Wine investing uncorked – how to start your wine portfolio
If your appetite for a bit of viticulture investment is suitably whetted, here are some tips for bagging (and storing) those top-drawer bottles and avoiding the pitfalls of plonk.
1. Know your wine.
‘Invest in “liquid” wines; those, in other words, with sufficient liquidity and volume of supply, and wines with well- established track records,’ advises Dehn. ‘The risk profile of the investment can rise considerably if the wine portfolio contains wines with less financial liquidity, very young or en primeur wines [wines that are still in the barrel], those older than 25 years, and vintages not in standard-sized bottles.’
2. Choose your buying method. South African investors have several ways to create a portfolio of wines:
• First choice would be to buy from the vineyard directly, especially en primeur: Provenance is guaranteed, the price is the absolute best and storage could be at home or at a merchants’.
• Second choice would be to buy at auction, which gives individual investors the opportunity to acquire small-lot investment- quality wines, though provenance is not always guaranteed and competition from trade buyers is often fierce.
• Third choice is to buy through a reputable merchant or broker such as The Reciprocal Wine Trading Co. (reciprocal. co.za), The International Wine Company (internationalwines. co.za), Caroline’s Fine Wines (carolineswine.com) or e-retailer Cybercellar (cybercellar.com) – all established local dealers who offer access to investable wines, knowledge and advice, possible storage facilities and delivery. While there is as yet no blue-chip trading on South African wines, wine fund or specialist wine- investment companies, such as Wade Bales’ Wine Futures Plan, for instance, gives investors the benefit of the investment choices of wine pros, a bit like buying unit trusts through Coronation or Allan Gray.
• Your final choice is to buy from retailers. Despite paying retail margins, there may still be profit possibilities in the mid to long term.
3. Choose your storage method.
Once you’ve acquired your wines, you’ll want to make sure they’re stored safely and securely, in a place that will allow gradual and undisturbed maturation. While many collectors make use of specialised wine coolers, if you’re not hell bent on stroking your bottles every night, consider employing the services offered by wine-storage professionals,such as the Bergkelder Vinotèque Wine Bank in Stellenbosch. Says manager Michael van Deventer:
‘In addition to offering the best conditions for storing investment wines, including back-up generators for cooling, benefits include increased storage space and state-of-the-art security, not to mention annual maturation reports.’ 4. Bide your time. Wine is not a commodity that provides fast returns. WineFolly.com states that investors should expect to wait six to 10 years for their portfolio to achieve substantial value.
Grapes under the gavel
Ever fantasised about acquiring the bragging rights to a bottle of Dom Pérignon Magnum 1971 signed by Richard Geoffroy, Chef de Cave of Dom Pérignon, himself? If so, then The AfrAsia Bank Cape Wine Auction is the place where wine lovers’ dreams could come true. Tipped to be the must-attend social gathering of the 2014 South African wine calendar, the event is modelled on the famed Auction Napa Valley, which, for 32 years, has seen denizens of the celebrated Californian wine- growing county come together in mutual appreciation of the best of the vine while, at the same time, digging deep for a noble cause.
In addition to the impressive sponsor list (which includes a number of business heavyweights, like AfrAsia, three-time consecutive winner of Euromoney’s Best Local Private Bank Award, and British Airways), 20 so-called ‘ambassadors’ have signed up to the task of promoting the auction in their fiscally well- endowed circles, as well as to curate the auction lots. This means that auction attendeeswill be offered the chance to bid on everything from that coveted rare Dom Pérignon Magnum (part of the lot compiled by Paul Harris of Ellerman House) to four nights’ safari at Wilderness Safari’s Mombo Camp in the Okavango Delta (included in the R125 000-valued lot offered by De Toren Private Cellar).
Described by chairman Mike Ratcliffe as ‘an event to unite the industry around a common charitable initiative, a global branding opportunity for South African wine, and a memorable party’, the three-day auction is expected to see some 250 guests in attendance, with half of those jetting in from abroad.
No doubt, then, that the chances of getting our hands on one of those coveted tickets are, to all intents and purposes, going, going, gone…
• Bergkelder Vinotèque Wine Bank A Stellenbosch-based storage facility for wine and spirits where private collectors and restaurateurs can store and mature their cellar gems in perfect conditions and under
the watchful eye of experts. vinoteque.co.za
• Cape Legends The marketing custodian of a portfolio of wines from 11 award-winning Winelands’ boutique estates, which offers a wine-club style buying service with members-only exclusive benefits. capelegends.co.za
• Liv-ex Generally considered
the global marketplace for professional buyers and sellers of fine wine, this 1999-established independent body regulates the standards of transparency in what is often considered an opaque market. Its services include an online-trading platform, data services and a specialist logistics solution. liv-ex.com
• Wade Bales’ Wine Futures Plan The private-investment arm of well- known Wade Bales Wine Society was established in 2001 to source, for discerning collectors and investors, limited-release blue-chip wines while they are still maturing in the cellar. wadebaleswinesociety. co.za/investment-wines
• The White Club An independent fine wine and Champagne connoisseurs’ club that is based in Switzerland but includes a global membership. At regular tastings held in various five-star venues around the world, members enjoy such wines as Dom Pérignon Rosé 1959 (the rarest Champagne in the world; the kind served by the Shah of Iran at his wedding and a bottle of which fetched US$85,000 on auction in 2008). thewhiteclub.com • Wine Cellar A respected Cape Town-based importer of fine
wine, with a specialty focus on Bordeaux wines. Services include cellaring, a brokerage service, fine wine tastings and a shipping from London City Bond to Cape Town in refrigerated containers. winecellar.co.za
• The Wine Investment Fund
A globally based independent professional wine investment company that works with institutions, financial intermediaries and private investors worldwide. wineinvestmentfund.com
‘An icon wine is determined by marketing, ratings and price. To me, an icon wine is “made”, not manufactured. It means
low yields, manicured vines, hand destemming, absolute commitment’
– Emile den Dulk, collector and owner of De Toren Private Cellar