Home > Editorial > Supply and Demand in the world of Fine Wine and Spirits

 

FOUR-MINUTE READ


 

Martyn Rolph, Commercial Manager

 

Every year, demand for the finest wines and spirits outstrips supply. Here, we talk to Commercial Manager Martyn Rolph about how – and why – we manage our customers’ allocations.

 

What exactly is an allocation?

An allocation is simply the amount of wine you receive. As merchants, we receive allocations from producers. In turn, our customers receive allocations from us. The best, most sought-after wines are usually only offered on allocation.

 

Why do allocations matter in regions such as Burgundy?

In short, scarcity. Production levels across certain regions are very small. Take Burgundy as an example, each individual vineyard is often split between many different growers. Some producers own just a row or two; this means they make tiny quantities, often just a few barrels.

 

How much do vintage conditions impact allocations?

The individual vintage has a huge part to play: a difficult vintage with low volumes will directly impact our allocation from producers. Recently, we’ve seen a succession of smaller Burgundy vintages due to hail and late frosts and the 2021 Bordeaux vintage was also affected by lower volumes. It’s a very challenging situation, especially as demand is so high.

 

How do you decide a customer’s specific allocation?

Our starting point is to be as fair as possible. When we have really limited availability, we consider a few things: firstly, the customer’s past purchases from particular producers – we want to help customers buy from producers who they’ve supported in previous vintages. Added to this, we reward customers who buy across a producer’s range of wines, not just the top bottles; this kind of support is highly valued by winemakers. It’s much more difficult for us to help customers who only want a single, in-demand case. We also consider how loyal customers are to Berry Bros. & Rudd, including storing wine with us and engaging with our offers throughout the year.

Ultimately, we want to spread high-demand wines as widely as we can. We absolutely recognise customers’ frustrations when it comes to allocations, but trusting us to help you discover truly excellent wines is part of the excitement of collecting.

 

How can I increase my chances of getting a particular favourite wine?

Firstly, make sure your Account Manager knows exactly what you’re hoping to buy and be prepared to purchase a selection of cases. Also, keep in mind that we try to reward buying loyalty. Taking Burgundy again as an example, say you want a particular Premier Cru Vosne Romanée: make sure you continue to purchase in the “lesser years”. This is vitally important as producers need to sell their wines every year, not just in the outstanding vintages.

Of course, more than ever before, the best growers rarely produce poor wines in trickier vintages. To take the 2011 vintage in Bordeaux: it was referred to as a “lesser vintage”, but I’ve enjoyed many 2011s over the past few years. Most are delicious now – and will be for years to come.

 

What’s your best advice to a frustrated customer who isn’t getting the wines they want?

The best place to start is by speaking to your Account Manager. We’ll be able to talk to you about the specific wines you’re looking for and shed light on how we are allocating the vintage. For example, there may be a year where we see our allocation for a particular wine drop by more than 50%, making it unattainable. In this situation, we’ll always be transparent and help you find the next best option.

To compound supply issues, we are seeing incredible demand across the top-tier wines meaning it isn’t always possible to fulfil our customers’ expectations. It’s a frustrating situation – especially if you’ve previously been able to purchase a particular wine – but the landscape has changed significantly. It’s important to be flexible in your approach to get the best out of buying fine wine.

 

I’m just starting a cellar, how do I get an allocation?

When you first sit down with your Account Manager, it is important to let them know what your motivations are and if you have any specific preferences for a producer or a wine. On that basis, they will come up with a strategy, but patience is key when considering the most in-demand wines. One route open to our customers is purchasing back vintages, many of which will be available on BBX. Alternatively, we can source them on our customers’ behalf. There are many fantastic wines out there and we use our knowledge and expertise to highlight the best opportunities, particularly when championing producers who are just starting out. At this stage, wines may be easier to obtain but, in the future, may become allocated as demand grows. Supporting the producer over the years will be rewarded.

 

What is Berry Bros. & Rudd doing to make sure it has the best allocations in the industry?

We have close, long-term relationships with our producers. This doesn’t just mean visiting them to taste regularly: we also support them in the marketplace and by buying across their range. Nurturing these relationships is the best way for us to maintain volumes in the smaller production years. Interestingly, producers increasingly express a desire to see their wines go to customers who want to enjoy drinking them, rather than those that are looking to turn a profit in the short-term.

Also, we try to identify new talent first. When you champion a producer before they become well-known, you build loyalty and lay the foundations for a fruitful relationship.

You can find out more about collecting wine with us here.