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futures

A product that’s purchased upon agreement of delivery at a specified future date. In the wine world, this equates to buying wine futures prior to the wine’s release, which, in many cases, can be as much as two years in advance. Futures can usually be purchased directly from the winery or from wine retailers. Some American wineries, like Château Montelena and Ridge, sell futures for their top CABERNET SAUVIGNON wines at prices lower than what the suggested retail price will be when the wine’s released. This practice typically works as a win/win situation for both parties—the winery gets advance payment and can put that money to use, the consumer is assured of getting the desired wine at a lower price (in most instances) than it will be upon release. Occasionally, it’s possible to purchase a given wine 18 months after the futures release for less than the futures price. This happens when early hype for a vintage pushes up a futures’ price, and then subsequent events moderate the released wine’s retail price downward. The practice of selling futures is often associated with French wines like those from BURGUNDY and BORDEAUX, especially highly sought after wines, such as those from FIRST GROWTH châteauX or SUPER SECONDS. In France, buying futures (en primeur) is a much more evolved practice than it is in the United States. The individual producers, like the Bordeaux châteauX, set the price they’re going to charge for the initial limited portion (premier tranche) of a vintage’s wines; sometimes additional tranches are offered, depending on demand. Then NÉGOCIANTS, who generally sell these wines for the châteaux, pass these futures on through the distribution channels. In the United States, these French-wine futures come to importers, who typically sell to wholesalers and retailers, sometimes directly to individuals. Along every step of the way, each entity adds their cut to the consumer’s price (which, of course, is also true for a bottle of wine). When purchasing futures it’s important to find a reputable, well-established merchant. There’s a significant wait for delivery of this wine bought on futures and you want to ensure that the merchant will still be there when the wine is released. Of course, in transactions like wine futures, there’s always a risk of failure by someone in the supply chain or possible fraudulent dealings by disreputable merchants. Caveat emptor.

Related Links: Cabernet Sauvignon, Burgundy, Bordeaux, first growth, super seconds, né

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