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Shortening the distribution chain

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A version of this article is published by the Financial Times. 

It may not look like it to judge from the prices, but the producers of the most famous wines in the world have a problem. 

Now that their trophy bottles have definitively moved into the luxury goods category, they are obvious targets for speculators (as well as counterfeiters, but that is another story). The problem their producers have is to find, and pamper, those who will actually drink the stuff rather than trading it.

This is not only desirable from the point of view of encouraging winemakers to continue to fine-tune quality, it can cut out many of the middle men that weigh heavily on the fine-wine distribution chain. A major reason why the ex-cellar prices of fine bordeaux and burgundy have risen so steeply recently is that producers have seen how much others further along the chain have made from selling their wines. The revenge of the propriétaires!

LVMH’s recent launch of Clos19, a website selling their top champagnes, wines and spirits direct to consumers, is evidence of this phenomenon, albeit many a year later than Net-à-Porter imposed a similar model on the fashion business.

The site was ‘conceptualised’ by LVMH founder Bernard Arnault’s UK-based niece Stéphanie and is designed to offer not just the fanciest bottles of Dom Pérignon, Château d’Yquem, Ardbeg and Hennessy but also, including at least two of my least favourite words, ‘a bespoke selection of exclusively curated experiences ranging from intimate tastings with brand ambassadors and cellar masters to once-in-a-lifetime journeys'. The last of these apparently include a submarine trip to view the remains of the Titanic. Well-oiled, presumably.

And the name Clos19? It apparently ‘figuratively celebrates the most iconic aspect of the clos – the gateway which is a metaphorical gateway welcoming people into the world of the champagnes, wines and spirits of the LVMH group. 19 is the homage to the development of the art de vivre in the 19th century; the democratisation of champagne, wine and spirits.’

The aim is for delivery within 24 hours, and ‘chilled delivery’ in due course.

Clos19 has just been launched in the UK and the plan is to extend the logistics to Germany in June and the US in the autumn – although the post-Prohibition regulations governing the distribution of alcoholic liquid in America may keep legions of LVMH employees busy for years.

This is by no means the only way in which LVMH is attempting to cosy up to its end-consumers and create a community of enthusiasts, squaring the circle of brand promotion. The wines of Château Cheval Blanc, the top St-Émilion, are available via Clos19 but Cheval Blanc is also the brand name of a small but growing group of luxury hotels (called ‘Maisons’) also owned by LVMH. Democratisation does not feature strongly in the Maisons’ sales pitch.

On its own account the LVMH champagne house of Krug is at the forefront of direct digital communication with its customers. This august house, and Olivier Krug himself in particular, is a heavy user of Twitter and Facebook Messenger, and anyone who sends them a technical query has it personally answered by a member of the winemaking team.

Arnault’s great rival François Pinault has long put considerable effort into connecting the fine wines of his Artémis group with potential consumers. Deep in the bowels of the recently reconstructed chai of Bordeaux first growth Château Latour, which looks far more like a luxury hotel than anything to do with wine production, is a glamorous, glistening dark chamber that might be the nightclub of said hotel. Here lockers of the rarest vintages and formats can be browsed by particularly well-heeled visitors.

And close to London’s financial district at Ten Trinity Square overlooking the Tower of London, the Pinault team has designed both the space and the wine list of the private members’ club that opened last week to showcase the group’s wines, and provide an environment in which they can entertain customers. Handpicked organic wines supplement those of the group’s own properties such as Domaine d’Eugénie of Burgundy, Château-Grillet of the northern Rhône and the Eisele Vineyard in the Napa Valley, where producers of cult Cabernets have long had the luxury of selling direct to loyal customers via mailing lists.

Other first-growth owners, or their progeny, are getting in on the act. Prince Robert de Luxembourg of Château Haut-Brion has been expending considerable energy on Le Clarence, a particularly smart Michelin-starred restaurant and upmarket wine shop in Paris.

Alexandra, daughter of Château Margaux owner Corinne Mentzelopoulos, has just opened a wine bar in London, Clarette. Her mamma is at pains to stress that this is her daughter’s personal enterprise rather than a Margaux-led initiative, but seven of her wines are available by the glass.

Clarette, in a decidedly unbordelais half-timbered reconditioned pub in Marylebone, is but a stone’s throw from another incursion into the vibrant London dining scene by a Bordeaux château-owner. The Gardiniers own St-Estèphe wine estate Phelan-Ségur but also the famous restaurant Taillevent in Paris. Its offshoot, Les 110 de Taillevent, offers 110 food-matched wines by the glass and has spawned a London branch just behind John Lewis.

Bernard Magrez recently added Bordeaux’s most garlanded restaurant, La Grande Maison, to his quiver of wine-producing châteaux, following in the footsteps of Gérard Perse of Ch Pavie and the Cazes family of Lynch-Bages, who have long been in the Bordeaux restaurant business too.

And the second-growth owner Michel Reybier recently converted part of Château Cos d’Estournel in the Médoc into La Chartreuse to add to his collection of luxurious accommodations in Switzerland, Provence and Paris. I could tell you more about it if I didn’t have to sign up as a ‘private member’ to access its website.

From the consumer’s point of view, these direct sale initiatives offer irreproachable provenance even if not knockdown prices. And for the producers there is the allure of identifying end-users and their email addresses, offering them more personal service and experiences, and making more money out of the whole operation.

In a slightly different move, the owner of Petrus, the famous Pomerol estate, has opened La Vinicole in lofts in Soho, New York and LA’s Arts District as well as in Paris. The aim here is not so much to appeal to billionaires as to educate those who sell wine to them. This branch of the Moueix family has a significant stake in a number of Bordeaux merchants and their intention is to revitalise the image of the wines of bordeaux in key American markets whose sommeliers have shown a regrettable tendency to see them as passés.

SOME DREAM VINTAGES
Here are some favourite vintages of these trophy wines that are still available. Tasting notes can be found in our database. Stockists, other than clos19.com, on wine-searcher.com.

Champagne

Dom Pérignon 2002
Krug 2002

Bordeaux Châteaux

Cheval Blanc 1990
Cos d’Estournel 2010
Haut-Brion 2005
Latour 2001
Lynch-Bages 1982
Margaux 2000
Pavie 2010
Petrus 2010
Phelan Ségur 2010
Yquem 2001

Rest of France

Domaine d’Eugénie Grands Crus 2012
Château-Grillet 2014

California Cabernet

Eisele (was Araujo) 2013