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Ep 14 TNWG Wine Times: How to Read a Wine Label and the Monthly Asset Allocation

So I suspect we have all experienced at some point, going into a wine shop or a wine aisle and been flummoxed by a wine label, when all you want to know is the facts or information easily to digest. 🤔 Am I right? 


Well, fear not! I am here to assist with those problems and will address some below so get ready to take on a new perspective when you next hit the wine aisle or enter a wine shop.


To start with, you may well find that different countries typically have different rules on what they are required to outline on a bottle. As a general rule (and a bit of sweeping statement so don't hold me to it), new world wines typically are a little bit more simpler and therefore easier to understand.


For example, the basic information as depicted below is typically on the label of a wine bottle. Typically you would expect to find the following key elements on a bottle of wine:


  • The country of origin (where the grapes have been harvested and bottled)

  • The vintage (the year)

  • The brand or producer 

  • The grape varietal

  • Any awards they may have won with the wine (optional but may well be depicted as in this case)




Lyme Bay, Pinot Noir, Devon



However, here is where it starts to get a little more tricky. Depending on region or country and indeed between vineyards, there are different guidelines that they follow, which all in all, can be pretty confusing to the consumer. As we outlined above, some of the information on a wine bottle can be pretty self explanatory. 


Let's take a further example and this time of the 'Old World' in France to decipher:




Source: New York Times exert


If we take a look at the above, there are at least 7 things that give you reference to what is inside the bottle that I have labelled and this is also where people get a little lost with what is being told to the consumer. This is a classic label on a high end Burgundy red wine. One thing you will notice though and it is quite representative of some of the European high end locations, is that there is no labelling of the grape varietal on the label, so some prior knowledge of the usual grapes in a region is useful in knowing. With this for example being a Premier Cru Burgundy red wine, you would be right to assume that this is Pinot Noir.



1 = The name of the producer

2 = The region in which the grapes are grown

3 = Premier Cru - this is a status and standard level of the wine. In the Burgundy hierarchy, Grand Cru is the top level vineyard site, followed by Premier Cru. So this is indicating that the grapes were harvested from the Les Gruenchers, a premier vineyard within the Chambolle Musigny region.

4 = 'Appellation' - this word can be confusing especially when seen on a bottle, so let me tell you a bit about this. An appellation is a designated and defined legally define protected area/region for growing grapes. It must represent the laws applicable for the region and is controlled by an organisation responsible for ensuring that all legal requirements are adhered to. It is a European Union created term - namely AOC - Appellation d'Origine Controlee. What this then tells you about this bottle, is it is in line with regulations of the region.

5 = Mis en bouteilles par = bottled by in French terminology.

6 = Proprietaire-Recoltante = in this case it indicates that Ms. Barthod is both the proprietor of the estate and the grape grower. Not always shown on a bottle label but can be seen here in this example.

7 = Size of the bottle and how much within the bottle as well as the alcohol content of the wine.


Okay, so let's now try this out for an Italian wine:



Source: New York Times


1 = the name of the producer.

2 = The appellation in which the grapes have been grown - i.e. this was in Chianti Classico which is in the heart of the wider Chianti region.

3 = DOCG - this is the Italian version of the laws in wine. DOCG is the highest ranked designation in Italy and therefore by default, also the most carefully managed and marshalled too. This tells you that this wine bottle has to meet the highest of standards and so is a sign that this is a very good bottle.

4 = this gives you a description of where it is produced and bottled, ie by the Monteraponi estate. 

5 = Where the estate is situated, ie Monteraponi is situated in Siena.

6 = That is the Italian for 'contains sulfites' within the wine. 

7 = This small piece of information on the side of the label actually tells you the lot number or bottling date of the wine.


There is other bits of information of course on there as well, such as the percentage of alcohol and size of the bottle once more, but again notice it does not specific the grape variety on the label, as opposed to the example at the start which was the Devon Pinot Noir.


Another great example comes from Wine Folly who have depicted how to read a French bottle label:



Source: Wine Folly


Now you may also note, that not all bottles are as detailed as this and tell us as much about the wine. That is down again to their individual legal requirements from different countries. In the 'New World' it is quite often for bottles to show very little on the labelling. This is more brand marketing and brand representation more than anything. Below though is an example of a bottle from New Zealand which is very clear and lets us know the basic principles as given at the start of this newsletter.




Valli, Pinot Noir 2017


The most important thing to remember is feel free to ask - whether it be in a wine shop or ask The Northern Wine Guy - here to help and demystify those bottles to help you pick the right wine for you!



UNSUAL GRAPE VARIETAL / REGION OF THE WEEK


Te Kano, NZ - Central Otago - Cabernet Franc




Whilst not an unusual wine region these days, with Central Otago producing some truly memorable wines, it is unusual to see a Cabernet Franc there! However, Dave Sutton, head winemaker at Te Kano, has created just that and it is available to buy in the UK too!


This is (to the best of my knowledge) the only Cabernet Franc created in Central Otago currently. It is a very small batch from the Northburn site. The result is a beautifully constructed blackberry, blueberry and liquorice red wine on the nose. Followed up on the palate with raspberry and spice, with crunchy tannins and lively acidity this is a delight for the senses and made without any added sulphur too from the southerly most wine growing region on the planet!



🗞️ LATEST DRINKS INDUSTRY ARTICLES 🗞️


TOP ARTICLE OF THE WEEK


Far from my favourite beer, but this is an interesting development from Heineken. They have outlined the reason why John Smith's beer has been reduced to 3.4% ABV is down to health reasons. Could this be the next move from many drinks producers as health concerns continue to be heard and the increased availability of no and low alcohol options to the consumer. Interesting!


OTHER ARTICLES THAT CAUGHT OUR EYE:


📈 MARKETS IN BRIEF 📉


On the week (as at the close 02/02 LDN) changes:


EQUITIES: ⬇️ FTSE 100 down 0.02%; DAX flat; ⬆️ S&P up 1.3%; ⬆️Nikkei 225 up 0.59%; ⬆️ Dow Jones up 1.4%;


COMMODITIES: ⬇️ Brent Oil down 7.99% ; ⬇️ Crude Oil down 8.9% ; ⬆️ Gold up 0.94%; ⬇️ Silver down 0.5%; ⬇️ Copper down 0.93%


BONDS (in yield terms): ⬆️ UK 2yrs higher 0.111%; ⬇️ UK 10yrs lower 0.0305%; ⬇️ German 10yrs lower 0.07%, ⬆️ US 2yrs higher 0.023%; ⬆️ US 10yrs lower 0.118%;



ASSET ALLOCATION MONTHLY


An interesting first month of the year leads us to look at asset allocation. US equities have hit record highs, led by the tech sector and this is reflective of what seems to be a pretty solid economy in the US, as we enter a Presidential election year. Equity performance does feel a little toppy (i.e. has it gone too far now?) but with interest rates on hold and more likely than not to be cut rather than increased, I suspect for the near term this is going to continue to see out performance of the sector.


The FOMC decided to keep rates on hold at their most recent meeting but the press conference from Powell was very unusual and to be honest, quite conflicting and confusing. The reality is that I still see the US cutting interest rates prior to the summer and ahead of the elections, but for me this isn't a play until June, unless the data starts to come off quickly. 


In the UK, it is a different matter. I think the data, whilst not shocking, still is not looking rosey, that being said the Nationwide Index at house prices did increase month on month, showing that the housing sector is still pretty robust (albeit it is still negative year on year!). Interest rates are not going to be rising, they will be falling this year, so as in past messages, do not expect your interest rates on savings or ISA accounts to be going up. 


Fine wine has had a stuttering start in the first month of the year, with around a -0.5% fall in price, but this is a relatively subdued month and still think that after the 2023 revaluation of the market, could be a base from which to look to accumulate during 2024. 


The thought process on asset allocation here is to release some capital in the UK housing market where possible, lock in savings rates where you can at current levels prior to interest rate moves. Looking at equities, continue to favour US tech stocks, despite the fact that they are at highs although no new additions, more a long and hold strategy. For a more medium term outlook, look to be long the FTSE100 as UK interest rates are cut and taxation could be a question mark in terms of a possible political ploy in gaining votes by reducing it, which could also benefit company profits.


⭐ In short:


  • Reduce UK housing at still good levels but off highs of last year.

  • Remain long and hold US tech stocks or an S&P500 ETF if you prefer as an index.

  • Add some FTSE100 ETF / index tracker exposure for the medium term view.

  • Ad hoc look to add to Fine Wine holdings on availability of a specific vintage and any forced seller opportunities in the market place.

  • Lock in ISAs, savings and pension limits. 

  • In currency terms, I still like the US Dollar - so long vs EUR or GBP is a nice medium term play too here.

  • Gold - still have exposure, remain long and hold. No new additions currently. 



📢📢 ANNOUNCEMENTS 📢📢


🍷It has been a busy week this week, Edinburgh saw a great trade tasting from Wine Australia - showcasing some of the boutique names who are looking to capture some UK market share and it was great to meet some familiar faces too.


🍷This sets the tone for more trade tastings coming up this week - A Taste of New York in Manchester on Thursday and then VinExpo in Paris to follow.


🙌There have been a couple of announcements too more closer to home with The Northern Wine Guy gaining TWO residencies - firstly the first Wine Tasting in Sheffield following the move up north at The Picture House Social:


🙌 Secondly, an announcement that The Northern Wine Guy will also have a monthly residency at the Hideaway Bar in Sheffield too. More details to follow in the coming days on the timings and ticket availability too.



🎙️There have been a large number of podcasts undertaken this week too - if you have not taken a listen to them - here is the link to my website where you will find podcasts with Aidy Smith 🍷🥃 in our latest 'What Bottle Is On Your Table, Tonight?' Series. As well as an interview with Te Kano Estate from NZ - where Olly and I learned everything there is to know about Central Otago and the Te Kano Estate from head winemaker Dave Sutton. Look out next week for another podcast episode to drop too!


🎧 Don't forget you can listen to all of the episodes of both podcasts on Spotify, Apple and Amazon too!


👉 Next week we will likely be out taking in VinExpo in Paris before sharing our thoughts on some hidden gems, see you in a couple of weeks and as always keep the reviews, comments, messages, DMs coming!


Best Regards

Andy a.k.a. The Northern Wine Guy 🍷

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