A subject that journalists often ask us about is the so-called hobby vineyard of Bordeaux. Given the work and commitment it takes to operate a vineyard estate, it is a curious description, but I know exactly what they mean when they ask about them. However, just as beauty is in the eye of the beholder, so the hobby vineyard is really in the mind (and bank account) of the owner.
Hobby vineyards have not been a supply side phenomenon, not that is, until recently. As vineyard transaction specialists we have of course handled dozens of vineyard sales that might be considered Bordeaux region hobby vineyards, but these have only been hobby vineyards because the buyer has the financial resources to make wine production a pastime activity. Entrepreneurs and owners have typically not intentionally set out to create a hobby vineyard as an end result. Sales that could be described as hobby vineyards have always been given that title because of the demand-side, in other words the buy-side requirements. More commonly then, a hobby vineyard is defined by the resources and desires of a buyer who may seek all of the trappings, enjoyment and lifestyle attributes of wine making from their own vineyard without the requirement of it being their primary source of income.
Therein lies the foundation of any definition of what is a hobby vineyard. It is a vineyard operation owned by someone that does not need it as a primary source of income. It is tempting to define a hobby vineyard by its physical elements such as:
- A beautiful chateau residence
- Not a primary family home
- Attractive setting often with lovely views
- Seductive lifestyle attributes
- A small vineyard and winery
- Less complex operating infrastructure
- A boutique high quality wine
It is true that hobby vineyards typically have most or all of these criteria but using them alone would be a mistake. For example, Chateau Ausone, the Saint Emilion Première Grand Cru Classé “A” has all of these but with 75cl bottle prices ranging over €1,000, no one would consider it as Alain Gauthier’s hobby vineyard. There are many small and exquisite vineyard estates that could attract a primary business, but it will always depend on the motivation and strategy of the buyer. For example, if a buyer has a particular and specific strategic advantage for distributing their wines, such as a hotel group, restaurant chain or a Kosher wine trader, then a small high-quality estate would not be a hobby vineyard but an important part of their business supply chain. But if that exact same estate attracts an entrepreneur, passionate about Bordeaux wine and who has recently sold her business with a wish to fulfill a lifelong dream of vineyard ownership, then it may be operated with very different priorities – most commonly priorities that do not require each vintage to make a profit.
There is no doubt that hobby vineyards are at the fun end of the vineyard purchasing options, however, to call them a hobby requires that they are only for those that can afford not to worry about profits. But is there a new asset class emerging that is specifically targeting the buyer that does not have the time to take on the commitments of running a vineyard operation. We believe that hobby vineyards are now their own asset class targeting buyers seeking a turnkey vineyard lifestyle estate with (almost) everything outsourced.
Next week in Part 2 we will look in more detail at how these Bordeaux hobby vineyard estates are being brought to market.
Written by Michael Baynes