Things to know before buying a Bordeaux vineyard

Things to know before buying a Bordeaux vineyard

The Bordeaux vineyard community – first steps

If you are just starting the journey of seeking to understand what it might take to join the Bordeaux wine making community it is well worth watching the Wine Masters series. Klaas de Jong and his team came to Bordeaux a few months ago to shoot a documentary as part of his series looking at all of the famous wine regions of France. They have a wealth of information and the Wine Masters series is beautifully filmed with stunning videography of the vineyard lifestyle. For the Bordeaux part of the series, it focuses on Chateau Angelus and the family that has run it for eight generations, the De Bouard family.

The Angelus family and their harvest

As we all know, a new venture must start with some kind of motivation; often in business the motivation is making money, but with winemaking it is more often a passion and love of wine that drives interest. However, watching the dreamy videography of the Wine Masters documentary it is easy to capture the vision and passion that surrounds winemaking in Bordeaux and underwrites the motivation for many owners that join this elite community, at whatever price point. This is important because if money is the sole motivation this is the wrong industry to sign up for since it is likely that higher returns can be earned from other investment classes. The value associated with vineyard ownership is very high, but it is less likely to be monetary and more likely to be the lifestyle, which is second to none. While good wine sales will underwrite revenues and a well purchased Bordeaux vineyard can see some excellent capital growth over the long term, so much of the value gained in the ownership of a Bordeaux vineyard is non-monetary. Rather it is intrinsically human: being close to the land, nature, navigating the weather, creating something special that you had personal influence over and living in an environment and amongst people driven by passion.

Investing in a Bordeaux Vineyard – first questions:

  1. What is my motivation for purchasing a Bordeaux vineyard – do I value the Bordeaux vineyard lifestyle?
  2. How much time can I dedicate to my Bordeaux vineyard enterprise
  3. Will I live on site for all or part of the year?
  4. To what extent will I personally influence the wine making – even if I know nothing about it
  5. Do I understand that wine making is partly farming and therefore affected by the weather?

A (Bordeaux) Vineyard Lifestyle – where to start

Although a commercial enterprise is perfectly achievable, owning a Bordeaux vineyard is primarily about creativity, passion and lifestyle. The value created is not necessarily going to find its way to an increased bank balance in the short term, even if looking at Chateau Angelus you could be forgiven for thinking otherwise. The Angelus goal (and dream) is perfectly achievable by anyone but it takes time and commitment to achieve what the De Bouard family have achieved. Buying a Bordeaux vineyard is a passport to an astonishing lifestyle and the investment made both to purchase and then to operate a Bordeaux vineyard must be put in this light. Owning a Bordeaux vineyard will bring some of the most extraordinary experiences that will literally be life changing – the Wine Masters documentary captures this very well. As someone that lives and works in Bordeaux, I can attest to sharing wonderful moments with family and friends around a long table for hours in the shade outside on a sunny day eating some of the best food and wine on the planet. This part of what makes the vineyard lifestyle (in my humble opinion) the best in the world. But keep in mind, the Wine Masters have focused on a family that have been developing and investing in their product for 8 generations so perhaps it is no accident that they are at the very top of the Bordeaux vineyard hierarchy.

Hubert de Bouard appreciating their latest vintage.

Wine Making in Bordeaux

But listen carefully to what the experts in the documentary say. You will hear both technical and strategic talk. Hundreds of little decisions come together to making a great wine. There is skill and discernment that is born of years of experience as well as dedication to quality. It is not essential for the owner of a vineyard to have years of experience, but it is essential that they have the right team around them and that they participate in the key aspects of winemaking through the year. Note that at Angelus, the family live at the chateau or at least spend the majority of the year there. They are dedicated to their craft and recognize the responsibility they have to pass their heritage on to the next generation.

Owning a Bordeaux Vineyard. What are the risks?

All investments come with an element of risk and in our experience, each vineyard buyer has a different tolerance and risk profile. In all cases we recommend thorough due diligence investigations be completed. This will be different depending on whether the acquisition is of the company (shares) or simply the purchase of assets. There will be a wide range of things to consider that your vineyard transaction manager/broker will navigate you through including the choice of the appropriate vineyard due diligence team of professionals to investigate the targeted vineyard of choice. A large complex vineyard estate being purchased as a company will be managed by the transaction manager (such as Vineyards-Bordeaux) who plays “quarterback” at the centre of the transaction process. The team would most likely include:

  • Accountant – review of accounts for all existing ownership and trading companies
  • Notaire – title insurance
  • Lawyer – employment contracts
  • Lawyer – holding structure
  • Lawyer – legal documentation: purchase contract
  • Lawyer – Guarantee agreement
  • Architect – upgrades, renovations
  • Vineyard auditor – personnel: operational
  • Vineyard auditor – equipment both vinicultural and viticultural.
  • Vineyard auditor – health of vines and soils
  • Vineyard auditor – vineyard drainage, water systems and waste water compliance
  • Vineyard auditor – winery air quality controls
  • Vineyard auditor – regulations and compliance
  • Vineyard auditor – business plan
  • Courtier – wine volume audit and quality compliance
  • Diagnostics firm – to complete investigations for the buildings

The Purchase

Ok, the list is quite long when compared to buying an apartment – but with a seasoned vineyard broker/transaction manager you have every reason to expect the vineyard purchase process to be well piloted through to conclusion. A successful purchase is about project managing the various professionals, reports, regulations, documents and agreements – ensuring that the right things are done in the right order with the right professional experts. A recent client of ours would end each call or meeting by asking “what question should I have asked that I did not?” – it was a great way to ensure that he had understood each step and that it was handled comprehensively with all the information necessary to make well informed decisions.

The Wine Masters series provides a window into all that is wonderful about the vineyard lifestyle but like any serious project or investment it is wise to clarify goals and objectives, gather the best advice and be clear about the commitment you are personally willing to invest in achieving your goals.