The steady rise of the second wines

The price gap between the First Growths and their second wines has continued to shrink. Twelve years ago, it was possible to buy 5.6 bottles of second wines for every bottle of the Grand Vin on average. This ratio has now halved to 2.8, pointing to the steady rise of the seconds.

The biggest price increase over this period can be observed in the performance of Carruades Lafite; back in January 2007, you could buy 6.1 bottles of Carruades for the price of Lafite Rothschild. Nowadays, this would get you 2.2.

On a brand level, Petit Mouton remains the most expensive second wine relative to its first: one can get less than two bottles of it for the price of the Grand Vin.

Petit Mouton has been among the top performers of the Bordeaux 500 index over one year: while the Bordeaux 500 has dipped 1%, the Petit Mouton index – reflecting the price movements of the ten most recent physical vintages – has increased by 6%.

Despite significant price volatility, Clarence Haut Brion continues to carry the lowest price tag and is the cheapest compared to its first wine. On average, it is possible to buy 3.9 bottles of Clarence for each bottle of Haut Brion. Compare this to the wine’s value in July 2007 when you could get 9 bottles of it for the price of its first.

The relentless rise of the second wines, however, is not influenced by marked stylistic improvements against their firsts. While the quality of both groups of wines has increased over the past decade with some vintage variation, as measured by Wine Advocate scores, the score ratio (second wine/First Growth) remains pretty flat, treading in a very narrow range.

The pricing power of the second wines continues to lie in “brand buying”: the allure of strong brands at lower prices relative to the Grand Vin. This has largely been a result of the emergence of mainland Chinese buying since 2008. Still, when surveyed, 19 out of 20 Liv-ex members said they would rather buy one bottle of Mouton Rothschild than two of Petit Mouton, suggesting that the 2:1 ratio is perhaps a limit of this 10-year trend. Unless the prices of the First Growths start to rise, the future performance of the second wines could be threatened.