The fine wine market had an exceptional year through 2016 with many wines climbing to their highest levels since 2011 and its this performance that has many people viewing the wine market as a suitable store of capital, or safe haven, similar to Gold during these uncertain times surrounding Brexit.

 

The recent global rally of stocks has left many investors in a fairly comfortable position but, as most would be aware, equities have a history of volatility and it it usually only a matter of time before performance starts to tail off. So how do you protect the gains you have made?

Tangible assets, or real assets as they are sometimes called, are physical assets that for many have been a traditional safe haven or store of value. The main strategy is to take capital from a more volatile area following a period of good performance and transfer it to an area that is less volatile for longer term growth, therefore protecting your capital and in turn lowering the overall volatility of your investment portfolio.

The fine wine market had an exceptional year through 2016 with many wines climbing to their highest levels since 2011 and its this performance that has many people viewing the wine market as a suitable store of capital, or safe haven, similar to Gold during these uncertain times surrounding Brexit.

Fine wine’s controlled supply and healthy demand usually helps to keep the market performing well, even if traditional areas begin to falter. The current weakness of Sterling is also helping to make UK based wine stocks much more attractive to global buyers and has given the UK fine wine market a welcome boost. Asian investors have also begun to return to the market after their excitable flurry of trade between 2009 and 2011 which is widely cited as a major factor in the market adjustment that followed.

The wine market’s leading benchmark, the Liv-ex 100, has gained for the past 14 months consecutively. This is the best performance the market has seen since 2010 and resulted in the index delivering 25% during 2016 in comparison to the FTSE’s 19%. For those fearing a repeat market adjustment the Liv-ex 100 is still 18% below its previous peak point in mid-2011.

Unlike equities, fine wine should be given a long term view and historically the longer the view the better – the longer you hold on to fine wine the more consistent the returns can become. This is because of the supply and demand nature of the market, the longer you store a classic vintage of Bordeaux the more drinkable it will become and less of it will remain in circulation which should push values upward.

The fine wine market is being used by an ever growing number of investors as it offers portfolio diversification, consistent returns and potential tax benefits, something that investors will be seeking to build on as global economic and political uncertainty continues.

If you would like to make some purchases specifically for longer term growth Cult & Boutique Wine Management will be happy to recommend the best wines for your portfolio.

by Spencer Leat

Many years ago, just after I left school, I worked as a Production Assistant in a publishing company in Muswell Hill in north London, down the road from where I lived. The Production Director was quite eccentric – my interview for said post took place at 6pm in the evening, lasted two hours and included him inviting me to sing a few bars of a Mahler symphony.

He wrote a cookery column in the Saturday Telegraph magazine. The column would normally consist of two paragraphs of him writing in amusing vein – reminiscing, say, about having been taken to tea by his grandmother at Fortnum & Mason, and then for the final paragraph ‘doctoring’ a recipe from The Reader’s Digest Cookery Year, altering quantities here and there for copyright purposes.

What, you may be thinking, has any of this got to do with your roving correspondent’s contribution to this newsletter? Well if I’m not careful I may take you all on a streams-of-consciousness-type journey as I wax lyrical having just returned from a few days in Burgundy, an area of France which remains very close to my heart having spent a year as a student at Dijon university in the early 80’s. My visit may or may not have been prompted by a quite exclusive Burgundy ‘En Primeur’ tasting of the 2015 vintage that I went along to recently.

The two producers showing were Bouchard Père et Fils and William Fèvre and the venue was Brown’s Hotel in Mayfair, and was different again to the St Emilion and Bordeaux tastings I had been along to before. I felt as though it was a more intense occasion than either of the Bordeaux tastings, which might have been due to the dimensions of the room, which was the size of a private dining room. The intensity of the occasion was slightly leavened by the presence of Robin Warren-Adamson, our contact with the distributors, who did his utmost to make me welcome.

I have to say that unlike the Bordeaux tastings, neither producer had wines from earlier vintages to compare tastings of the new growth with – so I felt slightly short-changed. This difficulty was particularly evident when tasting the whites, as generally speaking they all lacked, doubtless as a result of their newness, much in character to distinguish one AOC from another. I even had a job to enthuse about the Corton-Charlemagne, from Bouchard, which has always struck me as the ne plus altra of Burgundy whites. It also told me that tasting wines ‘en primeur’ is not an easy thing to do by any means and that you can never learn too much about what to look for when swilling a mouthful of grape around your palate.

The reds were generally more interesting – no surprise there then! – a lot of typical, subtly fruity Pinot Noir softness. It is ever a surprise to me that these tiny villages – Volnay, Pommard, Chambolle-Musigny – often one-horse towns, have around them some of the most valuable real-estate in the world, because of the quality of the wines produced in a comparatively small geographical area.

The powers that be have asked me – quite a privilege this – to recommend one white wine and two reds from the 2015 Burgundy tasting, which I am delighted to do for them and for you.

Here goes: my white selection is a Chablis Grand Cru Vaudésir from William Fèvre. My two permitted red selections are: Savigny-les-Beaune and Le Corton Grand Cru, both from Bouchard Père et Fils. I was particularly impressed with the Le Corton, not having come across it before.

And finally, here is a surprise tip! Wandering around the streets of Beaune on my recent visit I came upon a wine-bar, La Maison de Maurice, where I tasted a very fine St Aubin Le Ban 2009 from Domaine Derain. A magnum would have cost me 65 Euros, so it’s not top-end in price, but it speaks to me of the essence of the ‘terroir’. I have no idea where to find it in this country but we have people working on it as I write. Santé!

William Fèvre Chablis Grand Cru Vaudésir – Fresh, refined aromas of flowers and fruit. On the palate, it is distinguished by particular subtlety: a delicious blend of softness and liveliness. Round and airy, it is very charming from its first youth.

Bouchard Père et Fils Savigny-les-Beaune
– Delicate bouquet with berry fruit notes. On the palate, seductive with the subtle intensity of its aromas and for its tenderness. Good ageing potential.

Bouchard Père et Fils Le Corton Grand Cru – Intense bouquet with aromas of red and black fruit, spices and a touch a oak. Rich and structured on the palate, this wine needs a bit of patience in order to reveal its raciness and great distinction. Excellent ageing potential.

by Jonathan Whittley

 

I have a very soft spot for Ormes de Pez as some years ago I asked the sommelier at Le Chapon Fin, a very fine-dining restaurant in the heart of Bordeaux to produce a wine flight for me with my three course dinner there.

 

After the hustle and bustle of ‘IMBIBElive’ I was pleased to be dispatched to the more select surroundings of the Royal Horticultural Society halls in Westminster in October to the annual tasting hosted by the Union des Grands Crus de Bordeaux, this year presenting its 2014 vintage. With 110 members represented, and only four hours to pace yourself tasting, it is impossible to taste wines from every chateau, but I did get round to tasting wines from most of the 13 ‘appellations’.

I am discovering that the pleasure of these occasions is not derived solely from tasting some Class A claret, but also that you tend to bump into the same faces while you are tasting, which cannot help but contribute to the proceedings. My old friend Douglas Harrison, who I ran into at the Leadenhall Saint-Emilion tasting, pointed me towards Chateau Gruaud-Larose from St Julien, which shows great promise. At the Leadenhall tasting I had also met Nick Breeze, who runs a very lively wine blog. Here he was again, and I pointed him in the direction of Chateau les Ormes de Pez, from St Estephe.

I have a very soft spot for Ormes de Pez as some years ago I asked the sommelier at Le Chapon Fin, a very fine-dining restaurant in the heart of Bordeaux to produce a wine flight for me with my three course dinner there. The restaurant is unusual in that one wall is composed entirely of coral. I sadly forget the dish which the sommelier chose to pair with a lovely glass of Ormes de Pez, which was not in itself of no consequence, but the wine I found quite memorable and have enjoyed several glasses since. Oh yes, and for the record Nick Breeze found it the most interesting from a dozen chateaux from the same region side by side along the table.

More recently, I stayed at Le Moulin de l’Abbaye in Brantome in Perigord. All the bedrooms were named after Bordeaux wines or regions, and mine was named ‘Cos d’Estournel’, a well-known Saint-Estephe. Sadly this chateau was not represented at the tasting , but one which was was Chateau la Dominique, a Saint-Emilion, which I had read has a new cellar, coloured bright red, designed by the architect Jean Nouvel. I engaged the general manager in conversation about this, and will pay it a visit next time I am in the area.

I also tasted a very fine Chateau Pavie-Macquin, a domaine I was already familiar with from the St Emilion tasting earlier in the year, recently awarded (91 – 93) points by Neal Martin of The Wine Advocate. I had seen it on another prominent wine merchant’s website, and as chance would have it I bumped into the founder very near the table, so I mentioned the Wine Advocate score. He replied rather loftily – I choose my adverb carefully as he stands at over 6 foot – that ‘points are points’, with a slight ‘harrumph’ in his tone, suggesting that he didn’t set great store by them. I can see that he has a point (sorry), as although Neal Martin is a fair and renowned guide, how you apportion points can often be very subjective. I tend to think of them as rather like school league-tables, which register the percentage of exam grades attained while telling you very little about extra-curricular activities or the character of the institution as a whole. The merchant in question does however make a point (last time, honestly) of including this information on his website.

I am writing this shortly after the annual wine auction at the Hospices de Beaune takes place. I hope to write a little more about this event and Burgundy in the next newsletter. ‘Sante!’

by Jonathan Whittley


The Penfolds Collection 2016

Cult & Boutique Wine Management were very privileged to receive an invitation from Penfolds to an exclusive tasting of The Penfolds Collection 2016 Preview, held at The Institute of Directors in Pall Mall on 29th September.

Daniel Paterson and Spencer Leat attended, along with an impressive contingent of UK wine critics and writers including Oz Clarke (TV & Press), Steven Spurrier (Decanter), Anthony Rose (The Independent & Decanter), Sarah Ahmed (Decanter) to name but a few faces, as well as select members of the UK fine wine trade.

The preview offers the trade and press an opportunity to sample the latest Penfolds releases ahead of their official release in October and covers a broad selection of the range, from the bottom right to the top.

For the 2016 Collection Penfolds have teamed up with French Maison Saint-Louis, the oldest glassmaker in Europe and one of the most prestigious crystal houses in the world, to create some interesting pairings with their flagship wine, The Grange.

Of the 13 red wines and 4 whites on offer we managed to whittle our favourites down to five wines from across the range, listed below in ascending price order.


Spencer & Peter discuss winemaking processes

Bin 51 – Eden Valley Riesling 2016
Trademark florals, zesty acidity and pronounced varietal flavour expression reinforce Eden Valley as a Penfolds Bin 51 Riesling region of choice. Will not disappoint. No doubt many ice buckets patiently await!

Bin 150 – Marananga Shiraz 2014
Sub-regional pedigree re-defined, courtesy of Marananga and four of the six local growers who also contributed to its 2010 delivery. An oscillation of power and refinement, presence and poise. 40% of blend captured and nurtured in puncheon. Vibrant, vivacious and vital.

Bin 389 – Cabernet Shiraz 2014
At this stage Cabernet in winning in the 2014 Cabernet and Shiraz tumble… Sits at the defined / linear end of the structural spectrum, albeit still retaining a succulent and juicy texture, tempered by mouth-watering acidity.

St.Henri – Shiraz 2013
Things are getting serious in an understated St Henri sort of way! This wine may be initially missed on a busy tasting bench but once properly tasted, never forgotten. Reminiscent of the 2010, 1998 and 1976 St Henri’s – statuesque, brooding, complex and aromatically ‘Old Style’. All Penfolds 2013 reds released to date have benfitted from time in bottle. No exception here but okay to open now or will cellar for the next four decades, plus!


Daniel Paterson with Peter Gago, Chief Winemaker, Penfolds

Grange 2012
Sometimes tasting notes such as these are difficult to articulate. Not this time. Channeling the 2010 Grange – an unfolding kaleidoscopic vinuos mosaic of charm, allure, character and cerebral reward. Complete. Stylistically, most closely aligned to the 1963 Grange and yet extolling it’s own personality. Luxury that treads lightly!

All in all we were very impressed with The Penfolds Collection 2016, aside from the usual suspects that clients will recognise from their portfolios, Grange & 707, there were some great wines from lower in the hierarchy that punched way above their weight. Its still too early to give full details but we have some plans on the horizon that will offer Cult & Boutique clients an opportunity to acquire some of these wines at very competitive prices – so watch this space.


Daniel (left) with Peter Gago (right) and Steven Spurrier (far right) – Oz Clarke in the background!

by Spencer Leat

 

The palatial exhibition hall was teeming with all sorts and conditions of tattoos, beards and geeky glasses

 

We sent Cult & Boutique Wine Management’s Jonathan Whittley along to two recent trade events to offer clients a peek behind the curtain. The Saint-Emilion tasting in the City of London offered the latest 2015 vintage from a selection of Chateaux along with older vintages of the producers choice. This was closely followed by a visit to IMBIBElive at Olympia in Kensington which has a much broader range of drinks trade related stalls as well as catering to the discerning wine buyer and consumer.

Saint-Emilion Grand Crus Classes Tasting

The Leadenhall Building is one of an ever-increasing number of landmark skyscrapers that are springing up on London’s panorama. Commonly known as ‘The Cheesegrater’ and designed by the Rogers Stirk Harbour Partnership – yes, Lord Rogers of the Lloyds building – it is angled at 10 degrees to accommodate planning requirements protecting views of worthier and more ancient landmarks such as St. Paul’s Cathedral and the Palace of Westminster.

The venue almost at its 250m summit is called ‘Landing 42’, and I had the good fortune to be dispatched there by the powers that be at Cult & Boutique to a tasting given under the auspices of the ‘Association de Grands Crus Classes de St Emilion’.

If that sounds quite a mouthful, it was as nothing to the several mouthfuls of extremely good vintages of St Emilion I tasted, some of which I actually swallowed completely on good advice!

The base of the cheesegrater forms a canopy over the street beneath it. Reception, which I would guess is on the third storey, is reached by an escalator from the street. There was a suited discreet gentleman beside the escalator in order to prevent undesirables going up it . I told him that I was here for the wine-tasting and he said I was to give my name to the “girl over there”. The GOT, on whose i-pad shone my credibility, was equally charming and motioned me up the escalator, by-passing tedious TfL- style security gates and up in a lift to the 42nd floor-a journey which took all of 30 seconds, just like it said in the blurb.

Spencer had said to me that I would be in my element as a fluent French speaker, as everyone at the tasting he attended last year spoke in French. It may have been something to do with the low ceiling and the spectacular vistas of the metropolis to be viewed all around, but in a slightly serious and hallowed atmosphere I could actually have done with speaking a little more French than I did.

The first person I recognised was an old wine hand I know called Douglas Harrison, of Harrison Wines in Ealing. He is a man who knows his Julien from his Estournel, and so when he pointed me in the direction of a 2005 Chateau La Tour Figeac and said “Don’t spit it out !” I was hardly likely to disobey him.

On these occasions you can learn as much from the various people you meet as you can from tasting the wine itself. I became aware of an organisation hitherto unknown to me called the ‘Jurade de St Emilion’, a brotherhood of wine enthusiasts acting as ambassadors for St Emilion across the globe, and assuring its quality control. It even boasts an English Branch, with two ‘Chancelleries’, one in London and the other in York. The Chancellor of the Chancellery of York is a very genial barrister called Tim Hartley, who went to some length to tell me that the St Emilion brotherhood was founded centuries before its Burgundian counterpart. I actually don’t think he’s quite right, as his brotherhood was ‘resurrected’ in its present form in 1948, after its predecessor, carrying much greater jurisdiction, was disbanded in 1789. But there’s only a few years in it, the Confrerie des Chevaliers du Tastevin in Burgundy having been founded in 1934, so I’m not going to argue too much.

All in all, as is to be expected, one 2015 vintage St Emilion ‘Grand Cru Classe’ tasted much the same as another at this very early stage – all were stunning in their own right and 2015 will definitely be a Saint-Emilion vintage to watch, so expect high scores from the critics. The fun was to be had tasting the greater and more noble vintages (and chateaux) to give the wine-buyer an idea of what their investment could produce in years to come. But by all accounts, when the time comes, I will be very hopeful that future generations can deliver the same verdict on St Emilion 2015 as did Mr Sinatra on another subject : ‘ It Was A Very Good Year’. He was singing about love as ever – but then when hasn’t a glass or two of good wine helped that along ?

IMBIBElive 2016

If the Leadenhall St Emilion tasting could be characterised as a tweedy, sage, anecdotal uncle, then ‘IMBIBElive 2016’, which took place in early July at Olympia, was definitely his all-singing, all-dancing teenage niece. The palatial exhibition hall was teeming with all sorts and conditions of tattoos, beards and geeky glasses.

IMBIBElive is a trade fair geared in large part to the drinks on-trade : cocktails, beers, spirits etc., so not of great interest to the discerning Cult & Boutique wine investor. Several of the above mentioned fashion specimens wore lanyards proclaiming ‘Bartender, Dog and Duck’ and suchlike, and had figures to match. But there were some informative wine seminars which I had put myself down for.

The first and probably best of those I attended was a palate training exercise, effectively a blind tasting, presented by Ronan Sayburn – a Master Sommelier. Four wines were placed in front of us, white and red, young and not so young, and it was down to us to guess – looking at acidity, colour, legs – where they came from. Along the way we learnt a lot about what to look for and how to describe features and taste. A word which has hitherto not graced my vocabulary is ‘anthocyanin’, which I encountered for the first time, and without wishing to go into geeky wine-chemistry detail, is an agent in the colouring of red wine.

The next seminar on my list was entitled ‘Orange Is The New Wine’ and centred on the current trend for orange wine. I would be quite happy, as I am with several current trends, to pass it by. It involves leaving the grape skins and seeds in contact with the juice while fermenting , producing the orange colour. Again there were four wines in front of me, and I can’t say I found any of them interesting. They were all quite bitter, and tasted variously of Campari – which I don’t like anyway – or rather musty Grand Marnier.

I am afraid that a small domestic crisis involving a cracked water-pipe prevented me from attending a Food and Wine Pairing seminar the next morning, though I did manage to make it to a session on biodynamics. This was given by an Austrian whom I might describe as the Billy Graham of organic wine-growers. He was very evangelical about his craft, how it did the least harm to the environment – no pesticides etc – but after 20 minutes of monotone heavily accented ranting I gave up and went to have a glass of very good ‘Assemble’ Methode Traditionelle Brut from No1 Family Estate in Marlborough NZ. How could I resist it when poured for me by the charming Virginie, who is the daughter of the Family, and her stand, under the Amathus Wines umbrella, had a prime position just inside the entrance to the hall.

The final seminar I went to was Jeremy Seysses, of Domaine Dujac in Burgundy. We compared a number of different appellations from the same year -2013- with the same one across different years, stretching back 20 years. As with the St Emilion tasting, all the 2013 wines had yet to release their full potential, whereas the vertical tasting was more interesting, a 2001 Clos Laroche being my favourite.

So to sum up my visit to IMBIBElive , I would say that although it is first and foremost not an exhibition primarily angled towards the typical Cult & Boutique client, the wine seminars were interesting and informative, and I did come away with more knowledge of an area where the discerning wine-investor can never know too much.

by Jonathan Whittley

If you are a Cult & Boutique client you should have received a letter from us recently announcing the relocation of our company and client stock holdings from London City Bond in Hillington, near Glasgow to their state of the art fine wine storage facility named Vinothèque, in Burton-upon-Trent.

As stated in the letter, this is a huge bonus for our clients, as we have negotiated with London City Bond for our clients to continue paying the lower priced Hillington rates for storage at Vinothèque. Stock movements began on 6th June and are anticipated to take between two to three months to complete. If you haven’t visited your wines before, we would highly recommend a journey to Burton-upon-Trent to be shown around once the relocation is complete.

If you have any questions feel free to contact your Portfolio Manager directly but in the meantime ahead of the relocation of our stock holdings to the Vinothèque facility, we spoke with the General Manager, Jane Renwick to find out more.

How long have you worked at London City Bond?
I have been working for LCB Vinothèque for just over 3 years; previously I spent 20 years with Octavian.

What does your role as General Manager at Vinothèque involve?
As General Manager I am involved in the day to day running of the operation; a few examples of my duties are the maintaining of customer relationships for both the internal and external customer, looking at ways to improve our processes and make the necessary changes, system improvements/enhancements, marketing, accounting/budgets and staff development. I am fortunate in having a very dedicated and strong Management team who work alongside me in making Vinothèque a leading fine wine storage facility; we are constantly looking at ways to improve our services to make the experience of storing fine wine as enjoyable as the product itself!

What keeps you inspired at work?
Having worked in the wine industry for over 23 years, I still feel as passionate about the business as I did on my first day. My role is very diverse and I am engaged with the business at every level so no one day is the same. Working for a prestigious, forward thinking company has allowed me to expand my skills and develop those of my staff. I am a great believer that within the service sector people make a business, the more you engage with your staff the more effective they become resulting in more reward for all parties.

What makes Vinothèque unique in the world of wine storage?
The people! With an average length of service of more than 10 years, staff turnover at Vinothèque is extremely low. We believe product knowledge is a key requirement for our team and as such we have encouraged them to progress through the industry recognised Wines & Spirits Education Trust programme. Vinothèque has undergone extensive refurbishment whilst in the ownership of LCB, including a spend of £1 million to install fully controllable air conditioning and humidity control, capable of allowing us to maintain the temperature of 13 degrees plus or minus 1 degree throughout 365 days of the year. Should there be any deviation from this, for whatever reason for more than 20 minutes an alert is automatically sent to senior members of staff. This is a unique system within warehousing of this type anywhere in Europe.

We won the Best Supply Chain Innovation Award in 2015 for our commitment to our customers to ensure that their wines are stored and matured in perfect conditions.

All deliveries from Vinothèque are provided by our unique and dedicated LCB network, which in peak times can deliver more than 20,000 orders each week through its hubs in Tilbury, Barking, Cambridge, Melksham, Burton upon Trent and Glasgow.

What are the benefits of storing wine at LCB Vinothèque in comparison to LCB Hillington?
We have invested heavily in a bespoke air conditioning and humidity control system making conditions perfect for the storage of fine wines, coupled with enhancements to our security system, to include 24 hour external CCTV monitoring and an on site security guard. With over 6,000 private customers holding their fine wines at Vinothèque we understand the importance of customer care and as such have a dedicated and experienced customer services team who will assist the customer with all types of enquiries allowing for one point of contact and by having such individual attention it has proven to be a great way of building a solid business relationship. The introduction of a bespoke photographic studio allowing the customer to view their bottles of wine and case from their own computer in the comfort of their own home has proved invaluable, of course for trade customers it is a great tool when looking to sell or buy wine.


Inside the Vinothèque warehouse

Is it a huge undertaking to relocate our Clients’ wines to Vinothèque?
We are very experienced at transferring fine wines whether they are from another bonded facility or a private residence but we will monitor the entire process to ensure a smooth transition and keep you updated on progress on a regular basis. Our ultimate aim is to ensure there is no interference with our services and that you and your customers experience a seamless transfer.

What is the process if our Clients want to visit Vinothèque to see their wine and the premises for themselves?
Something we always encourage, not only for the purpose of the customer being able to view their wines within our bonded facility but also this allows them to meet our teams, put a name to a face. However, we would ask the customer to make contact with Cult & Boutique in the first instance to advise of their request. This ensures that all parties are aware of the visit for the purpose of planning with our Stock Control team and for security reasons.

What is the total capacity of Vinothèque and what plans do you have once it’s full?
Our current stockholding is 520,000 cases, when Vinothèque reaches capacity we plan for other facilities around the country to include an additional site with Burton.

Do our Clients’ wines have the same level of insurance cover as they had at LCB Hillington?
All terms remain unchanged.

On the rare occasion that you get some down-time, what’s your drink of choice?
Love bubbles – in particular Taittinger Champagne!

 

I do take the wine very seriously but you have to be humble in this job. There are a lot of egos but I am not like that. I like to bring in my Essex roots

Neil Martin

 

For years people have contemplated what would come of the wine market once Robert Parker Jr retires. Mr Parker has been the major driving force in the fine wine market for decades and his scores have been known to make or break a wine. Parker is responsible for establishing the 100 point scoring system for fine vintage, a system that has been adopted by all but the most stubborn of critics.

First he withdrew from tasting En Primeur Bordeaux and handed that privilege to a younger and fresher member of his Wine Advocate team named Neal Martin. This came as a shock to many as the Bordeaux En Primeur tastings are seen as one of, if not the most important task in fine wine critique. Neal took the baton and ran with it. His younger fresher style with obscure references to pop culture and contemporary themes made sure he stamped his mark on the role, rather than just trying to be Mr Parker II.

Then, in April this year, Parker announced that he would also be stepping down from tasting bottled Bordeaux. This also transfers the important 10 year reviews to Neal Martin which have become a benchmark for measuring a wines actual development against its predicted development and again is a hugely important part of fine wine critique.

Neal grew up in Essex and worked as a part time DJ. By his own admission he claims to have drank only cider and Liebfraumilch, or sometimes Mateus Rose on special occasions. He began working for a company in his mid-twenties that exported wines to Japan and this is where his passion started. By 2003 he had started his own online wine blog which soon amassed over 100,000 readers due to his abstract approach to writing. Soon after he was picked up by Parker and taken under his wing.


Daniel with Neal Martin @ Matter of Taste London 2015

Parker has not retired completely, he has reduced his tasting responsibilities to California and the odd wine from elsewhere that he feels like tasting, good work if you can find it! But what will come of his previous scores? A Parker 100 point score has been seen of THE ultimate seal of approval and would ensure a wine’s future market performance and liquidity. The general consensus among trade and in the market appears to be that his perfect scores will always be seen as the greatest examples of the wines that received them. In fact, Liv-Ex have already created a new index named The Parker 100 to track the price performance of every wine with a perfect 100 point score from Parker.

In the last few years, post-bull market and adjustment, the trackers for the Fine Wine 50 Index and the Parker 100 Index have beaten a fairly similar path. With Parker’s announcing his retirement and the supply of Parker 100-point wines therefore finite, we feel they will begin to outperform their counterparts considerably.

It is yet to be seen whether or not a Martin 100 point score will carry the same gravitas as his predecessor but early signs are positive. Neal Martin is a very knowledgeable and hard working individual with a huge amount of integrity that might just have what’s needed to inject a new lease of life into the market and attract younger fine wine enthusiasts. In the words of Robert Parker himself “This was actually the ultimate plan way back when Neal was first hired. Neal is a natural and, coincidentally, the best prepared for the job. I think it is important for us to ensure the continued unrivaled coverage of Bordeaux that made The Wine Advocate famous and improve on it. En primeur tastings have been an important and dramatic part of my professional life. I loved the anticipation and challenge of trying to analyze and evaluate a vintage and will undoubtedly miss it. But after 37 years of covering virtually every Bordeaux vintage since 1978, change is inevitable. I have total confidence in Neal’s independence, work ethic, and abilities.”

by Spencer Leat

 

The fine wine market really comes into it’s own when the supply starts to tighten and a wine becomes a collectable ‘trophy’.

 

Clients often ask us to explain the differences between medium and long term price performance and which would best suit their portfolio. There are a lot of variables at play but also some basic forces that you should be aware of before making any plans for the future of your portfolio.

The wine market revolves around the basic principles of supply & demand but quality, longevity and price also have a hand in determining your potential for growth. In layman’s terms you need to acquire the highest quality ‘investment grade’ wine you can afford, at the right price and allow plenty of time for the supply and demand of that wine to swing in your favour.

As these wines age not only do they improve in quality but naturally, as people begin to consume the more mature stock, the quantity of that wine available on the market decreases which should drive values upward. For over a decade Cult & Boutique Wine Management have supplied wines with five years storage and insurance included in the purchase price, as historically this has proved long enough to generate an adequate level of capital growth. However, the market has changed dramatically during the last decade and one of the most important lessons time has taught us is that you should also consider the benefits of a longer hold term of ten or fifteen years.

Take the example below, the 1982 Chateau Lafite Rothschild was first offered to the market in 1983 at a whopping £275 a case. Over the following five years the value of this wine gained an impressive 118% at which point we’re sure many investors disposed of their holding and were happy with their gains, and who wouldn’t be.

In the following chart we have extended the hold term by an additional five years to show a ten year hold. You can see that trading starts to become more frequent, as the wine is beginning to approach or enter critic’s suggested drinking windows and people start to acquire for consumption. After 10 years the Lafite ’82 managed 209% growth, again very respectable.

The fine wine market really comes into it’s own when the supply starts to tighten and a wine becomes a collectable ‘trophy’. If we fast forward an additional ten years and display a twenty year hold term the results are very impressive, achieving over 1,300% growth. Again you can see the frequency of trading increase as buyers rush to take a position with what is fast becoming a very lucrative asset.

By the time Lafite ’82 reached it’s peak price in 2010 it had managed to reward those early buyers with a growth of 16,990%. Fair enough, it took twenty seven years to get there but with an average of 630% per annum for those that held on, we feel it would have been worth the wait.

Most Clients will be aware that the market showed unprecedented losses after 2010 and it would be misleading for us to ignore the price correction in this study. In the chart below the current Liv-Ex market value for a case of 1982 Chateau Lafite Rothschild is £27,000, 40% down from it’s 2010 peak market value of £47,000 but still a massive 9,718% above its original release price of £275. This would represent an average annual growth of 294% over the 33 years that the wine has been on the market.

This is probably one of the best examples of a wine rewarding over the long term hold but it is not an isolated occurrence, there are countless examples of fine wines showing long term growth that is unparalleled in traditional financial markets or products.

If you haven’t considered wine for long term growth yet it would be worth contacting your Portfolio Manager to discuss your objectives, budget and time scales to see if we help you tap into this growth for yourself. Many Clients adopt long term strategies when arranging legacy options for children, grandchildren or other loved ones. We have access to a selection of wines that we would recommend for extended hold periods and can work with you to create a package that suits your needs.

by Spencer Leat

 

I know several excellent tasters who think this is the single greatest wine they have ever tasted, and it is difficult to disagree

Robert Parker Jr
The Wine Advocate

 

In a supply and demand environment a great deal of weight is often given to the ‘demand’ end of the bargain. But what if the wine in question is so rare that even a demand for one case is hard to satisfy?

Each wine that Cult & Boutique Wine Management recommend could be seen as rare when compared to mass produced supermarket wines but some are considerably more rare than others. Identifying these rarities and, more importantly acquiring them in workable quantities, is something that we take pride in doing for our clients.

In our opinion every client portfolio should aim to have at least one wine that fits this description, as these hard to find gems can often outperform everything around them. Here we run through a selection of our favourites that we have supplied to our client base over the years.

Chateau La Violette

This tiny Pomerol estate produces an average quantity of 250 cases per vintage and, if well received, has shown staggering rates of growth. The 2010 vintage was awarded a perfect 100 point score from Robert Parker and its value rose exponentially – and all of this in the middle of a bear market!

“This is a riveting wine and certainly one of the great classics to ever be produced by this tiny estate”
– Robert Parker Jr, The Wine Advocate

The 2010 Violette managed to grow by 380% between January 2013 and now. You have to agree, it’s hard to ignore performance like that.

Domaine Jean-Louis Chave Ermitage Cuvee Cathelin

Many of you will be familiar with Rhone Valley producer Jean-Louis Chave but you may not be aware of their top cuvee. The Cuvee Cathelin is only produced in outstanding vintages and to a quantity of just 200 cases.

Held in extremely high regard by the worlds most respected wine critics, it is virtually impossible to source by the case. If you are ever lucky enough to be offered this wine, grab it with both hands and don’t let go! Between 2014 and 2016 the 2003 Cuvee Cathelin has shown 130% growth, during the same period the Liv-Ex100 fell by 8%.

“I know several excellent tasters who think this is the single greatest wine they have ever tasted, and it is difficult to disagree”
– Robert Parker Jr, The Wine

Trilogie de Le Pin

Pomerol’s Le Pin has no second wine but if you’re lucky enough, try and get hold of Trilogie, a non vintage blend of three declassified Le Pin vintages with a dash of Cabernet Franc, unlike Le Pin which is 100% Merlot.

The name Trilogie is a reference to the blend of 3 vintages. Production quantities are not published for this wine but it is common knowledge that hardly any is produced at all, seeing as the total production from the Le Pin property is only around 400 cases a year.

Trilogie de Le Pin has shown 218% growth over the last three years based on average 75cl bottle price. The lower production 1.5L magnums are even more sought after, due to the wine to air ratio in the large format bottles they mature more gracefully.

Although these highly collectible wines have the ability to jump in value quickly, they really come into their own when held over the long term. The more time that passes the more collectible these wines become and over an extended hold term of 15 – 20 years the results can be very profitable. For example, the 1992 vintage of Napa Valley’s Screaming Eagle was originally released at £195 per three bottle case. If you were fortunate enough to purchase the same case of wine today you would need to part with over £15,400. Appreciated, 20 years is a long hold period but with more and more Clients looking to understand and explore the benefits of extended hold terms we would argue that over 7,800% growth is a just reward for your patience.

If you would like to discuss acquiring a wine of this rarity and the benefits of an extended hold period we will be happy to assist.

by Spencer Leat

 

There is a finite number of bottles in existence, and for the best returns a medium- to long-term view needs to be taken. As the wines mature and improve they also become rarer and more desirable – which drives prices ever higher.

The Daily Telegraph
January 2015

 

Investment grade fine wines are produced in small quantities and can rise in value over time. As more bottles are consumed the value of remaining examples increases, mainly due to supply and demand. There is a finite number of bottles produced in every vintage, and for the best returns a medium to long-term view should be taken. As fine wine matures and improves it also becomes rarer and more sought after – which in turn drives prices higher.

When building a diversified wine portfolio it’s important to consider how long you would like to store your wines before selling them back into the market. This period of time, often referred to as the ‘hold term’, is the ideal time span to wait before aiming for a return and can vary from one wine to another depending on age, value and demand in the market place, among other variables.

A healthy portfolio should contain a mixture wines expected to deliver over the medium, long and extended hold terms. In the fine wine market a medium term is around three years, long term is up to five and extended terms continue beyond the five year mark, sometimes a decade or more.

All wines supplied by Cult & Boutique Wine Management come with five years storage, insurance and portfolio management included in the purchase price, so the choice between medium and long term holds should be fairly straight forward. If you decide that you would prefer to store your wines past the initial five years its not a problem but there are costs involved. Extended storage is charged at London City Bond’s standard annual rate.

Some wines have the ability to deliver a return across all three options and as a result are often purchased in multiple quantities. This allows greater flexibility as the market progresses for example, if you buy one case of Chateau Lafite Rothschild and the market surges upwards you are faced with a dilemma – should you sell or hold out for a better price? If you were to purchase two or three of cases of the same wine you would have the freedom to sell one case at the current price and hold the other one or two back to see if the market continues on its upward trajectory.

If you are aiming to purchase specifically for an extended hold term we would tend to recommend solid ‘Blue Chip’ wines, such as First Growth Bordeaux and top flight Pomerol and Burgundy. These are wines that have a track record of being traded for decades and have managed to build a reputation in the fine wine marketplace as tried and tested brands.

If you study the growth profiles of this type of wine over extended hold periods the results can be staggering. The fine wine market has had a fairly bumpy ride in recent years but even taking the downturns of 2008 and 2011 into account these wines have still managed to show impressive capital growth.


We always ensure that we have a wide spread of wines available to our Clients from different vintages, territories and varietals. Some of these wines are better suited to long term capital growth than others, so if you would like to explore the benefits that an extended hold term can offer please contact your Portfolio Manager who will be happy to talk you through your options.

by Spencer Leat