 --> 00:28:49,500
15 years ago, you couldn't sell Sancerre to save your life and only to collectors

454
00:28:49,500 --> 00:28:52,600
or at least aficionados. And now I see people ordering

455
00:28:52,600 --> 00:28:55,800
Sancerre, you know, in Spanish restaurants and, and it's like,

456
00:28:56,760 --> 00:29:00,600
okay, when did that happen? Well, it's slow. It's very slow.

457
00:29:01,080 --> 00:29:04,920
And so when it comes to innovation in our industry, what does that

458
00:29:04,920 --> 00:29:07,600
mean? I don't, I don't know what it means. And here I am, I've spent

459
00:29:07,600 --> 00:29:11,080
35 years doing this. I don't, I don't think new

460
00:29:11,080 --> 00:29:14,720
packages, you know, are innovation. I don't think putting things in a tetra

461
00:29:14,720 --> 00:29:18,320
pack is innovation or cans or low alka. I don't think that's

462
00:29:18,320 --> 00:29:22,080
innovation. That's just a response. I'm not sure what the word

463
00:29:22,080 --> 00:29:25,720
innovation means, but because it's so slow and because we have little

464
00:29:25,720 --> 00:29:29,480
chance, it. Sometimes the dynamic has changed before you can

465
00:29:29,480 --> 00:29:33,280
respond to the previous dynamic. Now, in this particular

466
00:29:33,520 --> 00:29:37,200
case, in your case, with investment wines, that has been, yeah,

467
00:29:37,200 --> 00:29:40,840
Bordeaux through some tough times. And we have this, you know, it is

468
00:29:40,840 --> 00:29:44,560
cyclical. It's like any industry that level

469
00:29:44,560 --> 00:29:48,100
of wine seems to be not immune from, but

470
00:29:48,100 --> 00:29:51,900
pretty close to the general consumption of

471
00:29:51,900 --> 00:29:54,660
wine is a problem. And that leads to this question.

472
00:29:56,820 --> 00:30:00,540
You responded to a comment about terroir. You posted a comment about

473
00:30:00,540 --> 00:30:04,300
terroir and how it's driven, how it's, you know, as you

474
00:30:04,300 --> 00:30:06,900
and I would see it, being in this industry as long as we have, is

475
00:30:06,900 --> 00:30:10,020
the critical part of a wine and what it should be expressing.

476
00:30:11,940 --> 00:30:15,220
I'm going to stop for a second. I threw this out at a winemaker,

477
00:30:15,620 --> 00:30:18,740
a Bordelaise winemaker the other day and I said, you know, there's really no such

478
00:30:18,740 --> 00:30:22,540
thing at that level of a bad vintage. It's certainly

479
00:30:22,540 --> 00:30:25,540
there are vintages that are better than others to your palate. But when it comes

480
00:30:25,540 --> 00:30:29,339
to the idea that a successful vintage is explaining to the

481
00:30:29,339 --> 00:30:32,740
taster, this is the year and this is the place that we grew it,

482
00:30:33,140 --> 00:30:36,620
that's a success. And we might like the

483
00:30:36,620 --> 00:30:40,270
15s bread in the 14s, but that 14 can be pretty good.

484
00:30:40,430 --> 00:30:43,554
You know, it could be a great expression of 1940,

485
00:30:43,786 --> 00:30:47,350
2014. So when you see those

486
00:30:47,350 --> 00:30:50,870
comments, like, well, we have to be more innovative. We have to, you know, we

487
00:30:50,870 --> 00:30:54,510
have to respond. We have to. And your comment was

488
00:30:54,589 --> 00:30:58,110
like, no, it's. What are you going to respond to?

489
00:30:58,270 --> 00:31:01,630
What, what are we doing? We're not going to put Lafitte in a can.

490
00:31:03,070 --> 00:31:06,910
Exactly. Yeah. You know, it's like,

491
00:31:07,620 --> 00:31:11,420
yeah, let's, let's repatch. Yeah, let's repackage the 15 again, see if that

492
00:31:11,420 --> 00:31:15,140
works. And I don't think that's going to help the market too much. Yeah, no,

493
00:31:15,460 --> 00:31:19,180
right, so what are they, what are they talking about?

494
00:31:19,180 --> 00:31:21,780
Do you know what this idea of

495
00:31:22,980 --> 00:31:26,740
terroir, the idea. Let's just take one comment that was just made that the idea

496
00:31:26,740 --> 00:31:29,540
of terroir is past his prime.

497
00:31:31,300 --> 00:31:35,100
Yeah, again, again, there's so much to say on, on the topic, but again, let's,

498
00:31:35,100 --> 00:31:38,100
let's, let's make some

499
00:31:38,500 --> 00:31:41,700
differences, some distinctions here, which are really important. I Think there is.

500
00:31:42,500 --> 00:31:46,220
I did this post on terroir which was, I think it

501
00:31:46,220 --> 00:31:48,820
was important just for me

502
00:31:50,100 --> 00:31:53,940
to refresh everyone's memory on the importance of

503
00:31:53,940 --> 00:31:57,780
the notion. But it is true that the terroir really applies

504
00:31:57,780 --> 00:32:01,380
to wines that do really have a

505
00:32:01,380 --> 00:32:03,780
terroir that specifically

506
00:32:06,130 --> 00:32:09,770
provides a set of wine profile and taste

507
00:32:09,770 --> 00:32:13,250
inside whatsoever. A good example, a good example here in

508
00:32:13,490 --> 00:32:17,250
Switzerland is Geneva. Geneva is a wine

509
00:32:17,250 --> 00:32:21,010
producing region, but they have a very, very poor soil.

510
00:32:21,010 --> 00:32:24,410
In terroir, Nothing remarkable. Whereas

511
00:32:24,410 --> 00:32:28,050
50km away in the next canton, there are

512
00:32:28,690 --> 00:32:29,730
really nice

513
00:32:32,150 --> 00:32:35,830
terrace vineyards bathed by the sun. Great terroir,

514
00:32:37,190 --> 00:32:40,790
it's a different, it's a different ball game. Right. So clearly

515
00:32:41,110 --> 00:32:44,470
Burgundy has one of the most

516
00:32:44,870 --> 00:32:47,990
richest terroir in the world, Piemonte as well,

517
00:32:49,750 --> 00:32:53,590
Bordeaux as well. There are other regions that have

518
00:32:53,590 --> 00:32:56,820
poor terroirs, poor soils, but the climate

519
00:32:57,140 --> 00:33:00,740
is favorable to wine growing. And you can grow wine very well.

520
00:33:00,900 --> 00:33:03,860
And then you may produce wines that are

521
00:33:04,420 --> 00:33:08,220
less influenced by the terroir because there's not that much under

522
00:33:08,220 --> 00:33:11,940
the soil that will influence the taste. Right. So it's

523
00:33:11,940 --> 00:33:15,420
more about winemaking and

524
00:33:15,420 --> 00:33:17,860
choices of grape varieties and blending.

525
00:33:18,980 --> 00:33:22,340
So I think that the notion of terroir is

526
00:33:22,340 --> 00:33:25,860
absolutely essential to

527
00:33:26,020 --> 00:33:29,540
many of the great wines, but that does not mean that it's always

528
00:33:30,820 --> 00:33:33,300
an essential component. Right.

529
00:33:34,420 --> 00:33:38,020
Then coming back to the question about innovation

530
00:33:39,539 --> 00:33:40,420
in wine,

531
00:33:43,460 --> 00:33:47,180
I think the most important thing

532
00:33:47,180 --> 00:33:50,860
that anyone could do is go and see the wine growers, speak with the wine

533
00:33:50,860 --> 00:33:54,410
growers. It is such a stressful

534
00:33:54,890 --> 00:33:58,450
job to actually start from

535
00:33:58,450 --> 00:34:02,250
January with a new vintage. You don't know what the climate is going to

536
00:34:02,250 --> 00:34:05,610
give you. Climate is changing. There are more storms,

537
00:34:06,090 --> 00:34:09,850
there's more hail, there's more ups and downs, there's colder weather

538
00:34:09,850 --> 00:34:13,610
patterns, unexpectedly frost, heat waves, is

539
00:34:13,610 --> 00:34:17,450
going in all directions. And what was always

540
00:34:17,450 --> 00:34:21,220
a stressful job, meaning that you start the year hoping

541
00:34:21,220 --> 00:34:24,940
that the, you know, the year will be successful

542
00:34:25,260 --> 00:34:28,940
all the way up to September, October, the harvest, and

543
00:34:29,500 --> 00:34:32,780
every day of, of, of the year is,

544
00:34:33,100 --> 00:34:36,780
is a stress, is a challenge for the wine grown and it's become even more

545
00:34:36,780 --> 00:34:40,580
challenging. How am I going to do to ensure that

546
00:34:40,580 --> 00:34:43,980
my vineyard is going to produce quality grapes in the

547
00:34:43,980 --> 00:34:46,969
climatic conditions that we have today? And

548
00:34:49,369 --> 00:34:52,809
to ensure that it requires a lot of adaptation

549
00:34:52,969 --> 00:34:56,449
in the way the vines are

550
00:34:56,449 --> 00:34:59,769
trimmed, in the way the soils are plowed, treated

551
00:35:00,089 --> 00:35:03,769
and so on. And so innovation,

552
00:35:05,369 --> 00:35:09,209
there's no time for innovation there. How

553
00:35:09,209 --> 00:35:12,569
do you. It's about taking care of,

554
00:35:14,740 --> 00:35:18,540
of your land, of your 10 hectares or 20 hectares of vineyard.

555
00:35:18,540 --> 00:35:22,340
Right. And the decisions the

556
00:35:22,340 --> 00:35:24,180
radical decisions that can be taken

557
00:35:26,180 --> 00:35:29,979
could go as far as, well, we're going to take this grape

558
00:35:29,979 --> 00:35:33,700
variety out and replant it with another grape variety

559
00:35:33,780 --> 00:35:36,660
because we believe the soil will handle it.

560
00:35:37,380 --> 00:35:40,990
Also in the context of global warming, and

561
00:35:41,070 --> 00:35:44,430
also perhaps because the demand, the

562
00:35:44,590 --> 00:35:48,350
market is perceived as

563
00:35:48,350 --> 00:35:52,150
more welcoming for another grape variety. But by

564
00:35:52,150 --> 00:35:55,390
taking such a decision, as you said, it's a very, very long shot.

565
00:35:56,350 --> 00:36:00,030
If you plant a different grape variety, it's going to take you

566
00:36:00,270 --> 00:36:03,910
5, 10 years to produce the first

567
00:36:03,910 --> 00:36:07,630
vintage of a wine that you will deem

568
00:36:07,630 --> 00:36:11,080
grape good enough to commercialize, and maybe 20 years to

569
00:36:11,720 --> 00:36:15,480
see it become, you know, the wine that you envisaged at the

570
00:36:15,480 --> 00:36:19,320
beginning. So it's not about, oh, well, the market is changing,

571
00:36:19,560 --> 00:36:23,000
next year we'll do this or. Yeah, right, exactly.

572
00:36:24,600 --> 00:36:27,960
What. That's the part that's driving me crazy. And I was

573
00:36:29,080 --> 00:36:32,400
like, if you took this, that'd be an interesting study. I don't know if you'd

574
00:36:32,400 --> 00:36:36,120
be able to figure this out, but if you took the segment of

575
00:36:36,120 --> 00:36:39,320
consumers, just segmented them, and you said, okay,

576
00:36:40,440 --> 00:36:43,800
well, in America, if you pulled a hundred thousand people and said, do you drink

577
00:36:43,800 --> 00:36:47,480
wine? The common knowledge is, at least according to the Wine

578
00:36:47,480 --> 00:36:50,960
Institute, 25,000 would say yes. But of that

579
00:36:50,960 --> 00:36:54,280
25,000, that includes the person that goes to the local

580
00:36:54,600 --> 00:36:58,360
Olive Garden chain restaurant of Italian food and orders a house

581
00:36:58,360 --> 00:37:01,680
Chianti. You know, they would say, I drink wine. But are they a

582
00:37:01,680 --> 00:37:05,520
candidate to care about wine? Probably not. And

583
00:37:05,520 --> 00:37:08,120
so the segments of consumers,

584
00:37:09,240 --> 00:37:13,080
there's always been a certain amount of people that want to learn about wine

585
00:37:13,240 --> 00:37:16,920
and are, are challenged by learning and just want to

586
00:37:16,920 --> 00:37:20,720
learn. There's also the group that's completely intimidated by it and stays

587
00:37:20,720 --> 00:37:24,400
away from it, and then there's people in between. So I don't know if that's

588
00:37:24,400 --> 00:37:27,970
ever changed, if it will ever change. And if, if, if today's

589
00:37:27,970 --> 00:37:31,530
generation thinks that, you know, innovation changes

590
00:37:31,530 --> 00:37:34,570
that. It just hit me as you're speaking

591
00:37:35,770 --> 00:37:38,890
that if you, if you try to take terroir out of the conversation

592
00:37:40,170 --> 00:37:43,610
and somebody responded to your, somebody responded to one of your

593
00:37:43,610 --> 00:37:47,210
responses of your last post about terroir, and the person said, if

594
00:37:47,210 --> 00:37:50,970
wine isn't dumbed down soon, it's going to be out of business. I completely

595
00:37:50,970 --> 00:37:54,490
disagree with that because it's always been the same. It's always been the same product.

596
00:37:55,320 --> 00:37:58,680
It's no different than it was when Noah landed on Mount Ara. And that's what

597
00:37:58,680 --> 00:38:02,360
it is. It's fermented grape juice. Maybe we've improved the production value

598
00:38:02,360 --> 00:38:06,160
and the quality, et cetera, but it's still the same product. And so if

599
00:38:06,160 --> 00:38:09,720
you try to dumb it down and take all that out of the conversation of

600
00:38:09,720 --> 00:38:13,520
wine, which I think is innovation in its own self, then all you're doing

601
00:38:13,520 --> 00:38:16,680
is Talking about a 14 or 12% alcohol beverage

602
00:38:17,880 --> 00:38:21,730
and that then you're lost everything because White Claw is

603
00:38:21,730 --> 00:38:25,530
6% and there's RTD cocktails that are 20. I mean, you're,

604
00:38:25,530 --> 00:38:28,490
you've just put wine into the mix of,

605
00:38:29,130 --> 00:38:32,490
of all the rest of it. If you can't discuss

606
00:38:33,610 --> 00:38:37,129
grape varietal on terroir, I mean, you've ruined it.

607
00:38:37,770 --> 00:38:41,530
And it's. Why would you do that? I think

608
00:38:41,610 --> 00:38:45,450
there's a question in there or not. I think there's, there's room for everyone.

609
00:38:45,690 --> 00:38:49,370
And there are multiple segments, as you say, there's multiple segments there.

610
00:38:49,370 --> 00:38:51,370
There are. There, there's a segment that

611
00:38:53,500 --> 00:38:57,260
doesn't need to look very far beyond the glass

612
00:38:57,260 --> 00:38:59,820
they're enjoying, and that's fine. Others,

613
00:39:00,780 --> 00:39:04,540
others want to know whether the wine has been organically

614
00:39:05,820 --> 00:39:09,420
grown and what was the winemaking process,

615
00:39:09,580 --> 00:39:13,340
because. Not so much because of the, of

616
00:39:14,140 --> 00:39:17,380
the wine knowledge that they want to acquire, but they just need it to be

617
00:39:17,380 --> 00:39:21,020
organic because they believe everything should be organic, which is fine as

618
00:39:21,020 --> 00:39:24,630
well. So they, they may be sensitive to that

619
00:39:24,630 --> 00:39:26,950
aspect and others are looking for more knowledge.

620
00:39:28,470 --> 00:39:32,310
And so, yeah, there are many different segments.

621
00:39:32,710 --> 00:39:36,470
But I think that the response of dumbing down is

622
00:39:36,790 --> 00:39:40,150
because we see that, we read that.

623
00:39:41,430 --> 00:39:44,230
I think it's a little bit, I would say,

624
00:39:45,190 --> 00:39:49,030
the end of civilization. I'm glad you're

625
00:39:49,030 --> 00:39:52,750
so glad you said that. I just wrote that. I just wrote that. I'm telling

626
00:39:52,750 --> 00:39:56,190
you right here in this paper. I wrote civilization as a word. No, but I

627
00:39:56,190 --> 00:39:59,950
mean, great empires have gone down, and most often

628
00:39:59,950 --> 00:40:01,950
by dumbing things down, you know,

629
00:40:05,310 --> 00:40:08,910
I don't think there's a great future for erasing what

630
00:40:08,910 --> 00:40:12,470
makes the richness of whether it's wine or anything else

631
00:40:12,470 --> 00:40:16,200
might. You know, it's kind of interesting because you probably, as you

632
00:40:17,320 --> 00:40:20,600
in Geneva, when you sit with your friends or family and you start having a

633
00:40:20,600 --> 00:40:24,400
nice meal and there's a good bottle of wine there that quite often,

634
00:40:24,400 --> 00:40:28,160
if not all the time, that that conversation ends up

635
00:40:28,160 --> 00:40:31,840
about that bottle of wine. And what's interesting when those happens

636
00:40:31,840 --> 00:40:34,200
here, in fact, I have a big event in my home tonight. We're going to

637
00:40:34,200 --> 00:40:37,000
be exposing some new Armenian wines that have come to America.

638
00:40:38,760 --> 00:40:41,830
Obviously, this event, that's the conversation. But

639
00:40:42,310 --> 00:40:46,070
amongst the regular conversation, the topic

640
00:40:46,070 --> 00:40:49,910
of Wine comes up. And even though there are. Everybody at the

641
00:40:49,910 --> 00:40:53,470
table's got a different level of knowledge of wine, that conversation is not

642
00:40:53,470 --> 00:40:57,190
intimidating by most people. And most people, because of the environment,

643
00:40:57,270 --> 00:41:01,110
you're sitting, having a meal, and you're relating, and there's a lot of

644
00:41:01,110 --> 00:41:04,750
camaraderie there that the intimidation

645
00:41:04,750 --> 00:41:08,550
goes away, regardless of your study of wine. And

646
00:41:08,630 --> 00:41:12,150
the reason I wrote down Civilization is when I was interviewing

647
00:41:12,870 --> 00:41:16,270
Florence Catiard from Chateau Smith Old

648
00:41:16,270 --> 00:41:19,030
Lafitte, they also own a winery in Napa.

649
00:41:20,070 --> 00:41:23,789
I had a similar question, and she said, yes, of course. We think that.

650
00:41:23,789 --> 00:41:27,430
Because it's. Because when you have that glass of wine, it is welcome to

651
00:41:27,430 --> 00:41:31,270
civilization. And. And I go, what? That is so

652
00:41:31,270 --> 00:41:34,660
profound. I hope I can use it. Which I just did. And then there's a

653
00:41:34,660 --> 00:41:37,620
movie out that I saw on the plane recently. It's a French movie. It's about.

654
00:41:38,340 --> 00:41:41,380
I think it's about the first restaurant ever or something, or the first chef that

655
00:41:41,380 --> 00:41:44,980
broke away from. From. And it's a woman chef at this point.

656
00:41:45,140 --> 00:41:48,980
But anyway, the. The protagonist in the

657
00:41:48,980 --> 00:41:52,820
movie says, wine is the intellectual part

658
00:41:52,820 --> 00:41:56,420
of the meal. And I thought that was very profound.

659
00:41:56,820 --> 00:42:00,180
So White Clock cannot be the intellectual part of the meal.

660
00:42:00,740 --> 00:42:04,340
A tetra pack, wine sold, or bag in the box.

661
00:42:05,250 --> 00:42:09,050
Imagine this, Mark. You're sitting at dinner and you've got this big box on your

662
00:42:09,050 --> 00:42:11,530
table, and you pull the spigot out and you put your glass under. And that's

663
00:42:11,530 --> 00:42:13,730
supposed to be the intellectual part of the meal.

664
00:42:15,490 --> 00:42:18,930
Yeah, but sadly, I think the.

665
00:42:19,650 --> 00:42:23,490
The word intellectual is. Is. Is. Is negatively perceived

666
00:42:23,810 --> 00:42:24,210
by

667
00:42:27,570 --> 00:42:31,280
a segment. Whereas I think the. There's

668
00:42:31,280 --> 00:42:33,960
joy in the intellectual conversation. And

669
00:42:35,640 --> 00:42:39,360
all the tastings I organize because

670
00:42:39,360 --> 00:42:42,520
I entertain my clients, I do tastings

671
00:42:42,840 --> 00:42:46,279
for institutions, different

672
00:42:46,279 --> 00:42:49,800
formats, and people enjoy

673
00:42:50,120 --> 00:42:53,800
drinking and tasting what I'm serving. But

674
00:42:54,280 --> 00:42:57,570
people like to talk. People enjoy the conversation.

675
00:42:58,050 --> 00:43:01,850
They want to listen, to participate. And some of the

676
00:43:01,850 --> 00:43:05,610
tastings I do in my cellar, I can't kick

677
00:43:05,610 --> 00:43:09,330
people out because. Not. Because they. Obviously they're enjoying the

678
00:43:09,330 --> 00:43:13,170
wine, but they enjoy the conversation.

679
00:43:13,650 --> 00:43:17,490
And this is what wine is about. Right. So if. If there's

680
00:43:17,490 --> 00:43:20,850
nothing to say anymore because everything is dumbed down,

681
00:43:21,090 --> 00:43:24,860
where's. Where's the conversation going, you know? Yeah, it's a

682
00:43:24,860 --> 00:43:28,540
really good point. It's a really good point. And I was annoying to see

683
00:43:28,540 --> 00:43:31,900
that word. We're gonna have to dumb down wine. Dumb it down. What is that

684
00:43:31,900 --> 00:43:34,940
saying about the people you're dumbing it down to? So that's

685
00:43:35,500 --> 00:43:38,860
another point. Right. You know, in the investment world,

686
00:43:39,260 --> 00:43:42,900
I'VE had some interesting people on the show. And I got a text not too

687
00:43:42,900 --> 00:43:46,580
long ago from a. Actually one of my good clients who is a great collector.

688
00:43:46,580 --> 00:43:48,740
He's got one of those sellers where you put your thumb on the thing and

689
00:43:48,740 --> 00:43:52,500
the door opens. And whenever I find an interesting vintage that comes our

690
00:43:52,500 --> 00:43:56,280
way or offer, I'm offered something from one of the suppliers that's

691
00:43:56,280 --> 00:44:00,040
unique. He usually takes up. Takes me up on it. But he

692
00:44:00,040 --> 00:44:03,880
sent me a picture of a recent dinner in, I think it was

693
00:44:03,880 --> 00:44:07,640
Singapore or Shanghai. And he's with Rudy, you know,

694
00:44:07,640 --> 00:44:11,440
the famed fake wine guy. And you know,

695
00:44:11,440 --> 00:44:14,800
I don't know if you know the whole story, but he is. The initial

696
00:44:15,920 --> 00:44:19,160
chink on the wall when he got busted was because he produced an

697
00:44:19,160 --> 00:44:22,640
1890 something burgundy in the chateau.

698
00:44:23,890 --> 00:44:27,410
Confessed they had never made that vintage. Yeah. And he got turned in. Right.

699
00:44:29,330 --> 00:44:32,850
So do you, do you. And then I had. Richie

700
00:44:33,170 --> 00:44:36,610
forgot his first name from Sotheby's on the show. And we've talked about

701
00:44:37,170 --> 00:44:40,690
how Sotheby's might vet wines. And

702
00:44:40,850 --> 00:44:44,690
he admitted that probably some fake wines got through even

703
00:44:44,690 --> 00:44:48,130
their scrutiny. And there's a lot more forensic

704
00:44:48,130 --> 00:44:51,290
opportunities now than there were in the old days to detect

705
00:44:51,690 --> 00:44:55,410
fake wine. But do you subscribe to

706
00:44:55,410 --> 00:44:58,250
this NFT and blockchain

707
00:44:59,450 --> 00:45:03,090
management of vintages with. Not only with wine, but Scotch and

708
00:45:03,090 --> 00:45:05,690
places, things like that? Not really.

709
00:45:07,930 --> 00:45:11,130
I think, I think all these. I think

710
00:45:11,530 --> 00:45:14,850
as long as there's not, I would say, a globally

711
00:45:14,850 --> 00:45:18,010
adopted protocol where all

712
00:45:18,010 --> 00:45:21,050
producers agree on, you know, the

713
00:45:22,440 --> 00:45:24,040
methodology of authentication.

714
00:45:26,120 --> 00:45:29,880
You know, if you use a blockchain, you have to use it from

715
00:45:30,920 --> 00:45:34,680
out of the gate. Right. If you

716
00:45:34,680 --> 00:45:38,440
buy a wine that has been traded two or three

717
00:45:38,440 --> 00:45:42,080
times and you put a, you know, you put your transaction on the blockchain, it

718
00:45:42,080 --> 00:45:45,640
doesn't change the fact that before you don't know what happened. Right. So it's.

719
00:45:46,440 --> 00:45:50,190
And so then if you

720
00:45:50,510 --> 00:45:53,310
acquire today only

721
00:45:53,550 --> 00:45:56,830
exclusively wines that are

722
00:45:57,470 --> 00:46:00,990
blockchain certified from day one today,

723
00:46:01,070 --> 00:46:03,790
while you're closing the door on the majority of the wines you would want to

724
00:46:03,790 --> 00:46:06,430
drink. Right. So it's a bit of a.

725
00:46:08,750 --> 00:46:11,870
I would say it's too young of a process

726
00:46:12,590 --> 00:46:16,430
to be able to implement it across all valuable

727
00:46:16,430 --> 00:46:18,880
wines. And. And again, we're talking about.

728
00:46:19,760 --> 00:46:23,160
Yeah, there would need to be a commonly

729
00:46:23,160 --> 00:46:26,800
adopted protocol, but try to get the French to agree

730
00:46:26,960 --> 00:46:30,720
amongst themselves. That's a tough one. Trying to get Italians

731
00:46:30,720 --> 00:46:34,160
in French to agree on. Forget it.

732
00:46:34,800 --> 00:46:38,560
It's not happening. Well, I think it's interesting. Sorry to interrupt you. I think

733
00:46:38,560 --> 00:46:42,160
it's interesting. I think there's certainly some value to it. At least

734
00:46:42,160 --> 00:46:45,960
it's stored properly and there's provenance there. But like you

735
00:46:45,960 --> 00:46:48,790
said, as soon as it is released from that, then

736
00:46:50,070 --> 00:46:53,790
all provenance is gone. And you have no idea. And there are

737
00:46:53,790 --> 00:46:57,590
limited number of winers that have taken up these blockchain companies

738
00:46:57,670 --> 00:47:01,270
to supply, supply. Plus it's sitting somewhere that you're not sure

739
00:47:01,750 --> 00:47:04,549
always about what it is. And the way I've handled it here,

740
00:47:05,670 --> 00:47:09,110
I think some people would have a great level of confidence and

741
00:47:09,110 --> 00:47:12,470
comfort using a Blockchain Company and

742
00:47:12,470 --> 00:47:15,110
NFTs to protect their wines. That's perfectly fine.

743
00:47:16,150 --> 00:47:19,890
My strategy here in Los Angeles has been that I only do

744
00:47:19,890 --> 00:47:22,450
business with really reputable known

745
00:47:23,810 --> 00:47:27,650
Bordeaux houses that, that are import. Like there's one here called

746
00:47:27,650 --> 00:47:31,330
Duclos, which is part of the Moex group. And I know

747
00:47:31,330 --> 00:47:35,090
those wines are coming direct from the wineries because of

748
00:47:35,090 --> 00:47:37,730
the, the trust factor, which is almost the same thing. Right.

749
00:47:38,930 --> 00:47:42,730
So that's important. Which, which kind of scares me

750
00:47:42,730 --> 00:47:46,250
a little bit. I did buy some Margaux a few years ago and I'm. The

751
00:47:46,250 --> 00:47:49,850
more I have discussed this, the more I realized I didn't buy

752
00:47:49,850 --> 00:47:53,550
it one of my regular suppliers. And so

753
00:47:53,870 --> 00:47:57,630
I have to assume it's real just because of the percentage, you

754
00:47:57,630 --> 00:48:01,470
know, play on that. But I didn't get it

755
00:48:01,470 --> 00:48:04,710
from Duclos, one of the guys I know. I mean, you would expect Southern Wines

756
00:48:04,710 --> 00:48:08,350
and Spirits, the largest supplier in America, to only have

757
00:48:08,830 --> 00:48:12,350
documented wines as well as R, D, C and some other players.

758
00:48:12,350 --> 00:48:14,430
But I thought it was an interesting feature

759
00:48:16,030 --> 00:48:19,300
and different than other blockchain ideas. But

760
00:48:19,780 --> 00:48:23,420
I can see people saying, look, I feel comfortable with it. They

761
00:48:23,420 --> 00:48:27,140
pay good money to do that. You have to pay off site storage, do that.

762
00:48:27,380 --> 00:48:31,180
Do most of your collectors have their own sellers that they store in

763
00:48:31,180 --> 00:48:33,380
or do you have them in Bond somewhere?

764
00:48:34,900 --> 00:48:38,460
They do both. Because most have, I mean, all wine

765
00:48:38,460 --> 00:48:41,380
investors are wine lovers. So they have

766
00:48:41,860 --> 00:48:45,380
either a seller at home, small or large.

767
00:48:45,620 --> 00:48:49,430
Depends on. And they have. And when they come

768
00:48:49,430 --> 00:48:53,190
to me, they actually open a storage account, professional storage account in Bond, so that

769
00:48:53,190 --> 00:48:56,870
they have the, you know, they have the two sides. Yeah. You know, it's interesting.

770
00:48:56,870 --> 00:49:00,390
I had not. I was not a collector. I had no interest in

771
00:49:00,390 --> 00:49:04,110
collecting. I was just, I was a vendor. I. I never

772
00:49:04,110 --> 00:49:07,590
had a seller of my home. I had a warehouse here with 30 or 40,000

773
00:49:07,590 --> 00:49:10,390
miles at any given time in it. And so what did I need a seller

774
00:49:10,390 --> 00:49:14,130
at home for? Right. And. But when I sold the company

775
00:49:14,130 --> 00:49:17,850
two years ago and during COVID since we did so well and people, you know,

776
00:49:17,850 --> 00:49:21,610
everybody was buying everything. I, I started to order some

777
00:49:21,610 --> 00:49:25,330
interesting wines, a lot of Grand Cru Burgundies and some classified growth Bordeaux

778
00:49:25,330 --> 00:49:29,170
and all kinds of interesting things. And the buyer of the company

779
00:49:29,970 --> 00:49:33,490
wanted none of it. They want none of it. They like. No,

780
00:49:33,810 --> 00:49:37,570
whatever you have that was for sale through the club subscription model.

781
00:49:37,570 --> 00:49:41,260
We'll take that. Which my average cost on those wines was

782
00:49:41,260 --> 00:49:44,860
three to four dollars. And we're not

783
00:49:44,860 --> 00:49:48,420
interested in anything in your cellar. And I built a cellar here at the office,

784
00:49:48,420 --> 00:49:51,700
which was, you know, obviously temperature controlled. Etc. So now

785
00:49:52,180 --> 00:49:55,780
I was going, whoa, I have like almost 3000

786
00:49:55,780 --> 00:49:59,500
bottles, 2800 bottles of wine that

787
00:49:59,500 --> 00:50:03,180
I had to find a home for. I don't have the space of my

788
00:50:03,180 --> 00:50:06,700
home. I was able to build a cellar that would hold about

789
00:50:06,700 --> 00:50:09,880
900 and now I have still about

790
00:50:09,880 --> 00:50:13,400
1800 here at the office under

791
00:50:13,560 --> 00:50:17,160
temperature control. And I'm not complaining. No, don't consider

792
00:50:17,880 --> 00:50:21,640
not complaining. But it's been fascinating to.

793
00:50:23,559 --> 00:50:27,200
It's kind of interesting. I never would have. Would have had a. Let's just say

794
00:50:27,200 --> 00:50:29,600
the average bottle of wine that we drink at home is probably over a hundred

795
00:50:29,600 --> 00:50:33,200
dollars. That would have never occurred during my days in

796
00:50:33,200 --> 00:50:36,960
business. Just. I wouldn't have done it. I sold wines that

797
00:50:36,960 --> 00:50:40,520
were $20 and that's what I had. But it's fascinating to

798
00:50:40,520 --> 00:50:44,240
taste through these things as I can now.

799
00:50:44,720 --> 00:50:47,680
I paid for them a long time ago, so it's, it's okay.

800
00:50:49,200 --> 00:50:52,920
But I was interested to, to know how your, how your customers typically do

801
00:50:52,920 --> 00:50:56,560
that, because I do. I had this conversation yesterday with this, this

802
00:50:56,560 --> 00:51:00,230
gentleman who was on the show who's a brilliant, brilliant man, I sort of

803
00:51:00,230 --> 00:51:03,670
mentioned at the beginning of the show, who just invested $300 million

804
00:51:03,990 --> 00:51:07,510
in Salt Dominion, in some vineyards and some. And. And

805
00:51:07,910 --> 00:51:11,470
mentioned to me he threw away his first vintage. Just tossed it. Didn't even sell,

806
00:51:11,470 --> 00:51:14,150
didn't resell the juice, just tossed it.

807
00:51:15,110 --> 00:51:18,550
And I thought, well, how, how committed,

808
00:51:18,710 --> 00:51:22,510
you know, to this industry to invest that kind of money? I mean, what

809
00:51:22,510 --> 00:51:25,910
do you think? You're never going to get it back? Probably, right?

810
00:51:26,260 --> 00:51:29,180
Probably. Probably a good chance of that. So what's the next step for you as

811
00:51:29,180 --> 00:51:31,620
you navigate this industry? Are you.

812
00:51:32,500 --> 00:51:35,780
Branch, you said you put on tastings and you invest

813
00:51:35,860 --> 00:51:39,620
collectors, you invite. Is there any on Horizon

814
00:51:39,620 --> 00:51:43,300
you're looking at venturing into in this industry or just perfecting what

815
00:51:43,300 --> 00:51:46,420
you're doing? Yeah, there's these

816
00:51:47,220 --> 00:51:50,820
various projects, discussions going on,

817
00:51:50,820 --> 00:51:54,110
and there's a lot of appeal from

818
00:51:55,790 --> 00:51:59,550
the financial areas in Geneva, Switzerland,

819
00:51:59,870 --> 00:52:02,430
banking world. A lot of interest

820
00:52:04,270 --> 00:52:07,710
for them to offer wine investment to their clients

821
00:52:09,790 --> 00:52:13,470
for a variety of reasons, status reasons and

822
00:52:14,510 --> 00:52:18,310
diversification, and also as a way to offer

823
00:52:18,310 --> 00:52:21,920
something else than a dot on. On a trend line.

824
00:52:22,080 --> 00:52:25,560
So it's also. That's what they've been telling me. I'm not

825
00:52:25,560 --> 00:52:29,400
inventing. We don't have any. We basically. We don't have

826
00:52:29,400 --> 00:52:33,120
anything sexy to sell to our, our clients. You know, we're

827
00:52:33,120 --> 00:52:36,960
always saying the same, you know, mixture of stocks, et cetera, et cetera. So

828
00:52:37,600 --> 00:52:40,960
if we could offer some, some wine investment, you know, that would be helpful because

829
00:52:41,200 --> 00:52:44,960
that would provide some, you know, some appeal and. But it's,

830
00:52:45,920 --> 00:52:49,280
but it's difficult to

831
00:52:49,280 --> 00:52:52,920
standardize and scale collections of

832
00:52:52,920 --> 00:52:56,000
very rare items. You can build

833
00:52:56,720 --> 00:53:00,160
funds with a lot of Bordeaux because they're produced in large

834
00:53:00,160 --> 00:53:03,880
quantities and they're rather liquid, but then the performance is

835
00:53:03,880 --> 00:53:06,960
not that great. So that doesn't work either. Right. So

836
00:53:08,720 --> 00:53:12,520
there's discussions in that direction that might be one of the

837
00:53:12,520 --> 00:53:16,270
next projects to come. Come alive. Yeah, rather. Was

838
00:53:16,270 --> 00:53:19,590
that rather liquid? A pun? Say again?

839
00:53:20,630 --> 00:53:23,750
Was that a pun? That Bordeaux investment's rather liquid.

840
00:53:24,310 --> 00:53:28,110
So actually, I'm going to finish with this thought

841
00:53:28,110 --> 00:53:31,710
and we'll just discuss real fast. We're already out of time. But there's

842
00:53:31,710 --> 00:53:35,110
been, over the years, through my career, one in particular

843
00:53:35,350 --> 00:53:39,110
in America and California in particular, this group of,

844
00:53:40,570 --> 00:53:44,250
of of investors, Well, I guess they were investors

845
00:53:44,490 --> 00:53:48,210
that were going around, they're buying pallets and pallets of things and nothing, nothing of

846
00:53:48,210 --> 00:53:51,850
any pedigree, just wines that they expected to go up in value

847
00:53:52,250 --> 00:53:56,010
as they store them. And you paid these people to buy these wines for you,

848
00:53:56,170 --> 00:53:59,970
and then you would, they

849
00:53:59,970 --> 00:54:02,850
would hold on to them for you, and then they would claim that they would

850
00:54:02,850 --> 00:54:06,530
resell them in the future to restaurants

851
00:54:06,530 --> 00:54:09,890
or retail. And it, it failed

852
00:54:09,890 --> 00:54:13,650
miserably. In fact, it failed so much that at the Wine of the Month

853
00:54:13,650 --> 00:54:17,410
club, I was able to make a fair amount of money buying

854
00:54:17,410 --> 00:54:20,770
them back from them at pennies on the dollar, what they paid.

855
00:54:21,250 --> 00:54:24,690
And here I am now offering these incredible invested,

856
00:54:24,690 --> 00:54:28,530
incredibly aged wines that were not of any pedigree, but just nicely

857
00:54:28,530 --> 00:54:30,530
positioned as a quality product.

858
00:54:32,200 --> 00:54:34,680
Because people bought off on this idea of just

859
00:54:35,640 --> 00:54:39,000
buying wine, aging it and it getting more valuable.

860
00:54:39,640 --> 00:54:43,360
And nothing can be further from the truth, at least at

861
00:54:43,360 --> 00:54:47,200
this, at least this level of wine. And here

862
00:54:47,200 --> 00:54:49,400
we are. You're able to show,

863
00:54:51,480 --> 00:54:54,920
and I think wine. Didn't wine outperform the stock market?

864
00:54:55,160 --> 00:54:58,330
It did. Yeah. I did. For

865
00:54:59,770 --> 00:55:02,730
especially during the 2016, 2022 period.

866
00:55:03,850 --> 00:55:07,050
But what is really important is to understand that

867
00:55:08,730 --> 00:55:12,530
there's no magic. Every asset evolves by

868
00:55:12,530 --> 00:55:16,250
cycles. There are periods that are more favorable, others that are less

869
00:55:16,410 --> 00:55:19,850
favorable. It's a little bit more volatile

870
00:55:20,090 --> 00:55:23,930
than one would think. The fine wine investment market,

871
00:55:24,650 --> 00:55:28,250
which is a good thing because it offers windows of opportunity

872
00:55:28,650 --> 00:55:32,430
to the space. And also I think that the

873
00:55:32,430 --> 00:55:36,150
most important thing to have in mind is that investment grade wines and those that

874
00:55:36,230 --> 00:55:39,190
really have the potential to perform are

875
00:55:39,830 --> 00:55:43,630
so, so small in terms of volumes versus what

876
00:55:43,630 --> 00:55:47,230
is produced at global scale, that just to piggyback

877
00:55:47,230 --> 00:55:51,030
on that story you told, you just shared is,

878
00:55:51,030 --> 00:55:54,830
no, you cannot just go out and buy pallets of wine and Hope that

879
00:55:54,830 --> 00:55:57,750
in 10 years you'll sell them at a better price. There's

880
00:55:58,590 --> 00:56:01,470
most wines, the vast majority of the wines,

881
00:56:02,510 --> 00:56:05,230
they will not take any value over 10 years.

882
00:56:06,190 --> 00:56:09,790
It's just because there's too much volume, because

883
00:56:09,790 --> 00:56:13,550
there's no global traction, because it's not of a

884
00:56:13,550 --> 00:56:16,510
certain pedigree. It doesn't have status for many reasons.

885
00:56:17,150 --> 00:56:20,870
So picking the right items

886
00:56:20,870 --> 00:56:24,670
is quite a complex job

887
00:56:24,670 --> 00:56:28,260
and it requires a lot of knowledge of data.

888
00:56:28,740 --> 00:56:32,420
And even there, you can also go wrong.

889
00:56:32,820 --> 00:56:35,780
We're going to leave it that great thought and what a pleasure to have you

890
00:56:35,780 --> 00:56:39,140
on the show and have a chance to talk about this segment of our industry,

891
00:56:39,140 --> 00:56:42,980
because it's an important one and it brings value to the industry

892
00:56:42,980 --> 00:56:46,580
and to your client base. It's been fascinating. I hope we can do it again.

893
00:56:47,380 --> 00:56:50,820
Likewise, Paul. It's been enjoyable. Thank you so much.

894
00:56:52,020 --> 00:56:55,730
I look forward to more controversial posts. Yeah, yeah, there'll be a few.

895
00:56:57,170 --> 00:56:59,770
Yeah, there'll be a few. There'll be a few. I have some ideas coming up,

896
00:56:59,770 --> 00:57:03,250
so. And I love them. I mean, it's great talking and seeing everybody

897
00:57:03,570 --> 00:57:07,010
jump in. It's good. Yes.

898
00:57:07,090 --> 00:57:08,530
Cheers. Thank you, Paul.