For this 45th episode of the Wine Makers Show, the wine podcast, I went to meet Quentin Chaperon, head of Château relations at U’Wine. Quentin’s job: pick the best crus on the planet to slot into the wine cellars of U’Wine clients. In this interview, Quentin walks us through the fundamentals of wine investing and shares the best strategies to build a cellar worthy of the name.
Can you start by introducing yourself?
Quentin: No problem. My name’s Quentin Chaperon. I’m 33, I’ve been a passionate wine lover since I was 14-15, and even more so since I was 22-23. That’s roughly the age I discovered there were wines beyond Bordeaux. I love the very eclectic side wine can offer. I’ve been lucky enough to make it my job and I’m thrilled to be living off my passion today.
Can you tell me more about your passion for wine? How did it kick off at 15-16 as you mention?
Quentin: It’s actually more around 14. I wanted to go on vacation with friends and my parents told me: “Yeah, no problem.” So I told them: “But for that I’d need money.” And they answered: “That’s great, but money is earned.” So I went to work in the vines for cousins who are winemakers in Entre-deux-Mers, in Saint Émilion. I worked in the vines during the day, a bit in the cellar in the afternoon, and in the evening my cousins would say: “Want to taste a tank?” Two tanks, three tanks… I figured it was interesting and I started with the technical side. I tasted tanks that aren’t necessarily the easiest wines. I immediately had tons of questions. It came like that. I worked every summer until I was 21 or 22, a month and a half in the vines. I joined the oenology club at my school. I realized there were wines beyond Bordeaux. That added complexity and interest for me with different grapes and that side of vintage renewal. I pushed the vice as far as marrying a Burgundian. My dad told me: “Oh really, you’re making peace with the enemy.” Antoine: Was she the one who introduced you to other vineyards like Burgundy? Quentin: No. I discovered that at school before meeting her. But she has very strong ties to Burgundy. I’m lucky to taste old Burgundies at my in-laws’, wines I didn’t taste much before.
What happened between leaving school and now? Did you jump straight into the wine world?
Quentin: No, because there was about a 10-year gap. I was no genius. I went to a business school specializing in corporate finance. I started doing risk management at BNP. And the banking sector is very controlled. Risk is even more controlled. I realized everything I did was checked by my N+1, then by my N+2, then by my N+3. At some point, I told them: “Listen, just do it yourselves, everyone will save time.” They told me: “But no, you understand we can’t do it that way.” That’s when Thomas, who created U’Wine, came looking for me because of my obvious appetite for wine. I gave him a hand and then he said: “Listen, if the project appeals to you, let’s partner up and go together.”
How did you actually meet Thomas? Were you school buddies?
Quentin: No. He’s a bit older than me but we’ve known each other since we were born because our grandfathers were very close. They were both from Saint Émilion, our parents are very close. We went on vacation together when we were little. He’s actually more of a friend of my older sister.
What did he tell you when he came looking for you, and what convinced you?
Quentin: It was the overall project that convinced me. The idea that by buying a bit more than what you need to drink, you could finance part of your cellar. I found that, one, very smart, and two, very interesting on a personal level.
Can you actually explain what U’Wine is? We’ve been talking about it since the start of this episode but before going deeper, can you tell us what it is for those who don’t know?
Quentin: So U’Wine is a next-generation négoce company. We build and manage the cellars of private clients worldwide. So that goes from purchase, to logistics, storage, resale, or delivery. We started in Bordeaux since we’re from Bordeaux. When you want to build a cellar in Bordeaux, the best way to buy cheaper is en primeur. We buy wines en primeur, which we store on behalf of our clients. We have an advisory role on top. After 3, 5, 8, 10 years, we’ll tell them: “This bottle has performed very well, we tasted it not long ago and it’s not so extraordinary at tasting, so let’s resell it. Conversely, this bottle hasn’t performed but it’s super good, we’ll deliver it to you.” The client decides, of course, but that was the principle at the start. When you love wine, building a Bordeaux cellar is nice but not enough. We started going to other regions to meet winemakers, buy wine from them. And we started going to Burgundy, the Rhône Valley. Today we buy a few wines in the Loire Valley, in Languedoc, quite a bit in Piedmont in Italy, a little in Napa Valley. Antoine: I have to tell you I’m not yet a U’Wine client, but I do buy wine en primeur.
En primeur is a pretty special moment in Bordeaux during which all the châteaux open up and you can buy newly harvested vintage wine that will officially be commercialized and bottled a year and a half, two years later. So you get a discount on the wine price.
It’s a bit special because you buy it tax-free, then you have to add the delivery costs to where you store it. But there are a lot of merchant houses that do this. As a private buyer it’s something you can do to build a cellar. It’s a good way to get access to certain Bordeaux crus that are pretty nice. There’s a financial side to en primeur, since there’s a discount on the wine price. It’s supposed to go up just after. Quentin: Absolutely. So a discount depends on the vintages and the properties, but when you want to build a cellar you have to be the first buyer of the new vintage with potential. And in Bordeaux of course that goes through en primeur, through what we call “allocations.” These are the access to certain properties or estates in Burgundy, in Piedmont, in the Rhône Valley… The goal is really to be the first buyer. We then have the guarantee of where the wine comes from and we pay the lowest possible price. Telling no one anything new here, but for wine there’s a scarcity phenomenon that builds because bottles get drunk and destroyed and great wines improve with time. Antoine: Which means there’s less stock and therefore a price that’s supposed to rise. So at a stretch, in Bordeaux I can fairly easily understand how you were able to get into the market because the en primeur system is something that’s been ingrained pretty much forever, so it’s relatively easy.
I have this view that estates are maybe a bit more closed, rare, hard to approach sometimes. How did you go about unlocking your first allocations?
Quentin: I don’t remember anymore. But what’s certain is that what interests great wine producers is controlling their distribution. The U’Wine model lets them meet the end client. When we bring clients to a property, we bring them people who bought their wine and who potentially will drink it. And that interests estates and châteaux a lot. They’re tired of bottles leaving and going around the world without ever being drunk. We have near-total transparency. Not on client names but on location. We’re very transparent with the estates. That’s part of what attracts them. Antoine: There are two elements in your model. The investment side, but also the pleasure side of saying: “Pay for part of your cellar by paying a bit more at the start, but in the end it’ll come back to zero. You may even make a small profit on the wines you drink.” Quentin: The idea is to finance your cellar for free. You have to be rigorous in selecting wines, in a whole bunch of things. In storage, finding the way to resell at the highest price. If you buy en primeur and resell to another négociant 5 or 8 years later, the gain isn’t great and the added value for the property is zero. The goal is to create that downstream distribution market, of wine lovers and consumers we’ll deliver mature wines to. Antoine: It’s two-tier négoce. First when the wines are released, and then on the secondary market directly to enthusiasts.
Can I come to U’Wine and say I’d like, for example, a Pontet-Canet 2010?
Quentin: Absolutely. We have a mobile app on which we have customers who come just to buy wine as wine lovers. The nice thing is the bottle’s origin is guaranteed. It’s convenient for the customer who gets their bottle delivered with a mature wine they’re sure of the provenance, and for the investor who wants to resell to us to generate a gain. In that case we’ll find a consumer who’ll have the chance to buy a mature wine without needing to store it etc.
How do you store the wine? It’s an important element in conservation
Quentin: Of course, it’s even essential for resale. That’s why we don’t deliver to investor clients, because we want to be sure to control this chain from start to finish. For tax reasons we send the wines to Switzerland for a year, and then we store at Bassens, in the Bordeaux suburbs, with a bonded warehouse keeper whose job that is. Antoine: Isn’t there a giant warehouse in Switzerland with nothing but wine inside? Quentin: Yes, it’s called the Geneva Free Port. It’s actually a duty-free zone. There’s 80% art, 10-15% wine, 3-4% cars and 2% cigars. It’s only rich collectors storing things there. Antoine: I don’t remember who told me about it in an episode where we talked about logistics in wine, and you must live it too, but everyone tells me it’s a nightmare. And we did mention this Swiss zone, it sounds spectacular. Quentin: It’s spectacular. I’ve been there twice, and once we walked in and there were three Bugatti Veyrons lined up in the courtyard. Then we went down to the cellars, there are mountains of wine and it’s pretty impressive yes.
Isn’t this still something you can do yourself? I buy my wines, I store them, I get my case of 6 or 12 bottles, I resell 8 or 10 bottles and I drink 2.
Quentin: So you can do it yourself, but it has a stack of disadvantages compared to going through U’Wine. The first is that you’ll buy the wines and have them delivered, so you’ll pay VAT. And when you resell them, you’ll resell them tax-free, so you start an investment and you’ve already lost 20%. We’re far from a great deal. Then, you’ll resell at a lower price because you won’t be able to prove how the wines were stored. After that, you have to find a player who’ll resell your wines, who’ll also take a margin. Or you’ll resell at auction but that requires time, involvement etc. And the last aspect, which is the most important to me, is that today, if I tell you to name three Bordeaux wines with great gain potential, there are 2 chances out of 3 it’ll be three wines you shouldn’t invest in. There are some very big brands in Bordeaux whose wines we don’t buy. Not for quality reasons but because our investor clients won’t get their money back.
How do you spot this kind of good deal?
Quentin: In wine selection at U’Wine, there are three profiles. There’s what we call “The Legends,” which are the first crus classés of Bordeaux, the Burgundian Grands Crus, absolute myths for any wine lover. There’s what we call the “Famous Seconds,” wines that became known ten or fifteen years ago. In Bordeaux there are the Beychevelle, bottles already worth a lot but with still some gain potential. Our core business and what we love most is finding the third category, which is the “Rising Stars,” tomorrow’s stars. Whoever positioned themselves on Beychevelle 15 or 20 years ago before the Chinese market made the brand explode colossally, I think their retirement is taken care of. Our goal is to find tomorrow’s gems. Whether in Bordeaux or elsewhere.
I want to know more about that. How do you spot the “Rising Stars”?
Quentin: Wine selection at U’Wine goes through several elements. First, tasting, of course. To invest and for the wine to age well, it has to be good at the start. That’s the first component. The second is what I call the notoriety component: knowing what the dynamic of this property or this wine is around the world and what scores various journalists or critics have given that wine. The third is the dynamic of the property itself. Does the property have a communications strategy to show its wines and make them known and recognized around the world? A property that makes super wines at €15 but that doesn’t tell anyone, for drinking it’s great but you have to know it, and if no one talks about it, it’s complicated. And then for resale it’s very complicated. There are also two other aspects, which are past performance. Today, for any wine we buy, we can see what it sold for at the estate in 2000, what it was worth in 2001, in 2002, in 2003, and therefore see the price evolution to know if we have gain potential or not. And the last aspect, which is more financial, is liquidity in the markets. Meaning if we have a client who needs cash and tells us they need us to resell €20,000 of wine, we have to be able to sell it pretty quickly on B2B marketplaces because the client is in a hurry, but it has to be relatively well-known wines.
On the rising estates, the tasting aspect can be there 1000%. But if they don’t have the communications side because they’re at the start, the past performance aspect isn’t there either, you also have to have some intuition…
Quentin: Of course, and that’s what I was saying about the property’s dynamic. I’ll take an example, a property like Jean Faure in Saint Émilion, I don’t know if that means anything to you, it’s one of Cheval Blanc’s neighbors. The wines are worth €25, it’s an extraordinary terroir, they make crazy quality wines but no one knows them and given the global craze for wine for 15 years and it keeps growing, I don’t see how this property can fail to explode one day. They make super wines, they’ve been biodynamic for a few years, there’s a crazy terroir, there’s the whole foundation for it to become an extraordinary wine. Antoine: It’s only a question of time before… Quentin: Right, hoping they hurry.
You’ve done it in France, you said you were starting to be present in Napa Valley, in Italy, etc. Were these models already in place or did they see you coming a bit like UFOs?
Quentin: Yes, but again this notion of touching a clientele they’ll potentially meet because we’ll ask them to come animate a tasting in Paris or Geneva, in Beirut or New York, that’s something that motivates them a lot. I might reveal a secret that’s not very hidden but for all these properties, their goal is to sell wine for more. And to sell wine for more, they have to control their distribution. Knowing the customer is very important. The problem today is that they sell to importers, who will sell to distributors, who will sell to private buyers. So for them it’s very complicated to know where the wines are sold, to whom, who drinks them, etc. And we provide part of that answer. Antoine: I think it’s one of the frustrations of many vineyards going through négoces or third-party distribution, not having all that data and knowing who drinks their wine. I think it’s coming, we’re starting to have statistics on where the wine goes, who drinks it and in what quantity. But it’s not a lot of data on the composition of the clientele, and I can understand that frustration when you spend time in the vineyard, when you make wine, you want to know where it ends up.
Starting from how much can I get into U’Wine?
Quentin: The entry ticket is €20,000 over 2 years. Actually, it’s €10,000 this year and €10,000 next year. We quickly realized we had the same workload for someone putting in €1,000 or someone putting in €100,000, except that we don’t sell by 6 bottles but by 60. We bring a whole bunch of services that requires us to have relatively high-end clients, so we believe a lot in this multi-year investment or cellar building because not all vintages are valued the same way, nor tasted the same way. Whether for investing or for drinking, it’s super interesting to have all the vintages. The other factor is that today, our clients are invited free to all our events. That requires a lot of time. Bringing clients to the vineyard is organization, it’s relationships with properties, it’s time, and for all that we need to make a margin on the wines we sell.
You commit to a minimum €20,000 over 2 years, and then it’s €10,000 per year minimum, is that right?
Quentin: Someone can do €20,000 over 2 years and stop there. What we do a lot with our current clients is €100,000 over 5 years. Actually the client puts in €20,000 a year and by year six, they may start to have sold part of the wines from year one and two. The goal then is to create a virtuous circle where year six is financed by part of the resales from the first two years. Year seven by part of the resales from years 1, 2 and 3, so they continue building their cellar and have their gains delivered either in cash or in bottles, in liquid or in liquid (the French pun is the same word).
That’s not bad. So at sign-up time, how do you validate these first 2 years, you ask for €20,000?
Quentin: No, we ask for €10,000 at the start of the year and €10,000 the year after. Antoine: Indeed, it’s not for everyone, you need a fair bit of cash available to invest, but if it’s to pay for a free cellar after 5 years, it can be worth it. I have a question on tax, because it’s still precious.
How does it work tax-wise, how do you declare this?
Quentin: It’s movable goods taxation, so we’re taxed on capital gains, but these are things you declare if it’s significant relative to your wealth. Wine being a “pleasure” investment, it’s what’s called wealth diversification. Generally, someone who comes to put €100,000 with us already has a few hundred thousand euros in real estate, a few hundred in stocks or in private equity or other. I don’t know any client who declares their cellar. There’s one case more or less setting precedent. That’s the case of Michel Chasseuil, who’s the largest collector in the world. He has a cellar worth tens of millions of euros that he wants to give to the French state to make a museum, and the French state asks him to declare the gains on his bottles knowing he hasn’t sold them… So we’ll see how that plays out. Then they’re taxed on sales above €5,000. We’ll find a client who wants 12 bottles of Pontet-Canet, we’ll take 3 from Antoine, 3 from Quentin, and so we slice that into sales of a few hundred euros and the client isn’t taxed.
That’s super interesting and I assume you can potentially buy through a company?
Quentin: Absolutely. We do a lot of bespoke. We have clients who build cellars for their kids or grandkids, clients who do it through holding companies, everyone is free to do what they want. And that’s pretty fun. We have clients who share a management mandate among several people. Antoine: Yes that’s not silly, that closes the loop. We were talking about “La Martingale,” which is an excellent personal finance podcast by Matthieu Stefani, and I listened yesterday to his episode on investing among friends. It’s true that at €10,000, you can clearly do a club of 5 friends putting in €2,000 a year, and then you just have to not fight over the bottles or when to drink them. Quentin: The advantage among friends is that you drink them together. Antoine: Exactly. But it’s true it’s a good idea, I’m seeing some friends this weekend, I’ll mention it to them. It’s super interesting, it’s still a sum, €10,000 to enter, but then when you’re on grand crus classés… Quentin: The model is also limited by the storage cost of the wines. Buying wines at €10, we don’t do it.
You have to refinance storage every year?
Quentin: No, on the €10,000 the storage management fees are planned in advance. Actually, you don’t buy €10,000 of wine, you buy €9,300 of wine. That €600-700 funds the costs of the first years. The costs of the last years will be settled at exit to avoid asking our clients for €50 checks every year. We try to bring some simplification.
Do you sometimes have special requests, a person who’s a fan of an estate or things like that, are these things you do?
Quentin: Of course, on our mobile app there’s a concierge service that’s a very easy and pleasant way for us to keep the link with our clients. There are several categories, they can ask questions about their cellar, and there’s also “I’m looking for a wine.” A client can tell us: “My daughter is from such-and-such year and I’d like to give her two magnums, what can you find?” Or “I have a Figeac ‘86 magnum in my cellar and I want to open it, do you advise opening it before, decanting it?” Either we have the answer, or we go straight to the property to bring the client an answer. Antoine: Yes it’s true you have this link between the two and you can very well call any château and ask them what they think. How did you find your first client? Quentin: The first clients were friends. Antoine: Did they put €10,000 too? Quentin: No. At the start we accepted €5, that was good. I exaggerate but today we’re structured. We have business introducers from the finance world. And we work with wealth management advisors, or even private banks who bring us clients. We’re very structured because we got this AMF registration that really helped us with commercial development. It brings seriousness and a real cachet to the company. At the start we did “friends and family.” We tried to find the first wealth advisors who were ready to bring us clients, that’s how it started.
Can you come back to this AMF accreditation? I didn’t catch everything. I think you’ve passed, what, 24 or 26 billion in assets?
Quentin: We have €24 million. Antoine: It’s true that in billions it’s a lot. Quentin: Yes that’s a lot of bottles. As it is, we have 550,000 bottles of wine in stock. In billions I don’t know how much that would be, but it’s a bit too much. The AMF, Thomas started that before we found each other. He told himself: “I sell en primeur to private buyers, that’s nice.” Except we were starting to see the 1855 scandal coming, which did a lot of harm to en primeur sales and to the Bordeaux market.
Can you come back to 1855?
Quentin: Yes, 1855 is an online sales site that sold en primeur to private buyers, a bit Madoff style. They sold 10 bottles and bought only one, so when clients asked to be delivered, it was a bit complicated and it became a scandal. So we were starting to hear about it and it was starting to smell bad. Thomas told himself: “I do the same thing except I’m serious and someone needs to put a stamp on the U’Wine name, saying they buy a bottle and they resell a bottle.” So he went to see the financial markets authority figuring it was a file that would take 3 months. All the money we thought we’d put into developing U’Wine, we put it in lawyers’ pockets to revise the file. We got it at the end of 2014, it had started in 2011. That’s why we really only set up in Bordeaux as a négociant in early 2015. For us that was the real commercial start, since the AMF didn’t want us commercializing while waiting. We’d negotiated to do €100,000 in revenue per year at the time, so we were working on the side. Antoine: That must have been hellish, those 3 years. Quentin: Yes that’s also why we were still in Paris, we worked at each other’s places, a bit in the evening, a bit on weekends. We really became négociants in Bordeaux in early 2015 so on the 2014 en primeur campaign.
How do you become a négociant in Bordeaux?
Quentin: There’s an intermediary called a courtier (broker). You’re very nice but you can’t just call Mouton Rothschild or Cheval Blanc and tell them: “Hi I’m Antoine, would you like to sell me wine?” I think it’s a request they get 60 times a day. You need to have a company, a business model, a real distribution circuit and to convince the courtier. He’s the one who’ll get the meeting. The property and the courtier have known each other for 30-40 years and the owner will say: “OK, dear courtier, I trust you, I’ll receive Antoine.” And then it’s up to you to defend your turf and the property will decide whether to work with you or not. To tie this back to U’Wine, we arrived early 2015, just on the eve of the 2014 en primeur campaign. We had allocations in 6 properties, which is ridiculous. The next campaign, we had allocations in 22 properties, then 45. Today we’re allocated on 70 of the 72 or 73 we’re targeting. In Bordeaux we have, I won’t say done the rounds because it’s not true and not all properties give us the volume we need, but we’re starting to take our place in Bordeaux. We still have a lot of work in other regions, even though today I think we work with 40 or 45 estates in Burgundy, so it’s becoming more and more substantial. You have to stay rigorous on wine selection and not buy wines just because they’re good or the owner is nice.
How do you do asset tracking?
Antoine: You have 550,000 bottles in your cellars. I’d interviewed Bernard Neveu, head sommelier at the Bristol, and that fascinated me because he told me he had I don’t remember 90,000 or 110,000 bottles in stock and I’d found that incredible. And I’d told myself, but how does he know the value, well his business is more selling wine to people in the hotel and advising them well. But for the hotel, it’s an incredible financial fixed asset that’s often identified by accountants at purchase value, by cost control as we say in hospitality, it’s identified at purchase value, when in fact that doesn’t make a lot of sense. How do you do it? Quentin: Especially when you reach those amounts, there are also insurance issues. And insuring at purchase value is great, but it still means our business doesn’t work if the wines haven’t gained value. We’re insured at market value, there are a few indices in wine that allow valuation. On top of that for us it’s very important because on the app, each client can see their cellar with what they bought, the purchase price and the market valuation.
Today, courtiers give valuations on Bordeaux wines since they’re aware of all exchanges between négociants or between négociants and properties. So they have a transaction history and they have lists of wine sales from négociants, they have offer prices. Then there are indices like “Liv-Ex” or “Wine Decider” that allow ratings of non-Bordeaux wines, and we update that monthly.
Antoine: I’d dug a bit with a friend into the idea of launching, so we’re really getting into entrepreneurship details and the dark side of my personality, software that allowed identifying in real time the values of each bottle in a cellar and therefore doing cellar management for large establishments, hotels, wine bars, restaurants… That was the target, this network of large establishments with beautiful cellars, being able to identify the value of each bottle at time T and being able to trigger alerts.
For example, the rating of such-and-such wine is suddenly dropping, we don’t really know what’s happening, it might be time to open it on the floor or not keep it any longer. Or, on the contrary, such-and-such wine has gained so many percent, you should probably think about reselling on the secondary market rather than opening it.
Quentin: We’re putting in place something that resembles that to have on the app a fully integrated cellar management tool. So the client could themselves decrement the bottle from their cellar at home, request a delivery and signal when they drank the bottle so their stock updates automatically. It’s something we can link with lots of other things so that the cellar’s insurance updates and fluctuates based on what’s in the cellar or not. To do restocks because when we see the client drank 5 of the 6 Branaire bottles we delivered 15 days ago we tell ourselves they like it. So maybe we should suggest another vintage or another similar property. Antoine: You may have a B2B target to add to the portfolio of large establishments but you’ll need to find time and energy. One of the difficulties we’d raised on this question is the absence of an EAN sheet on each vintage. An EAN is a barcode, a product identifier issued by a single body called GS1. Once you have that, you can easily identify the product, here’s its sheet, you have all its characteristics, its value… One of the difficulties is that EANs are relative in the wine world in the sense that many don’t have an EAN. Some have the EAN just for the estate, it’s the cru’s EAN, and the vintage forget it. Quentin: That’s about right, and that’s why the solution we’re developing requires a lot of work, but we’ll tag every bottle.
Are you pooling all that with big wine merchants?
Quentin: We’re at the very beginning of the project, so we want to test things ourselves, internally, and have our clients test them before offering it. But it’s something that will be entirely open. Antoine: I think it’ll be interesting, and there must be quite a few wine merchants interested. Quentin: Yes, or even restaurateurs as you said earlier. Cellar management for everyone listening who manages a cellar without a tool and does it by guesswork and realizes 3 weeks later they forgot to drink such-and-such bottle and it’s a bit late, or for people who use an Excel file, that’s still a hassle and requires lots of work and rigor. The goal is to simplify all that. We’d all love to have an up-to-date cellar book to know what we have, what to buy back, what to drink… But today there are very few tools. Antoine: On my side it’ll stay an idea we explored a bit but a very simple idea. Maybe one day I’ll get back to it, if Thibaut is listening I’d talked about it a lot with him, hello to him.
In your job there’s wine selection, we talked a bit about France with these three categories, abroad a bit too. Are there rising regions?
Quentin: Yes, Bordeaux and Burgundy have been among the flagship regions for a long time. In these regions there are always rising properties. We talked about Jean Faure earlier, but we can talk about Siran in Margaux, the wines of Coralie at La Fleur de Boüard, which to me are super wines. There are regions that are more or less in vogue. A few years ago it was the Rhône Valley that was rising fast. Today it’s more Piedmont that has all the characteristics to be the next region to explode. It’s been starting for a year, we’ve been going there for 3 years. The expression I use is: “Piedmont is Burgundy of twenty years ago.” There are a lot of similarities, not on the terroir itself but on the fact that it’s a lot of small parcels. Winemakers making 5, 6, 8, 10 cuvées. On a vineyard of 8 hectares, that means with between 3,000 and 5,000 bottles, they have to feed the whole world. There’s necessarily an important scarcity phenomenon. This multitude of winemakers on this multitude of small climats or small terroirs really resembles Burgundy. You find super Barolo or super Barbaresco at €30, €40 or €50 that I think will be tomorrow’s €200, €300, €500 bottles. I think the people who bought Romanée-Conti or Armand Rousseau twenty years ago, certainly had a great nose since they realized these were very great wines and rising estates, but they didn’t pay that much for them.
Are there future wine-producing regions you think could have something, I don’t know, toward Asia or Eastern Europe? We talk relatively little about it, the Bulgarian, Romanian vineyards. Do you see things appearing?
Quentin: Yes, there are surely things to do in those countries or regions. China, it’s obvious they’ll find great terroirs. That’s what LVMH did by creating Ao Yun, their Chinese wine. I talked about it with Pierre Lurton 10 days ago, he was telling me: “You don’t realize what we did.” We did soil studies everywhere and found a place that was inaccessible, not cultivable, and we managed to create an estate. It’ll take time because the vines are young and we won’t make great wines in three years, but I think it’ll surely be a very good wine in the years to come. China obviously will start making great wines. We have in France this culture and this history. The climats of Burgundy, or the 1855 classification, are still things that go back and that anchor a notoriety. I think the Loire keeps making progress and used to make Cabernets that had trouble ripening 20 years ago, and today they make wines that get better and better. That’s obviously a region that will continue to rise in coming years. Languedoc, with its terroir diversity, is a region that’s been exploding for 10 years and will continue. In Eastern Europe, there are already super wines, if we take the example of Tokaji in Hungary, or even the Mosel wines in Germany.
There are really super wines everywhere today. Winegrowing has never been as strong as today.
You have to watch everything. But for U’Wine to go buy wines in Slovenia, that’ll take a while. There’s no liquidity in those markets. I think in sourcing the great wines of the world, France represents 60-70% of our sourcing, Italy 10%, Napa Valley 10%. We have a few estates in Argentina, in Chile, in Germany, in South Africa… Antoine: By having an allocation of your portfolio on lesser-known estates, you can do 100%, 200%. Quentin: That’s what we call “Rising Stars.” For example you buy at Jean Faure at €25 en primeur, which is a perfectly reasonable price for a Saint Émilion grand cru classé. You can resell it in 5 years at €50 to a private buyer at the other end of the world or in France, which is a relatively reasonable price when you want to buy a good bottle with a few years on it. So we double our money. If you buy Cheval Blanc at €500 en primeur, before reselling at €1,000 it’ll take some time. I think these gems of tomorrow have far greater potential. You have to be careful about this market liquidity. When you have investor clients, and unfortunately the wine world isn’t like the stock market. You can’t resell wines by clicking a button. This liquidity is important and reassures our clients. We need to be in all the great estates. When you build a cellar, you like to have a few icons. But I don’t think there are people drinking Vogüé Musigny or Haut-Brion every day.
You’ve existed at U’Wine for about ten years, have you seen an evolution in the wine consumer?
Quentin: We have very different client profiles, pure investor profiles, but today our great victory is that 100% of our clients have at least one bottle delivered, so somewhere we’ve won. Then we have clients who get 100% of what they buy delivered. We have clients who research and start buying wine because their social environment leads them to wine, people who have made a fortune recently, big entrepreneurs who don’t know wine at all and are starting to host, and it’s well regarded to serve wine at the table. So they’re starting to take an interest in it. We also have real experts who come see me saying: “Have you tasted such-and-such wine?” and sometimes I don’t know the property, so it’s super interesting.
Yes, it’s super diversified. In terms of nationality, have you also seen a change, have you seen certain trends or weak signals?
Quentin: Yes, ours isn’t quite representative of the market because our commercial strength was French speakers in Europe until not long ago. Now we’ve opened an office in Shanghai, so the Asian clientele is developing pretty well. Today at U’Wine we estimate that on a Grand Cru bottle produced, there are 6 chances out of 10 it’ll be drunk by an Asian and 2 chances out of 10 it’ll be drunk by an American.
The remaining 20% are largely in Europe, then micromarkets here and there. We need to focus our development, and that’s what we’re doing on Asia.
We also need to fairly soon open an office in the United States to develop that market too. I’m not talking about investment but consumption. The problem is we opened the office in China on January 5, 2020. Since it opened, we haven’t been able to go. Luckily it was open, because over there everything has restarted, almost a year now. Our employee we had in Bordeaux for 2 years is Chinese and opened the office over there. She’s already hired 2 people and it continues to develop. We’d love to bring them back to France to see them and so they can also see the properties. They’d be thrilled to go a bit into the vineyard because you never understand a wine as well as when you go on site. So we adapt, we created tastings on Zoom. We offer our clients to buy a bottle of such-and-such wine, and the first week of the month we deliver, and the third week of the month we taste on Zoom. They have the bottle they received, and I’m usually at the estate with the winemaker or owner who talks about their wines. We’d have a better time all around a table, but we try to adapt. Antoine: Hopefully it picks up fast. For people listening to us in the future, we’re in April 2021, so we’re still going through the Coronavirus epidemic and its lockdowns, but it’s almost over, well I hope. Quentin, thanks a lot for all this, we learned tons about wine investing, how to detect these “Rising Stars” and the estates that will make the wealth of your cellar tomorrow and that will let you finance this cellar and your future tastings.
As usual, I have three remaining questions to wrap up this episode. The first is, do you have a recent favorite tasting?
Quentin: Loads. But yes, I’d say the Puligny-Montrachet premier cru, Les Combettes from Jacques Prieur 2010. Domaine Jacques Prieur is based in Meursault. It’s a wine we drank 15 days ago at the office and that was a pretty extraordinary bottle. Antoine: Did you pair it with something or was it pure tasting? Quentin: No, with cheese because it’s a wine with quite a bit of acidity, so it worked very well with cheese.
Do you have a wine book to recommend? Small clarification, I forbid “The Taste of Wine” by Émile Peynaud from now on.
Quentin: It’s a graphic novel I recommend called The Initiates by Étienne Davodeau. It’s a very thick graphic novel, there’s only one volume. It’s the story of a winemaker who meets his neighbor who writes graphic novels. They’ll teach each other their craft. You see the guy who writes graphic novels go prune the vines and try to understand why and how you prune and what it changes in the wine. He participates in the harvest. So it’s a graphic novel that lasts a year. The winemaker learns how to make a graphic novel and how many panels are needed before the bubbles are in the final book. It’s very interesting. You really understand all the steps: the vine, the cellar, the cave, up to bottling.
Finally, who should be the next guest on this podcast?
Quentin: Let’s say François Despagne, who’s the owner and manager of Grand Corbin-Despagne, a cru classé of Saint Émilion. He’s a person I love a lot. He believes in everything he does and puts a lot of heart into it, a lot of conviction. He manages to transmit his passion. And he makes extraordinary wines. And I have a small story. He hosts us every year before en primeur to talk about his vintage. He tells us everything he did, how he experienced that year. After we taste wines from the property and from vintages ending with the last digit of the current vintage. I have a pretty stunning memory in 2018. Everything was blind and he opened a Grand Corbin-Despagne 1928 for us. All the people present estimated it in the 70s-80s, the wine was so full of youth and freshness. It’s super value for money in Saint Émilion and François is a pretty extraordinary person. Antoine: Noted. We’ll try to contact François. I’d happily go see him on my next trip to Saint Émilion. Thanks a lot Quentin for your time. Thanks for coming to La Défense. We’re doing episode 2, that’s a promise, in the vines, or in Bordeaux at least. Quentin: With pleasure, you pick the region. Antoine: See you very soon. Quentin: See you, Antoine, thanks.
