The trials of the Burgundy wine merchant

Succeeding as a trader is a difficult feat – and doing so in one of the most sought-after (and expensive) regions in the world only adds to the difficulty.

Burgundy has always been a place where the small independent trader was vitally important – historically more important than the producer, although this is changing in the current era of superstar estates and big trading companies cornering the market.

Wine-Searcher spoke candidly with merchants about the trials and tribulations of landless vineyard making in Burgundy. It was not easy.

I have asked many producers to speak with me on this subject and because of the fragility of some of the subjects, I imagine, the most declined. Many thanks to Loïc Lamy and Nick Harbor for speaking so honestly about this delicate subject.

General availability

Loïc Lamy founded his Burgundy wine merchant project, Vins Saison, with his friend Eric Pignal (current winemaker at Domaine Simon Bize, and formerly at Château de Pommard) a few years ago. He reveals that the couple buy both juice and fruit, although buying fruit is always better, as there is more control over the process at the base – i.e. starting in the vineyard or directly from the vineyard rather than after pressing in the cellar.

In years like 2021, Lamy was only able to produce 30% of his usual quantity of wines; when fruit quantities are low, producers usually meet their needs first. “In a catastrophic vintage, it is very difficult to find fruit to buy, especially for those like us who only source from organic / biodynamic grapes”, explains Lamy, specifying that some producers are ready to sell, but to a much higher price.

Expats Nick and Colleen Harbor founded their eponymous Savigny-based trading company in 2013. Much like Lamy, the couple still prefer to work with fruit, although tough decisions often have to be made. “Buying juice is difficult, just because it’s juice – is it Montrachet juice or is it prune juice from the orchard down the road? He said, stressing the need to buy from trusted friends and reputable producers. “You have to be very careful when buying juice from people – know when they are harvesting, how they are squeezing, etc. ” he says. Harbor reveals he’s not against buying juice in the right situations, especially during tough years.

Coherence of programming

For many, the decision to buy juice may be a matter of survival, consistency of the lineup, or both. Harbor explains that in 2021, its benchmark supplier of Chassagne-Montrachet had no fruit to sell. “There was an opportunity to buy half a barrel of juice elsewhere, and I said okay, because it keeps the appellation in our range,” he says.

Although receiving offers from anyone is never the strategy. Similar to Lamy, Harbor works with a trusted broker, who has scoured the region to find a Chassagne-Montrachet that meets his standards. “Sometimes it’s not the best vintage ever and you just have to take the risk,” he says. “The point is, he’s given us 150 bottles of a wine we’ve been producing every year since 2017, and if we hadn’t trusted our broker, he would have vanished entirely in 2021.”

Others just prefer to take the loss, although they are in a position to do so. “On our side, we choose not to buy, because we believe that there must be a direct link between the price of the bottle and the quality of the wine,” he says. “There’s no point in selling a Saint-Véran for 40 € in France. (Note: Lamy explains that he and Pignal are able to bear this loss, as their trading project is a side business and the two maintain stable incomes through external day jobs. For Nick Harbor, his trading company is its main source of income.)

Continuously rising prices

In addition to general availability, the price of fruit / juice represents an equally important challenge for regional traders. Harbor reveals that in 2013, the Corton Charlemagne Grand Cru was at € 7,000 per barrel; today it sells for around € 35,000.

“Likewise, Bâtard-Montrachet is betting on more than € 80,000. When I started it was probably no more than € 10,000 to € 12,000, ”he says, and even the low end is affected. “They are talking about the doubling of Mâcon-Villages this year,” says Harbor, adding that what once sold for € 1,000 is now going to € 2,000.

Lamy notes that on top of all this, the price of fruit is never exactly black and white. “When you buy from a producer through a broker, you don’t know the exact purchase price. It’s an estimate because the price is regulated,” he explains. From there, the final number is based on the volume, and then a lot of transactions are done. “You usually pay in three settlements. The last will be the one taking into account price variations, ”he explains.

© Wikimedia Commons
| The price of Grand Cru Corton-Charlemagne grapes has quintupled over the past eight years.

Quality control

Overall, one of the biggest risks of working as a trader is the certainty of quality control. While some winegrowers are happy to let their buyers participate in the occasional work of the vineyard, most purchases are based on trust. In addition, traders are at the mercy of the generosity of their sellers. “No one is shouting ‘This is my best fruit, come buy it!’ during harvest, “says Harbor. However, when working with quality growers, even the second-best fruit is often better than the best offered by conventional estates.

For those working with a low intervention mindset, it’s even more complicated. “It’s hard to buy unsulphured juice, so you really have to have a good (and honest) relationship with the producer,” says Lamy. And the question of prices does not stop with the producer. “Your wines will always be more expensive than a regular winemaker,” says Lamy, revealing that some of his suppliers wanted more than 30 percent of the fruit price in 2021. “If the end product is too expensive, everyone has look bad in the finish. “

Strong and growing competition

Contrary to popular belief, competition with estate-bottled wines is actually not the biggest problem for small merchants – it is with the estate’s trading bottles themselves. Harbor reveals that when he and Colleen registered their business there were a few hundred registered merchants in Burgundy; today there are thousands of them – many of which belong to real estates. This poses a plethora of problems for small businesses trying to buy fruit, especially in high-end appellations.

“For example, our guy from Chassagne-Montrachet can trade his fruits for our guy from Corton Grand Cru, and then they both make these respective wines as merchants,” says Harbor, sharing that Burgundy is now inundated with merchants owned to the domain. “As there are more and more buyers in the pool, the price continues to rise,” says Harbor. For those who can trade, price is not an issue; for the little guys who have to buy, the change is detrimental.

Why Burgundy?

Lamy thinks that working as a merchant elsewhere would probably be easier, although he prefers the wines and lifestyle of the region. “The style of the wines here is more drinkable, the emphasis is on tension and acidity. We never tire of these wines,” he says, also citing the location of the region – two hours from Paris. , Geneva and Lyon – as a plus. .

For expats like the Harbors, finding a place with a strong trader culture – as well as reputable appellation status – was key.

“We took a huge risk quitting our jobs and diving into winemaking, so we figured if we made a bad wine in the first year, we would still be able to sell it because of the appellation on it. ‘label,’ he says. While this business plan certainly wouldn’t work in the long term, Harbor is right about the notion of a household (and prestigious) name selling itself.

“Someone once told me that every person who started making wine in Burgundy was capable of being successful, which is probably true, and that’s why,” says Harbor, adding that the initial risk is relatively low, because the name of the appellation will allow you at least reimbursement of your initial investment. However, with growing concerns about demand, pricing and availability, only time will tell.

Future of the Burgundian merchant

While there will likely always be a market for Burgundy, it is not clear who will ultimately run the region. Harbor wonders if bigger traders with bigger budgets will take over and crush smaller businesses.

“It is sure that little guys like us will not make it out alive, as we are perpetually squeezed out by those with bigger budgets, but other areas with trading companies, who have the best coverage on the markets. price in what they can exchange, will probably be able to continue, ”he said.

The answer? Buy your own vineyards and step into the playground of estate bottling – and potentially secondary trading. “For us the only way to be sure of our future is to buy vineyards, so we can be the guy who trades fruit for fruit, but the price of vines goes up so high that only the super-rich can. afford it, ”Harbor says.

It seems only time – and money – will tell.