In this series we follow five examples from multiple regions and winemakers using historic financial data from liv-ex the largest online exchange for fine wines to demonstrate the financial gains achieved within a five year period.

This wine from the famous Napa Valley in California has been a great diversification for those looking to see what the new world has to offer. In January 2014 a case would have set you back just £1,620 but don’t be fooled by the comparatively low entry price. One year into a five year hold its value had risen by 18% to £1,910 and by year three it had grown by 85% to a value of £3,000. Performance over the following two years slowed but today’s value of £3,170 represents a growth of 95.7% over five years, or 19.1% CAGR. With this type of performance you could consider acquiring multiple cases to increase your returns and gain more flexibility when you sell.

In this series we follow five examples from multiple regions and winemakers using historic financial data from liv-ex the largest online exchange for fine wines to demonstrate the financial gains achieved within a five year period.

One of the famous Bordeaux ‘First Growths’, this wine is a well known powerhouse within the fine wine market. We’ll take you through the last five year’s price performance but bear in mind this wine was released onto the market at £2,200 in 2001. Fast forward to January 2014 and its value had risen by 372% to £10,400.

Assuming you had purchased a case in January 2014, the first years hold term would have delivered a healthy 18%, reaching a market value of £12,200. Two years later this figure had risen to £14,826, a growth of 43% against the January 2014 purchase price. Today, at the end of a five year hold period, the ‘Mouton 2000’ has a market value of £19,339 and would have delivered a growth of 86%, or a CAGR of 17.2% per annum.

In this series we follow five examples from multiple regions and winemakers using historic financial data from liv-ex the largest online exchange for fine wines to demonstrate the financial gains achieved within a five year period.

Hailing from Burgundy, twelve bottle cases of 2009 La Tache could be picked up in January 2014 for around £23,000. Market prices fluctuated over the following two years before values really started to rise. By January 2017 its market value had risen by 6% to just under £24,500. From here onwards performance has been stellar – just one year later in January 2018 its value had reached over £36,000 and this January you would need over £41,000 to acquire a case. This represents a growth 76.3% over the last five years, or a Compound Annual Growth Rate (CAGR) of 15.3%.

In this series we follow five examples from multiple regions and winemakers using historic financial data from liv-ex the largest online exchange for fine wines to demonstrate the financial gains achieved within a five year period.

The fine wine market works on a supply and demand basis, every vintage is limited in production with the emphasis on quality not volume. Rarity is also influential on price performance with many of the market’s most prestigious wines proving very hard to acquire, even upon release where waiting lists are common.

Most wines have a slow start but as stock availability decreases and the wine mature we tend to see a good increase in market value. To demonstrate this we have given five examples below using historical market data taken from Liv-ex – the largest online exchange for fine wines and the most reliable source for market data.

We believe that a healthy fine wine portfolio should feature wines from various regions, producers, regions and price points – in order to protect against under-performance in any one particular area and this has been reflected in the examples below. Purchase prices range from £495 to over £25,000 allowing access for both sophisticated and modest investors.

 

I finally called at the port stand and was poured a glass of Dow’s 20 year old Tawny by the chairman of Fells, Paul Symington.

 

I always look forward to my visit in early January to the Fells Burgundy tasting, as it is a welcome sign that Christmas is out of the way and the excitement of the New Year beckons (please don’t groan).

This year there was a change of venue for the tasting to the RAF Club in Piccadilly, and as the Service celebrated its centenary in 2018 so the Club was looking in very good nick.

This was my first visit to the Club , as it would have been for a number of exhibitors, and although some aspects of it are very modern – a new stained-glass window commemorating the role of women in the RAF had been unveiled by HM The Queen in October 2018 – others were very ‘time-warp’. I had a strange urge to quicken my pace down a long corridor whilst humming the theme of ‘ The Dam Busters’. I also wondered, surrounded by so many portraits of Air Vice-Marshals and the like, whether I ought to have grown a handle-bar moustache for the occasion. However, once inside a very long room and having been greeted warmly by the lovely Isabelle, I was very much back in primeur 2017 tasting territory.

I take my hat off to our suppliers Fells and Sons, as with Bouchard Pere and William Fevre they handle two of the oldest-established and most reliable domaines in North and South Burgundy. I began at the beginning, with No.1 on the Bouchard list which was a simple Pinot Noir “La Vignee”. But of course I use the word ‘simple’ very loosely, as there was much to entertain in a few gulps of this. I wrote in my notes that I could smell this all day : beautifully rich classic pinot on the nose and lots going on on the palate for around the £15 mark.

I then decided to move north to a Chablis from William Fevre, the Grand Cru Vaudesir, which remains one of my favourites, though in a higher price-band. I notice that immediately below this on the list is the Grand Cru Valmur, also oak-aged which I tasted some time later, and underneath that is the Grand Cru Les Preuses against which I had simply written ‘Blow your socks off!’ .This might have been after a swallowed glass or two of something quite fruity at lunchtime. All these are around £70 mark.

This tasting was not just confined to the Bouchard and Fevre houses. Always able to surprise us, Fells have acquired the Champagne Henriot portfolio showing on the day, which includes the Beaux Freres vineyard in Willamette Valley, Oregon. Beaux Freres specialise in Pinot Noir, so it was logical to combine the tasting. It is quite powerful stuff : the Zena Crown Vineyard Pinot Noir has an ABV of 14.8% . This is something of a contrast to the average 12% in the Old World. Those of you wanting a bit of inside knowledge should note if you don’t know already that beaux-freres is French for ‘brothers – in –law’. The founding owner and president of Beaux-Freres , Michael Etzel, purchased the vineyard with his brother–in –law, one Robert Parker Jr., So now you know.

I was well advised to try a glass of Henriot Brut Millesime 2002 before I left, which is highly recommended and was the perfect end to another enjoyable day on the road.

Just over a month later it was again my palate’s pleasure to be entertained by Fells and Co, this time with their full Portfolio Tasting at the Institute of Engineering and Technology (IET) on the Embankment. This time the wines came from all over the world, so your palate and your stamina needed to be honed for the occasion. Every wine producing continent in the world was there – so the M.O. is just to dive in!

I first found myself next to the Spain and Portugal section and tasted a very appealing 2015 Priorat ‘Perpetual’ from Familia Torres. 70% Carinena and 30% Garnacha yield a good mix of spice and fruit, and an ABV of 14.5%, so quite a good place to start. I also tasted a 2009 Penedes from Jean Leon : ‘Vinya La Scala Gran Reserva’, which was 100% Cabernet Sauvignon and very dignified.

Next I hopped over to South Africa to taste Vergelegen’s GVB 2012 Red, which is a lovely mix of mostly Cabernet Sauvignon and Merlot with a little Petit Verdot and Cabernet Franc thrown in to add more interest. This is special occasion wine and highly recommended.

Italy drew me in next, and I tasted a 2016 entry level Barbera d’Alba DOC Battaglione from Renato Ratti which you could find around the £20 retail price point. 100% Barbera, lovely rich fruit matured in oak – great with a veal escalope! I’ve always preferred Barbera d’Alba to its sister Asti, as Asti seems to be everywhere.

I then tried a 2014 Barolo DOCG Marcenasco,100% Nebbiolo matured in oak – and I can now say I’m beginning to ‘get’ Italian wine, why Barolo is so revered etc. This is a very fine wine and the grapes are distinguishable. I’ve always had difficulty with Italian grape varieties as the wine-growing areas are so concentrated, one runs into another and individual character to my mind becomes something of a blur. Not any more I am pleased to say! In any case, Burgundy and especially the Cote d’Or is comprised of tiny ‘parcelles’, all on top of each other but each with a different characteristic, and you’d never hear me say I had difficulty with them.

Now we come to my Big Discovery of the afternoon, and the wonder is that it’s white! An entry-level 100% Riesling high up in the Eden Valley in Australia : Pewsey Vale Vineyard Riesling 2017. For added interest you could also look out for Pewsey Vale ‘The Contours’ Riesling 2012, aged in bottle for 5 years before release. These two could be found for around the £15 – £25 mark respectively.

Those readers who know my slight bias towards ‘la belle France’ will have noticed that it hasn’t featured greatly so far. That is because the Fells Portfolio tasting tends to concentrate on the New World, and also that the Burgundies have largely been covered by tastings elsewhere (see above).

However I did pay a visit to Alsace, to taste again a wine I’ve just bought a bottle of – Hugel’s 2016 ‘Gentil’. It is their only blended wine, a mix of 41% Sylvaner & Pinot Blanc, 19% Pinot Gris%, 18% Gewurztraminer, 17% Riesling and 5% Muscat. A real ‘pot pourri’ (well perhaps not trop pourri) of Alsatian sunshine.

I finally called at the port stand and was poured a glass of Dow’s 20 year old Tawny by the chairman of Fells, Paul Symington. A fine end to a fine afternoon. I’m looking forward to next February already.

By Jonathan Whittley

 

Our consignment was described in Zachys catalogue as ‘A diverse selection of the most coveted wines in the world’

 

December saw our Managing Director, Enzo Giannotta travel to New York to oversee our first auction in association with Zachys. Founded in 1991, the family owned business quickly became one of the most renowned prestige wine auctioneers in the world. Billed as The Holiday Auction, the Zachys December Sale saw a plethora of the world’s finest and most sought-after wines go under the hammer.

Our consignment was described in Zachys catalogue as “A diverse selection of the most coveted wines in the world” and drew attention from a number of private collectors and consumers, many of whom were in attendance on the day, with more bidding remotely both by telephone and online.

Highlights of the sale included a six litre imperial of the 1974 Heitz Cellar’s Martha’s Vineyard Cabernet Sauvignon, one of only three made which fetched a staggering $96,330*, way above its pre-sale estimate of $40,000 to $80,000.

Other wines to find their price were a six bottle case of Le Pin 2005 which sold for $23,465* and a three bottle case of Domaine de la Romanee-Conti Romanee Saint Vivant 2005 which fetched $8,028*.

A number of lots came very close to their high estimates – various cases of Taittinger Comtes de Champagne 2004 sold for $1,976* per twelve, against a pre-sale high of $2,000 and the 2006 vintage wasn’t far behind, selling for an impressive $1,729* per twelve against a pre-sale high estimate of $1,800.

Italian wines also fared well on the day with two, twelve bottle cases of Sassicaia 2009 selling for $2,347* against pre-sale highs of $2,400 but this was pipped by a 12 bottle lot of Solaia 2009 which fetched $2,717*, exceeding its pre-sale high price of $2,400 by 13%.

Overall the sale was a success and we’re looking forward to further auctions in the New Year. If you would like to consider prestige auctions as an exit strategy for your portfolio, please speak with your Portfolio Manager who will be able to advise on and upcoming sales and the suitability of wines from your portfolio.

*Prices obtained from Zachys post-sale report and include sellers premium

By Spencer Leat

The fine wine market is enjoying its first bull run in a number of years, prompting a flurry of purchasing activity among seasoned investors and wine novices alike.

For many, a good glass of wine is one of life’s greatest pleasures, but for shrewd collectors, it is also one of life’s greatest investments. Fine wine is one of the best-performing assets of the last twenty years, outperforming gold, property, equities and classic cars. This resilience has shown wine to be a reliable long-term investment, providing collectors with an enjoyable way to combine pleasure and profit.

For those with a taste for investing in wine, there is no time like the present. The political shocks of the past year and subsequent market volatility have reminded us of the importance of alternative asset class investments. Now enjoying its first bull run in a number of years, the fine wine market is seeing strong demand for vintage wines from a variety of different producers. Bordeaux may still reign supreme, but bottles from California’s Napa Valley and France’s Rhône Valley are now catching the eye of some more adventurous collectors, suggesting an interesting future for the market. The Liv-ex Rest of the World 50 index has seen an impressive 45 percent growth over the past five years.

New kids on the block
The wine market has long been dominated by the famous vineyards of Bordeaux, where over 8,500 producers work diligently to create some of the world’s best-loved and most prestigious wines. And yet, while bottles from Bordeaux and Burgundy are the pride of wine cellars across the globe, collectors today need to think about broadening their collections. Often overlooked by wine critics and investors, wines from New World regions as diverse as Australia, USA and even China are now enjoying some much-deserved appreciation.

In 2014, five cases Napa Valley’s sought-after Scarecrow 2012 sold for $4,300 a bottle at auction

Indeed, some wines from outside of the Old World have seen impressive growth in their value over the past five years, even outperforming Bordeaux’s in-demand wines. The wine market is also continuing to grow in Asia, where an emerging Chinese middle and upper class is fuelling spending.

Perhaps the most exciting New World region is California’s Napa Valley, which has garnered international attention for its magnificent Cabernet Sauvignon. Nestled between the Vaca and Mayacamas Mountains, Napa Valley’s Mediterranean climate allows its 43,000 acres of vineyards to prosper. In 2014, five cases Napa Valley’s sought-after Scarecrow 2012 sold for $4,300 a bottle at auction, highlighting the investment potential that the region’s produce now provides.

Back in the Old World meanwhile, the industry is also witnessing an upsurge in interest in wines from outside of Bordeaux and Burgundy. Of course, Bordeaux’s internationally acclaimed wines still represent the largest share of trade, but other French regions have begun to truly come into their own of late. Champagne’s timeless sparkling wine has begun to pique the interest of seasoned collectors, while the Rhône Valley’s diverse offerings are also proving popular with investors.

A tempting tipple
There are many different factors behind the growth of the fine wine market, but none are more influential than the advent of the internet and the rise of wine critics. In the past, newcomers to wine collecting relied heavily on the advice given to them by wine merchants and were largely unable to form their own decisions on where best to invest their money. With the dawn of the online era, however, even novice collectors can access a wealth of wine-related information with just a few clicks, making it ever easier to analyse prices and markets before investing so much as a penny.

What’s more, high-profile wine critics have made the market more approachable for wine lovers, drawing them towards wines of note. Robert Parker’s 100-point rating system has become the key quality indicator in the fine wine market and has made it much easier for collectors to identify which wines are worth investing in. However, Parker is now retiring from reviewing Bordeaux wines and is focusing instead of Napa Valley where he is based. With the world’s most powerful critic shifting his focus from Old World to New World wines, we may well see a further broadening of the fine wine market in the years to come.

The best way to approach the market is to build a good relationship with an established merchant. A good merchant will be able to guide you through the market, aide with wine selection, manage your holding professionally and most importantly, offer a variety of exit strategies when the time comes to sell.

For further information call 0208 948 9430.

By Enzo Giannotta

This article was originally published in London Business Matters, the offical publication of the London Chamber of Commerce and Industry

 

We were guided through the estate’s 2016 offerings by Justine Tesseron. This is their first fully biodynamic vintage and I must say the results are impressive

 

On the first Thursday in April Daniel Paterson and I found ourselves on a train from Bordeaux making a pilgrimage to Pauillac. It was not the easiest of pilgrimages – a train journey that ought to have taken an hour at the most ended up taking twice that, as a result of a technical problem to do with level-crossings en route. When we eventually arrived in Pauillac we couldn’t find a taxi anywhere, but since the vineyard was more or less within walking distance Daniel and I set off on foot.

It was a very warm afternoon but fortunately, before we both began to see mirages of Omar Sharif appearing on the horizon astride a camel, we spotted a tractor belonging to the vineyard, its driver tending the vines, and were able to persuade him to give us a lift to the chateau for the tasting.


Daniel and I arrive at Chateau Pontet-Canet

It was well worth the trip – gleaming vats, svelte hostesses in black suits with red sashes, and some interesting wine to taste. What really struck me though was the monastic atmosphere. It was so quiet – we were after all in the middle of miles of meadow – and such a contrast to the hustle and bustle of city life, and indeed city tastings.

We were guided through the estate’s 2016 offerings by Justine Tesseron. This is their first fully biodynamic vintage and I must say the results are impressive. The Grand Vin was very opulent and was the stand-out wine of the two we tasted. Once this wine has fleshed out i’m sure it will be fit for many years of cellaring.


Barrels of wine ageing

The Tesseron family, owners of the Pontet-Canet estate, recently acquired the Napa Valley vineyard formerly owned by the actor Robin Williams and the wine is called Pym-Rae. This was the second wine on offer, of a very different style to Pauillac, but equally interesting. With the domestic wine market in the USA going from strength to strength, this is a project we will be watching very closely.

The return journey was rather easier as it was at the end of the day, and the wine-maker from Pym-Rae kindly gave us a lift back to the station in a Range Rover which the owner of Pontet-Canet had placed at his disposal.


Vats inside the Chateau

Earlier in the day – it had been a long one which began with my meeting Daniel at Bordeaux airport around 8am – we visited the brand new ‘Cite du Vin’ wine museum, which you will now find on every to-do list for Bordeaux in existence. It is an impressive building, based on an idea of swirling a wine glass, but Daniel and I found the exhibition all a bit bewildering and disjointed, largely due to the fact that it is very interactive (buzz-word) and involves donning a headset and moving into areas where random commentaries on various aspects of the wine industry assault your eardrums. I may return when i have more time to absorb the information.

I had decided to stay in the Bordeaux area for a week so the following Monday I made the short journey St Emilion. I was pleased to find that it was not over-run with tourists early in the season, and I particularly wanted to have lunch at ‘La Terrasse Rouge’, a restaurant belonging to Chateau La Dominique, which is on top of a new fermenting room clad with vivid red metal, which looks stunning against the green of the vineyard. The atmosphere in the restaurant was as you might expect not quite as hallowed as that at Pontet-Canet, with an army of staff running round what might have been a city-centre brasserie, were it not for the spectacular views of the vineyard it offers on all sides. I ate from the ‘menu du jour’ and as is often the case with these destination places, the food although good did not quite live up to the surroundings. I recall the item I enjoyed most was a rum-baba, something often found in ‘old-style’ French brasseries though sadly not often on this side of the Channel, and with Brexit looming hardly likely to experience a revival. I also enjoyed a glass of Chateau La Dominique ’13, but moreso a glass of Chateau Fayat ’11.

by Jonathan Whittley

 

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