The Start-up Disrupting The Bordeaux Wine Industry

Christies Wine

U’Wine has patented a bottle storage and protection process, protecting wine during shipping and storage. Each client can order bottles at their convenience.

Thomas Hébrard, son of the former co-owner of the prestigious Château Cheval Blanc, is disrupting Bordeaux’s premier grand cru classé industry.

Growing up among the vineyards of Saint-Émilion, fine wine runs in Thomas Hébrard’s veins. His family sold the prestigious Château Cheval Blanc estate to LVMH in 1998, but he vividly remembers a childhood with his father and grandfather as winemakers. “Wine and water were the two elements that shaped me,” he says in a phone interview (referring to his other passion of sailing).

“My familiarity with tasting great wines dates back to well before I was of legal drinking age. As a child I dipped my little finger in guests’ Champagne glasses, or at meal times my dad would call out, ‘Thomas, Alexis, come and taste this wine. It’s a unique occasion that you should remember for your whole life’,” he recalls.

Thomas, now aged 33, never expected to follow his family into the wine industry. Planning to become an engineer, he did a degree in aeronautics followed by an MBA. Working as a management consultant in Paris, he decided to spend his first bonus in 2009 on building up a wine cellar.

“I thought, if I don’t start saving to create my own wine cellar now, I will never have one.”

Almost all of his collection was composed of en primeur wine, which, in his opinion, is a sound investment. En primeur or ‘wine futures’, is a method of purchasing wines early while the wine is still in the barrel. This offers the customer the opportunity to invest before the wine is bottled. Payment is made at an early stage, a year or 18 months prior to the official release of a vintage.

“I analysed the primeur prices a little more, compared them with the deliverables and noticed that some wines were sold at much higher prices five to 10 years later. It was thanks to this realisation that I had the idea: ‘Why not buy more than I need to drink and I’ll sell some at the end of five to eight years to cover the cost of my consumption using the profit I make.’”

Through his father’s connections he was able to buy directly from vineyards and estates without needing to go through an intermediary.

“In Bordeaux, every intermediary gets a margin, so if you buy directly from the vineyard that’s the cheapest way. So if you purchase en primeur, directly from the estate, you ensure the best price,” he explains.

When his friends heard about his investment they wanted in too. “There were five of us buying en primeur 2008; next year there were 15 of us buying the 2009 vintage.” So in 2010 he decided to set up U’Wine, the first such company to offer en primeur wines straight from the château.

It took four years to register the company with the AMF, the French Financial Markets Authority, as it was a first for a Bordeaux distributor. Never before had there been a company acquiring en primeur grand crus to sell directly from vineyard to consumer, online, and even through a smartphone app.

Four years later and U’Wine manages 130,000 bottles of grand crus, worth approximately €6 million on behalf of 150 clients.

Last year, customers (mainly private individuals, family offices and institutions) purchased en primeur wines costing between €10,000 to €100,000, with the average being €37,000. Once purchased, wines can be managed by U’Wine for a period of five to 10 years, after which it can advise on resale.

The personalised advice will be key, as the en primeur market is not always straightforward. According to a report from benchmark wine index Liv-Ex, picking underloved winners from en primeur vintages is essential.

According to the index, the 2015 en primeur vintage averaged a return in euros of 11%, but the returns for the individual wines in the Bordeaux 500 range from -17% to 162%.

"We hypothesise that, over time, wines will tend toward their fair value price and thus undervalued wines should be bought at En Primeur and overvalued wines avoided," advised the report.

"The most undervalued wines provide the best returns as the price moves up to fair value in the secondary market whereas overvalued provide the worst return."

U’Wine, now a team of 14, has direct access to 53 châteaux and domains, corresponding to 80 different grands cru classés, including Château Suduiraut, Château Les Carmes Haut Brion and Château Malescot Saint Exupéry. Olivier Bernard, owner and manager of the Domaine de Chevalier, also sold through U’Wine, says: “Today I have a large cellar because I began it 35 years ago. Wine is a story of wine lovers, and it’s a story that needs to start young.”

This year the company will be marketing its grands crus classés on the main Chinese e-marketplaces. It will also be investing in Connect, its worldwide logistics and distribution network, to courier bottles around the world. “We can deliver directly to Europe, Switzerland, Hong Kong and China in under five days without an intermediary, with accurate tracking and guaranteed protection, as well as a Bordeaux-origin guarantee,” says Thomas. Clients can also ask the merchant to create personal events or to discover grands crus classés at monthly U’Wine tours. A concierge is permanently available to respond to client requests: tasting advice, wine needs, finding a rare vintage and more.

U’Wine has patented a bottle storage and protection process, protecting wine during shipping and storage. Each client can order bottles at their convenience and receive their grand cru wherever they may be. Their bottle is then packaged in an elegant wooden box, surrounded with cork chippings to protect it from shocks and provide optimal thermal and hygrometric insulation.

Thomas concludes: “U’Wine’s vocation is to be the cellar manager for private individuals the world over, giving them access to the world’s top one per cent of wines from the greatest terroirs on the planet.”

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