Wine investments impact your bottom line.
Ah, the mysteries of making sound wine investments. From the terroir to the barrel, the bottle to the palate, the path to expanding your wine investment knowledge is fraught with mind-bending twists turns. The sheer numbers of brands of wine can make the process of investing whether a novice or a well-seasoned vet, intimidating. Thankfully there are brilliant people out there ready to help. Noah May, Wine Specialist from Christie’s New York took time out to share his knowledge on wine investments, strategies to employ, and best practices of this niche.
“The funny thing is, wine is turning out to be a great investment. I couldn’t believe what happened with the value of my wine futures. I pinched myself and asked, ‘Did I just make more money on wine barrel futures than I did on the stock market?” Suze Orman
Kelly Mitchell: For a first time or casual collector of wine, what are some of the most important aspects to consider when beginning a collection?
Noah May: Buy what you like, whether that is the ethereal charm of a Burgundian Pinot Noir, the cavernous depth of a Classed Growth Cabernet or the floral aromas of a Sauvignon Blanc. Fondness for certain foods may relate to your tastes for different wines. Use this to your advantage by seeking out and only buying what you will enjoy drinking. Do this the same way you shop for ingredients for favored recipes. If you like Sushi then perhaps you should explore the Crus of Chablis. If steak is often sizzling on your stove, then an Argentinean Malbec is more your bag. Wines usually have a suitable dancing partner — Sauternes with blue cheese, Champagne and oysters, Syrah and game and so on.
The latitude and longitude of wine is breadth and depth, enabling an enthusiast to draw parallels between the same grape varieties grown at opposite ends of the earth, or explore the effect of Mother Nature on different vintages of the same wine. Finding a much-loved wine is a great thing and can lead you to new discoveries. If a bottle of 2009 Bordeaux blew you away, then you may wish to explore Napa Valley wines such as Shafer’s Hillside Select or Harlan Estate. These are usually Cabernet/Merlot dominant, or McLaren Vale’s powerful Cabernets in Australia.
You may also seek out horizontals and verticals to discover the depth of a particular wine. Avid fans of Bordeaux may collect various wines from Châteaux in the same year as a horizontal to determine the variation between one patch of vines and the next. Or you may wish to assemble a run of vintages of a particular wine for a superb vertical tasting. It’s important, even at the very beginning of a collection to keep specific records of where the wines were purchased, the price acquired and where they were stored. Going forward, make sure to note which bottles you consume.
“The old adage is that once a certain age is reached, there are no great wines, only great bottles — there is indisputable truth here.” Noah May
Mitchell: What would you consider core choices of vintages, & types of wine to establishing a well-rounded collection?
May: Strong vintages make all the difference. Stellar vintages in Bordeaux for example — 1982, 1986, 1989, 1990, 2000, 2005, 2009 and 2010— will have prices to match the high quality. Seek out lesser young vintages such as 2012 and 2008, which are not so expensive but still have bags of concentration and complexity. If your birth year happens to be a solid vintage, count your blessings and start stockpiling curious bottles to celebrate with in years to come.
The wine trade has its particular season which is useful to know. In late January, merchants will offer Burgundy En-Primeur (wine sold in the barrel from the most recent vintage for bottling and delivery in two years’ time). In March/April Bordeaux will host its own En Primeur and collectors can visit Châteaux or expect merchant’s offerings in their inbox. In May, Italy holds tastings of Barolo and most London merchants will follow suit with offers of younger Barbaresco and Bartoli. In November, most dealers focus on the Rhône Valley and Christmas offerings of hearty reds and Ports. At Christie’s, we host the Hospices de Beaune Barrel Sale on the third Sunday in November when the streets of Beaune are filled with wine lovers.
Mitchell: What types of wine are best suited for long-term holding (15 yrs+)?
May: In youth, fine wines are robust, vital, yet somewhat one dimensional in their appeal. The adage is that once a certain age is reached, there are no great wines, only great bottles — there is an indisputable truth here.
It is nothing short of tragic when corks are pulled on older bottles, and it quickly becomes clear that a once glorious bottle is now oxidized, lifeless — the victim of circumstance, of neglect. Perhaps the relative frailty of these older bottles helps add to the joys of finding a great one. When fully mature wines show well, they can be transcendently wonderful. Youthful wines may show a vitality that a bottle approaching its half-century would struggle to muster up, but there is nuance, charm and a singular sense of character in a bottle of Latour 1959 that a 2000 or 1982 could only dream of.
“Our strength is older vintages of wines that you don’t tend to find at retail, expertly curated cellars of old curiosities and private collections of perfectly stored wines with impeccable provenance. ”
Mitchell: Suze Orman reflected on how much better her wine investments were doing versus the stock market. Where does one go to get a good wine advisor on investing in wine? Does Christie’s offer this service?
May: Today, finding a voice that you trust in the melee of opinion available is not easy. It will pay dividends as recommendations will be made that concur with your vinous preferences. New experiences, new wines and a wealth of knowledge can best be gained by packing your bags and jetting off to your nearest vineyard. Serious wine collectors can be found pacing the terraces of Quinta do Noval, cycling around the vineyards of Champagne and trekking up the flinty slopes of a Grand Cru in the Mosel Valley.
Most wineries offer tours for a small fee and many merchants and auction houses will host tastings with a range of great wines to get your teeth into.
At Christie’s, we sell around 16,000 lots per year in our wine auctions around the world. These are usually by case but we also offer interesting and rare old bottles. Our strength is older vintages of wines that you don’t tend to find at retail, expertly curated cellars of old curiosities and private collections of perfectly stored wines with impeccable provenance.
” When approaching a wine investment, buyers/investors really need to study the scores and assessments of notable critics and make decisions on what to buy based on these early indications of a wine’s perceived quality.”
Mitchell: Do you recommend self-storage or using a facility that offers wine storage professionally, for longer term wine investments?
May: Putting the wine to bed in a cellar is the best way to guarantee it a longer life. Lying it horizontally in a rack means the liquid is in touch with the cork, which prevents it from drying out. A perfect cellar should be cool, between 11° and 14°, with 12° striking the happiest medium. Temperature swings will affect the taste of the wine — too hot and the wine will age quickly with cooked flavors. If the cellar is too cold the cork will suffer from low humidity and begin to dry out, causing seepage and oxidative flavors.
Bottles like nothing better than sitting in the dark. Sunlight will dissipate the molecules in the wine and leave it insipid and colorless. Light bulbs may fade labels but as the glass is dark most low-level light will not cause harm to the wine. Perhaps the best tip for new collectors is to simply leave the bottles in their original cases.
Mitchell: What wines would not be a good consideration for collecting?
May: If you’re buying wine to enjoy, then there really shouldn’t be any wines that aren’t good to collect! All wines have a lifespan; it’s just that some are longer-lived than others. A Provençal rosé, may be best after a year or two only, but that doesn’t mean you shouldn’t include a case in your collection for enjoying next summer. If you are looking to collect for either investment, long-term laying down, maturation, or for future generations to enjoy, stick to wines that have the requisite structure to stand the tests of time.
Wine requires tannin and acidity (preferably both) to last for long periods, so for long-term collecting, avoid lighter styles of wine with a more delicate structure, as they’re likely to begin their inevitable journey toward vinegar, sooner.
“In recent years, as demand for the finest wines from new markets has grown, the en primeur prices for many of Bordeaux’s top estates have increased significantly.”
Mitchell: Do savvy wine collectors store wines for personal & investment use?
May: Wine collectors often have split portfolios of their wine investments, some to be bought and enjoyed, and others with more investment potential to be laid down as a solid investment. Investing in wine has become a little trickier in recent years as the release prices of wine futures have gone up so much. It was long the case, the sale of your Lafite in years to come would pay for you to drink your 2nd and 3rd growths “for free.”
That said, the classic route of Bordeaux wine futures is not the only one to take for investment. If for example, you look at our Christie’s Wine Online/NYC All American Sale , there are pristine 3-packs of Screaming Eagle from recent exceptional vintages which would be perfect to lay down either as an investment or for something to enjoy in years to come. There are also lots of mature vintages of Dunn, Château Montelena, and Dominus which represent excellent wines for current drinking.
Mitchell: When someone is interested in building a collection for investment purposes how does that strategy differ?
May: Typically, if someone was buying wine for personal enjoyment, they’ll follow their heart and palate, as opposed to common sense or investment advice. Certain wines in every region will never yield great financial returns. These more modest or perhaps under-appreciated wines, may still be compelling and offer rewarding drinking experiences to an individual.
When approaching wine buying as an investment, buyers/investors need to study the scores and assessments of notable critics and make decisions on what to buy based on these early indications of a wine’s perceived quality. These wines may not be the most interesting to a wine enthusiast, but as long as there is a critical mass of commentators who have committed to high scores, the investor can be relatively confident of making a return, providing the release price isn’t too high!
Mitchell: Is there such a thing as “wine futures?”
May: Yes – “wine futures” or buying wine en primeur before the final product is in the bottle has been the traditional method of buying certain wines, particularly Bordeaux for many generations. Consumers would commit to the purchase of wine before the product was bottled, and indeed completely formed. In return, they could expect the purchase price to be significantly lower than the price the wine would eventually retail for when bottled and on the market. In recent years, as demand for the finest wines from new markets has grown, the en primeur prices for many of Bordeaux’s top estates have increased significantly.
Mitchell: Can you get insurance on wine investments to protect against loss, in case a very expensive wine goes bad?
May: Yes – absolutely, you can insure a wine collection against damage relating to storage issues. Most standard home insurance policies will only insure for risk of loss or theft or in some cases for broken bottles. For more sophisticated issues such as exposure to heat or humidity fluctuations, collectors should consider a policy through an insurance company who have brokers that deal specifically in wine.
Do you have more questions about wine investing? Send them to firstname.lastname@example.org.