Back-vintage wine offers a unique experience, but it comes with a price. This is true for producers, wholesalers, and both on and off-premises buyers.
The library releases are a regular feature at Wilson Daniels. They have been offered since the import company was founded 45 years ago. These include wines from Domaine de la Romanee-Conti and Domaine Leflaive.
Library releases come with many financial and logistical challenges. Still, their value has encouraged wineries and distributors for years to keep bottles in reserve and encourage restaurant and retail buyers to sell them. SevenFifty Daily interviewed beverage professionals from each tier in order to better understand the benefits and costs of these programs, as well as what they think about their value.
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Why maintain libraries of aged wine?
Kirk Wille is the vice president at Loosen Brothers USA. He says that the desire to have a matured wine is the main reason why many wineries hold back bottles. He says that only when wines are aged do they reveal their true character and become more than just a tasty beverage. They can also be a powerful evocation of time and place.
Giampiero Bernardi, CEO of BiondiSanti, in Tuscany’s Montalcino, whose Brunello di Montalcino riserva bottles are capable of aging up to 80 years, believes that the greatest value of these library releases comes from the ability to show off the wine’s potential for long-term aging–without having to wait. He says that by holding back wines in the library, he can offer collectors and customers unique experiences. It has become increasingly valuable as consumers are less inclined to age their bottles and more accustomed to drinking wine immediately after purchase.
Right to left: Rocco-Lombardo, Tim Malone, Kirk Wille and Giampiero Bertolini.
Professionals can also benefit from aging a portion of a vintage to release later. Tim Malone is the winemaker of Appassionata, and J. Christopher Wines is located in the Willamette Valley.
Both wineries and wholesalers can benefit from library releases to help them cope with the yield fluctuations that occur year after year. This is a problem that has become more pressing in areas like Burgundy. “[Late Releases] ensure our partners can purchase library vintages so that there is continuity on the market vintage in and vintage-out,” says Lombardo. Wilson Daniels will add more products to their library in larger vintages to prevent future shortages.
According to Raj Vaidya, the director of operations at the membership wine community Pressoir, which hosts events like La Paulee or La Fete du Champagne, offering library releases is beneficial to both the supplier as well as the final merchant. It acts as “insurance,” allowing the supplier to maintain their inventory and cash flow in difficult vintages, and gives buyers access to aged wine without having to age it themselves.
He says that restaurants are unable to buy wines when they first come out and wait until they mature because of the sharp rise in wine prices, as well as the increasing costs for real estate, labor, and other fixed expenses. He adds that the capital investment for high-cost and low-profit businesses is “too large.”
JT Robertson is the general manager of Le Du’s Wines, a Manhattan-based off-premise retailer. For him, selling library releases offers the best proof of concept. He says that the best way to convince wine collectors of the ability to age a wine is to provide them with an older wine.
When less-than-ideal vintages are available, library releases can be an asset. He says that if I have several wines of less-heralded years in a row, then a library release can refocus the conversation and reignite excitement. Robertson believes that releasing older vintages of celebrated wines is a way for wineries “to reinsert themselves in the conversation.”
OPERATIONS
How to Source Back-Vintage Wines for a List
Wine professionals share advice on finding and purchasing aged wines for restaurant programs.
Cost of Releasing Library Wines
There are costs associated with offering library releases. This is especially true when there’s limited storage space in wineries. Helene Seillan is the assistant winemaker of Sonoma County’s Verite. She says that maintaining a library inventory comes with significant costs but is seen as an investment.
Malone says that, in addition to the initial cost, delaying library releases does not offer an immediate return from a production perspective. It also creates a headache with maintaining high-quality bookkeeping to keep track of the bottles stored.
Vaidya says that wineries should also take into account the taxes imposed on library wines. If wineries keep the stock in their “commercial” store, then they have to pay tax on the unsold inventories every year. This means that they would need to charge a higher price for the wines they aged on-site.
Importers and distributors also have to consider storage costs when they hold back vintages. Vaidya says that by storing excess inventory, the wholesaler is securing a significant amount of capital.
Lombardo states that Wilson Daniels reserves an average of 5 to 15% of its allocation each year. The wines are usually sold within five years of their original release date. 90% of the library releases are allocated to the on-premises locations and released strategically in the fall to reach the market for the holidays.
Left to right: Raj Vaidya, JT Robertson, and Helene Seillan.
These bottles are more expensive because the suppliers charge a premium to hold back stock. Some producers and distributors will also charge a higher price for older wines, as they are unable to sell them on the secondary market.
Vaidya says, “The Bordeaux market is affected by this problem. Old vintages are abundant on the secondary market and can be expensive if purchased directly from the château.” Due to this, it’s not always worth sourcing directly from the producer despite provenance.
Robertson says that the scarcity of library releases is his greatest concern since they are so rare. I’m frequently faced with 6-, 12- or 18-bottle allotments, which doesn’t always help him in terms of sales, he says. Rare wines can boost sales, but limited allocations mean that fewer clients get to try them.
Vaidya believes that library sales are often the least profitable for the merchant, whether it is a retailer or restaurant. This is because the markups on the supply end can be too high. He says that this puts businesses in a position where they have to evaluate the value of purchasing these wines directly as opposed to through the secondary market.
