Sotheby’s wine director is upbeat about the market’s long-term stability
The fine wine and spirits industry will face a number of problems in 2023, but Jamie Ritchie, one of the most important people in the auction world, is confident that it will be able to handle them.
Jamie Ritchie, the worldwide head of Sotheby’s Wine & Spirits, told that the rise of youth is a good sign for the market. This includes both new-generation wine producers and a growing number of Millennials who want to drink less but better.
And he says that even though prices for some high-end Burgundies are starting to go down, people are still interested in the area, and that interest is spreading to high-end Pinot Noir from other places.
Sotheby’s wine and spirits auctions brought in a record $150 million in 2022, which was 14% more than the year before. The company is planning a lot of sales in the coming year, with a strong focus on single-owner auctions, charity partnerships, and the spirits market, which is growing quickly. The house will also keep running the Hospices de Beaune auction, which will bring in US$32 million in 2022 and is a big part of its annual income.
“I’m hoping that the most surprising thing about the coming year will be how strong the market is,” says Ritchie. “Even though the economy is in a bad place and there’s a war in Ukraine and other tough political situations, I’m hoping that the secondary market will be fairly stable and that past trends will continue.”
Some of these past trends include the continued rise of Burgundy and, to a lesser extent, Champagne, as well as a more diverse market, which has helped countries like Italy, the Rhône Valley, and Spain. But a recent Liv-ex report showed that things are starting to change. Prices for Burgundy and Champagne are going down, and collectors are starting to focus more on established parts of the market.
The report also said that these changes could bring buyers back to Bordeaux, whose market share has been steadily falling over the past few years. Ritchie says, “I think Bordeaux is a great deal, especially when you compare it to California, Burgundy, and Champagne.” “They make great wine on a scale that no one else does.”
But he doesn’t want to say too much about how the market will change in Burgundy as a whole. “In terms of the market, prices at the top end of Burgundy have gone down a bit, but what goes up the most tends to go down the most in times like these,” says Ritchie.
He says that some Burgundy fans might not be able to afford the wines they bought as recently as five years ago, but that most are not giving up on the region as a whole. Ritchie says that instead, they are looking at different producers, areas, and villages. “There are a lot of new, younger winemakers who are making great wines. We can’t deny that there is still a lot of interest, demand, and want for Burgundy.”
Ritchie thinks that this growth of the market is also happening outside of the Côte d’Or. “In the past, the focus on Burgundy did not really help Pinot Noir made in the rest of the world,” he says. “But I think there are beginning to be signs of that.” “I think people want to try and learn more about Pinot everywhere it’s made, from the west coast of the United States to New Zealand, Germany, and Austria.
The bigger question is whether or not the increasing diversity of the fine wine scene, which has become clear over the past few years, will continue in the face of a macroeconomic situation that is so unstable. Here, Ritchie is still upbeat. “I think that will keep going on,” he says. “If you don’t think prices will go down too much, people will keep looking in other places.
“There is a new generation of winemakers coming up in every region. They make wines that are more pure, delicate, and refined. People are excited about that, and I don’t think that will stop.”
People are also getting more and more interested in spirits, which used to be an afterthought for most auction houses but are now becoming more and more important to their business. Ritchie points out that diversity is also a trend in this area.
He says, “It started with Scotch whiskey, then moved on to Japanese, and now it’s American.” “There has always been a fairly strong secondary market for spirits in the UK. In the US, however, there hasn’t been much of a secondary market for spirits, mostly because of rules. But now there are a lot of people who want to eat it. We think that the US market will be a big place for us to grow in the future.”
More generally, more activity in the US has helped make up for a drop in demand in the Far East. This is mostly because the Chinese government’s “zero-Covid” policy has led to continued severe lockdowns and a ban on traveling abroad. “Now that China is opening up and people are traveling again, it will be very interesting for us,” says Ritchie.
He still doesn’t know how soon the market will come back, but underlying trends make him optimistic. For example, Greater China is a world away from the gift-based market of the 2000s and early 2010s. Ritchie says, “It’s much more about personal consumption now.” “Buyers are pretty knowledgeable about wine and want to try new things and enjoy it.”
Southeast Asia, which includes Singapore, Indonesia, Thailand, and Vietnam, is also becoming more important. Ritchie has been pleasantly surprised by how strong and stable the UK and continental Europe have been recently, despite the war in Ukraine and rising prices.
Resilience and stability are likely to be the watchwords for merchants and auction houses in 2023. This is because the global fine wine and spirits market has been strong for a long time, even during the years of the Covid-19 pandemic. Even though the short-term performance of the market isn’t clear, it’s clear that the underlying trends are still mostly positive.
