Reviews

Why Masseto is going to Bordeaux
«Enoteka» №4-5(71) 2009

The latest far reaching decision from renowned Italian estate Tenuta dell’Ornellaia was unexpected by many players and experts of the wine market.

Starting from 2006 vintage that will be released in October 2009 some Masseto will be sold via Bordeaux negociants.

At the press-conference in Milan the company management together with other important market players explained why their decision was right and why new sales system will be successful.

The wine was born in 1986, having become one of those accidental discoveries which lead to outstanding results. The debut vintage was labelled as Merlot, but starting from 1987 the wine is called Masseto, after the name of the hill where the vineyard is planted.

Masseto comes from Bolgheri on the Tuscan coast, a homeland of several famous Italian wines including Sassicaia. But even in such great company a distinct line lies between Masseto and other wines. One of the main reasons for a privileged position is its unique terroir. A seven-hectare parcel, precisely containing Masseto vineyard, has a distinctive soil structure, not to be repeated anywhere else in Bolgheri. The base is Pliocene clay, ideal for Merlot, as well as for growing grapes with exceptional characteristics. A very gently sloping vineyard looks west on the Tyrrhenian Sea, lying just 8 kilometres away from the beach. Generous Mediterranean climate and sun whose action is intensified by rays reflected from the sea, form expressive, intense bouquet, adding to complexity and monumentality which are inherent in Masseto thanks to the vineyard’s unique soil structure.

During vinification a winemaker works with 3-5 base wines which are fermented and aged in barrels separately for one year. Then a final blend is made, it “marries” for another year in French oak barrels and then several months in bottles. Three full years are passed from harvesting to releasing Masseto on the market. Production is strictly limited. Except for the record low 2003 vintage when only 22,000 bottles were produced, 30-32,000 bottles are made annually.

In its 20 years of existence Masseto reached the highest peaks. It is a top Italian wine and is on the list of the greatest internationally acclaimed wine names.

According to Lamberto Frescobaldi from renowned Tuscan wine dynasty that owns Tenuta dell’Ornellaia via Tenite di Toscana holding, Bordeaux negociants themselves put forward the idea to sell Masseto through their system. By agreeing to it, Tenuta dell’ Ornellaia management confirmed that future benefits should outweigh the risks.

Mathieu Chadronnier, CVBG Dourthe-Kressmann sales director of fine wines department, announced that Bordeaux sales system known as place de Bordeaux is a well established platform for international distribution of the finest Bordeaux wines. It is effective in placing wines on international markets, with its sales network covering 100 countries, and negociants understand each of them. Chadronnier argues that advantages of the negociant system are transparency, quick reaction to market demands and flexible pricing.

Starting from October 2009, when the next Masseto vintage will be on sale, five Bordeaux negociants will receive a 20% quota on international sales. “Negociants have always handled the great Crus of Bordeaux, and therefore have the experience and know-how necessary to handle a great Italian Cru. With this operation we will retain full control over the traceability of our wines. The agreement allows us to know exactly where the wine is sold,” stated Tenuta dell’Ornellaia CEO Giovanni Geddes.

Among obvious advantages of the new modus operandi is a wider coverage of international markets. Masseto is currently sold in 54 countries through exclusive agencies. Negociants can expand sales to 100 countries. Moreover, Tenuta dell’Ornellaia managers expect a deeper understanding of where the highest demand for Masseto is and what pricing levels can be sustained on these markets.

As Matieu Chadronnier stressed, negociants who were appointed to work with Masseto, are “excited and privileged”, as this move gives their companies additional international recognition. On the other hand, Masseto is the first foreign wine without direct links to Bordeaux estates or producers accepted by the negoce. Other wines of non-Bordeaux origin, such as Opus One or Chryseia are made by joint ventures or with involvement of Bordeaux producers.

Chadornnier added that each new Masseto vintage on the place de Bordeaux will become a genuine commercial event that will encourage market players to act swiftly. The negociant system will amplify the wine’s perception as a rarity, which in turn will strengthen the brand. With time negociants can create a market for older Masseto vintages. This, however, brings a certain concern to Lamberto Frescobaldi who says that negociants will be leaving significant stocks at their warehouses to sell them later at a greater commercial advantage. Masseto will be shipped to the negoce as ready bottled wine, at the same time when it will be sent to importers. Futures sales through the place de Bordeaux are not planned.

The reason why Bordeaux negociants have eyed Masseto is not only about it being a super premium Italian wine. Masseto is equally attractive because of its solid commercial guarantees. Price dynamics have lately been very positive: in the past 12 months the price on world auctions grew on average by 86%. Relative to initial release prices, the growth varies in the range of 178-446% depending on the quality of vintages.

In uncertain times, like the current financial and economic crisis, “blue chips” of the world winemaking, including Masseto, become a promising investment tool. According to data presented by Medoibanca financial analyst Gabriele Barbaresco, wine indices regularly achieved higher results than stock indices and remained profitable event when the latter fell. Mediobanca index of the world’s top wineries during this period rose by 59,8%, while international stock markets fell by 15%. The difference was even greater for France — plus 98,1% and minus 25,8% accordingly.

Meanwhile, comparing profitability from four types of investment, Barbaresco noted that from July 2001 to October 2008 investments in real estate returned 4,8% profit, in wine — 12,9%, in gold — 13,2%.Thus, fine wine is comparable to gold in terms of profitability and dramatically exceeds investment returns into real estate.

Serena Sutcliffe, Sotheby’s director of the international wine department, said that auction prices for Masseto 1997 doubled in 1997 and remained at that level. Not many Italian wines are sold through leading international auctions — they mostly include Sassicaia, Masseto and a few top wines from Piedmont. “I am positive about the future of Masseto. The wine is an incredible marriage of Merlot with certain types of soil and made with phenomenal care. Masseto has intrinsic quality that has been rarely established and huge individuality which make it a great wine”, she noted. Sutcliffe also believes that introducing a new sales channel will lead to further price increases for Masseto at auctions.