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Château Latour Plays the Long Game for Bordeaux

In a soft market for Bordeaux, French wine producer Latour is betting on patience

By HOWIE KAHN via WSJ

AMONG THE ROLLING ROWS of vines at Château Latour, Vincent Faux sets his eyes on four. These are the last of 800,000 plants to prune in advance of the 2015 vintage; the 52-year-old Faux, in his 36th year working this land, approaches the task tenderly. With storm clouds parting and the sharp, transitional light of the mid-March sun hitting his back, Faux isn’t thinking about a new phrase currently making its way around the wine world: le Bordeaux bashing.

The term refers to a low moment for the region. After a series of winning, if not extraordinary, vintages in the prior decade (2000, 2003, 2005, 2009 and 2010 are all excellent wines), the last few crops have been seen as lackluster. With an uptick in demand for Burgundy, and a general backlash in the Bordeaux market—after anti-graft measures in China exacerbated a global downturn—a whiff of anxiety now taints this hallowed terroir.

“All this has put downward pressure on Bordeaux,” says Chris Adams, CEO of the prominent New York City wine retailer Sherry-Lehmann. But Latour hopes it has found an effective countermeasure. In 2012, the historic producer bowed out of Bordeaux’s traditional futures market—the en primeur system of sales, through which a vintage is sold before it’s even bottled, providing a cash infusion for the vineyard and a potential deal for the buyer (the logic being that a young wine should cost less). Latour has abandoned this annual gamble of setting new prices for an immature product to instead focus on what it does best: “reaching the top of the qualitative pyramid for wine,” saysPeter Morrell, a 50-year veteran of the business and the retired chairman of Morrell & Company, a wine merchant in Manhattan.

Wearing a green canvas jacket and an olive-colored tweed cap, Faux squats down to the trunks, which are low and gnarled and curve like bonsai. They’re nearly black, bare of foliage, and with winter’s chill still lingering, they do nothing to betray their prized fertility. In a month’s time, buds will appear and break open. Later, as the temperature rises and the June rains begin to fall, fruit will cluster and swell on the vines. But none of that happens without Faux and his shears. He learned to cut from his father, he says. His grandfather did the job too. With several surgical snips, he’ll circulate “the blood of vines.” It’s pruning, he says, that brings the vineyard to life.

A similar vitality—not to mention enough cash reserves to never need to sell en primeuragain—has been brought to the vineyard by its owner, the billionaire French industrialistFrançois Pinault. Pinault, 78, who bought the vineyard in 1993 and later acquired otherluxury brands like Gucci, Saint Laurent and Bottega Veneta, says he lucked into purchasing the maker of his favorite wine during a business lunch. “The wine served that day didn’t quite live up to the challenges of our conversation,” he says (replying in French, via email), “so I asked whether anybody knew of an excellent vineyard in Bordeaux that happened to be for sale.” Somebody at the table informed Pinault that the British drinks group Allied-Lyons was, in fact, looking to unload Latour. “To a wine lover, that’s like buying the Louvre,” says Raj Vaidya, head sommelier at Daniel Boulud’s flagship restaurant, Daniel, in New York. Eight days later a $121 million deal was closed. “In one stroke, I became the custodian of a unique heritage, a fabulous story, a priceless treasure,” says Pinault. “I felt immense happiness and a certain pressure. The owner of Latour has a duty to pass the vineyard on to future generations in a better state than how he received it.” 

As popular as le Bordeaux bashing has become, Latour believes that, through modernization and a strategic response to a flagging market, it has found a sweet spot. But close observers will continue to watch the vineyard with interest: Until the 2012 vintage, the first to be withdrawn from en primeur selling, is released—sometime between 2020 and 2022—Latour will be betting on back vintages to maintain demand. “I tend to watch Latour with real appreciation because of the way they care about their wines, but there’s a good amount of Latour bashing too,” says Adams. “A successful futures campaign typically creates energy for the entire region. It raises interest in the back vintages, and part of the malaise is that there hasn’t been a successful futures campaign in a number of years. With Latour moving away from that system, other vineyards are like, What are they up to? Why can’t they help create that energy like they used to?”

GRAPE-GROWING was first documented on the land that would eventually become known as Château Latour in the 14th century. Thomas Jefferson, serving as U.S. minister to France, fell under Latour’s spell in 1787. When Napoleon III called for the classification of Bordeaux’s best wines prior to the 1855 Exposition Universelle in Paris—an event that would showcase Bordelais reds and whites for the visiting public—Latour was deemed one of only four premiers crus, or first growths, from a region whose international oenological standing was then without rival. The medieval ships that carried Bordeaux to England, for example, eventually formed the backbone of the English navy. “I think of Latour as the best and most consistent wine in Bordeaux,” says Vaidya, whose list at Daniel offers 15 Latour vintages, beginning with ’59, for between $1,600 and $5,900 a bottle. “They’ve never had any period of not being exceptional,” he says.

With the legacy of the vineyard at stake, in 1998 Pinault set a capital improvement plan into motion: updating the rooms where the wines age, buying new, smaller stainless-steel tanks in which to vinify—thereby giving the technical staff tighter control over fermentation—and installing a lab to benefit from precision chemical analysis. The stunning vintages from 2001 onward were all made using these new processes and equipment, but for other parts of the vineyard, technology has been scaled back. Horses are plowing the fields again at Latour. Biodynamics have replaced synthetics for protecting and fertilizing the vines.

“The common denominator through all of this is a piece of land,” says Frédéric Engerer,the 51-year-old president of Château Latour, a position he has held since 1998. (Engerer also runs Pinault’s more recent wine acquisitions, Château Grillet in the Rhône—the same region in which he also makes his own wine, Domaine de Fontbonau—Burgundy’s Domaine d’Eugénie and Araujo Estate Wines in the Napa Valley). Although he previously worked as a management consultant, strategizing with clients like Pepsi and the French oil company Elf Aquitaine, Engerer grew up spending summers around his grandfather’snégociant business in Narbonne, stealing sips from abandoned glasses and listening to his uncles and cousins debate the merits of varietals, age and appellation.

Years later, while working an advertising job in Paris, Engerer enrolled in an evening wine course twice a week with the formidable critic Michel Bettane and eventually, as a side project, invested in a wine bar on the rue Vieille du Temple in the Marais with friends. Engerer had attended university with Pinault’s son, François-Henri Pinault, now the chairman of Groupe Artémis, the holding company to which Latour belongs. When the elder Pinault offered Engerer a position at Château Latour at the age of 30, he wondered whether he wanted to saddle his love for the grape with the madness of work. “Wine was something to relax with,” he says, sitting in his spare, earth-tone office overlooking the vineyard. “Even my mother said, ‘Why don’t you keep that as a hobby and do something serious for your job?’ ” Within 24 hours, however, Engerer resolved to take the leap. “Some choices,” he says, “you have to make out of passion.”

Château Latour benefits from being planted on a tract of earth exceptionally well-suited to growing grapes. Its location, almost on the banks of the Gironde estuary, keeps frost at bay; the gravelly composition of the soil allows for efficient drainage, while the water-retaining marled clay in the subsoil maintains moisture in case of drought. It can keep roots, some of them a century old, from baking during a heat wave. “This terroir,” Engerer says, “has an amazing capacity to fight extremes.”

When visiting his property, Pinault finds himself enraptured by the landscape. “Whenever I come to Latour,” he says, “I like to walk there. I like to feel the grapes. I love watching the twisting rows of the vineyard. I am taken by the way the vine magnifies the wealth of the rough ground. I deeply feel the force of nature, the way that man cannot control much: the seasons, the cycles, the climatic hazards. It feels humbling. It’s the feeling of entering a timeless universe. At Latour, time is suspended.”

THE TASTING ROOMS at Château Latour sit just off the courtyard, where workers are patting down fresh sod. They’re part of a single, contiguous structure that has been completed in phases over the course of the Pinault regime. Most recently, Engerer and his team moved into new executive offices with modern-minimalistic furniture and a Niki de Saint Phalle sculpture at the top of the stairs. A few flights down, also completed last fall, is the massive underground cellar where the wines that were once sold en primeur and shipped off property after two years will now be stored in bottles for between eight and 10 years. The Pinaults and Engerer saw the old way as archaic, an impediment to quality control. “This is about releasing an agricultural product when it’s ready for consumption,” said Engerer. “We don’t want our wines drunk too early.”

Elsewhere in the building are the aging rooms, where the vinified juice sits in premium French oak barrels, from 12 different suppliers, for 18 to 20 months before bottling. And there’s another museum-grade cellar with vaulted ceilings where examples from each of the Château’s vintages, dating back to 1863, are shelved in stately, opaque bottles. Larger formats like double magnums and jeroboams are being moved to a new cellar with shelving specifically designed to support their weight. One passage shoots off the courtyard, past an enormous Richard Long mural commissioned by Pinault and made with mud from the Gironde, and into the heart of the vineyard, where the property’s “new” tower (the first one was destroyed during the Hundred Years’ War) was built around 1620.

Inside the tasting room I visit, empty glasses are lined up on a white, floating bar. Silver spittoons hang from the walls like Donald Judd pieces. Floor-to-ceiling windows flood the room with light. Francis Ford Coppola, now a Latour board member, describes his first sip of the wine with an ethereality that matches the surroundings. “A heavenly experience,” he recalls. “A new definition of delicious.”

Hélène Génin, the cellar’s 39-year-old technical director, who has been with the vineyard since 2002, guides the session, pouring from bottles and decanters. She explains that Château Latour produces three wines every year. The grapes from the oldest vines go into the Grand Vin, the style most commonly referred to simply as “Château Latour.” Grapes not quite up to the Grand Vin standard, though still relatively excellent, go into the Forts de Latour. The remaining grapes, from younger vines, go into a third wine called Pauillac de Château Latour, which is more accessible but nonetheless outstanding. Latour produces about 300,000 bottles per vintage of the three varieties; all blends contain different percentages of Cabernet Sauvignon and Merlot—the esteemed Grand Vin features the most Cabernet.

“These wines are being released this year,” says Génin. The 2011 Pauillac, $80 per bottle and meant to be enjoyed younger than the rest, has been selling steadily since January. Nearly 70 percent of its 4,500 cases are gone. A few weeks after my visit, 3,000 cases of 2008 Forts de Latour and 1,200 cases of the 2003 Grand Vin went on sale, priced wholesale at around $2,100 per 12-bottle case and $11,000 per case, respectively (they sold out to the trade within 48 hours).

A taste of the 2003 Latour suggests going long on aging before setting a price is a fine strategy: Sipping this vintage imparts a feeling akin to driving a classic Rolls-Royce after riding around for years on an unfinished chassis. For investors, the new system of release might also be a game changer. “To profit on great Bordeaux, you need to be prepared to hold the wine for at least 10 years,” says Adams. Now that it’ll be held for around 10 years to begin with—and in perfect conditions—the initial price may be higher, but holding a wine for the decade after that, until its 20th birthday or beyond, could result in even greater profits.

“But we are not a stock exchange,” says Jean Garandeau, Latour’s 33-year-old sales and marketing director. “We make wine.” After a vigorous swirl, the legs on the 2003 hang high on the glass and remain suspended like something abstract and penetrating from a Clyfford Still painting. Engerer has called this vintage “the sexiest Latour ever made,” and indeed, it now owns the room. The nose alone requires a few minutes of dedicated attention, and the words typically called upon to describe such things—truffles, cigars, leather—fall flat. After a first silent sip, then a second, it’s evident that the wine’s identity is perhaps better expressed as a feeling. “Each vintage is a different discovery,” says Pinault. “But each time, you are captivated. You let yourself become enchanted.”

It wouldn’t be wrong to say the 2003 smells like work; it wouldn’t be inaccurate to say it tastes like time. Another swirl, another sip, repeated until Génin breaks the silence. “Come back in 20 years, 30 years,” she says. “Just imagine what it’s going to be like then.”

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