Michael Fridjhon: Wine and rarity
By Michael Fridjhon, 15 September 2021
If you wander around any smart whisky emporium you will find no shortage of special bottlings, sometimes from single quarter casks where the total listed production is around 60 bottles and the selling price proportionately (or disproportionately) more expensive. Life in the whisky trade was not always thus: only a few decades ago, the real business was in so-called proprietary brands – blended whiskies assembled to a house style whose consistency was vastly more important than the variations imparted by single barrels.
Fifty years ago the same observation might just as easily have been made of the fine wine trade, both domestically but also of most Old World appellations. Nederburg Selected Cabernet was considered more desirable (using price as the arbiter) than any of the very few so-called estate wines in the market. In Burgundy, negociant wine – single appellation but often blended from several sites within the origin – often sold for more than grower bottlings.
To be clear, I have no nostalgia for this bygone era: lumping together the best and the worst within a legally demarcated zone can never be the route to vinous perfection. But this doesn’t mean that the pendulum hasn’t traveled way beyond its arc in the opposite direction. Just because a wine (or a whisky, or any object of aesthetic indulgence) is rare and/or in short supply it doesn’t mean that it’s great – or even good. And now that market-savvy vignerons have worked this out, the only commodities not in short supply are releases based on the concept of contrived shortage.
The cult of cult wine, of single site bottlings, of single cask releases, has redefined the concept of luxury in the liquor trade. The shift has moved away from an objectively defined statement of rarity – the last bottles of Macallan 1926, the last (or almost last) bottle of 1821 Constantia, the final bottle of 1811 “Year of the Comet” cognac – to a much more subjective definition: 100 point Parker clarets from the 1982 Bordeaux vintage, single batch “whiskies of the year,” single barrel bottlings selected by the winemaker and presented in ebony boxes lined in hand-tooled leather.
If this is all smoke and mirrors, you might ask, then how come it is now so entrenched? You can fool some of the people all of the time and all of the people some of the time – but to fool all of the people all of the time pretty much defies a law as universal as gravity.
It’s easy to understand how and why the trend started: the act of identifying the best sites (or best casks) and offering them as a separate selection was – at the outset – both objectively as well as subjectively appealing. Parsing the component parts and ditching the junk made for a better product, which in turn justified the higher price and vindicated the effort.
But then a curious thing happened: the concept of luxury changed, and it changed because there was a dramatic shift in the nature of the consumer community. For most of the 20th century, the idea of tangible rarity prevailed: soft leather and superfine fabric, for example, items which were difficult and expensive to produce. Supply and demand were in reasonable balance: a relatively small number of people with the necessary wealth, a finite supply of acknowledged luxury items.
Then, in most developed country economies from sometime in the 1980s, the segment of society which had real disposable income grew exponentially. At much the same time modern technology helped to increase the availability of these erstwhile rarities. What used to be seen as luxury became commoditised, “forcing” those who wished to display their new-found wealth to seek more curated objects and experiences. This is what we are now witnessing: the super-rich indulge in high-profile, short duration space travel, while the more conventionally wealthy must make do with rare wines, rare whiskies, and money-can’t-buy experiences closer to earth.
There is a vast gap between being rich enough to own a few homes, perhaps your own yacht or private jet, and ticking “space travel” on your bucket list. For those who have more wealth than they can reasonably consume, without having enough money to book a trip to somewhere else in the galaxy, rare wines and spirits offer the perfect way to announce your arrival. The only problem has been that the supply of the truly rare can never keep up with the burgeoning demand. Thus commercial necessity has given the market a wholly new concept – contrived rarity – and the wine industries of the world have risen nobly to the challenge.
Fifty years ago a bottle of Romanée-Conti cost R20 and a bottle of Nederburg Cabernet a mere R2. Now the Nederburg costs R150 while the Romanée-Conti sells for over R200k. The Rand has lost value of course – its buying power today is around 10% of what it was in 1971. There’s also been inflation: but even if you multiply the price of the Romanée-Conti by 75 (the Nederburg inflation index) and then by a further 10 (to account for Rand devaluation) you can only get to R15k. What has changed has been a massive increase in the demand for wine collectables. And since the size of the Romanée-Conti vineyard cannot increase, you have all that it takes to create the perfect bull market.
Romanée-Conti is real rarity. However, since for many people owning a bottle is out of the question, the wine market has created a wide range of more affordable alternatives. Some of them are genuinely rare expressions from unique sites with the potential in time to rival the appeal of Romanée-Conti, others are more cynically contrived. Mostly we know the difference, even if we don’t always admit it. The genuine article cannot be reproduced, so it doesn’t require fancy packaging to make its point; the contrived collectable needs all the help it can get. The quality of the true rarity is evident even when tasted blind; “statement” wines depend on their branding to convey their sense of quality. The long-term price index of rarities always increases; cult collectables are bubbles waiting to burst.
Does this mean that the game is up for the hype engineers, the vinous illusionists? I doubt it: as long as people want to buy snake oil, there will always be snake oil, and snake oil salesmen.
- Michael Fridjhon has over thirty-five years’ experience in the liquor industry. He is the founder of Winewizard.co.za and holds various positions including Visiting Professor of Wine Business at the University of Cape Town; founder and director of WineX – the largest consumer wine show in the Southern Hemisphere and chairman of The Old Mutual Trophy Wine Show.
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