Wisdom in wine

Posted in Business + Economy, Environment, Science + Health by expresscheckout on 28 July, 2008

1952 Château Latour

Got a nose for a good investment?
Sandra Kanthal, Producer
‘Alvin Hall’s World of Money’
BBC Radio 4

Recently, each day in the markets brings new and somewhat depressing headlines.

So those looking for a safe place to put their money might want to sit down and have a drink. Fine wine is becoming a hot market in which to invest. It is a sexy commodity with lots of panache and very enthusiastic collectors. But, as with all ways to try to turn a sure-fire profit, acquiring the knowledge required to dabble in the world of wine is harder than it looks.

Expert advice

Scott Zenko runs a New York company called the Auction Consultants. His clients want to create their own great collections but do not necessarily have the time or the expertise to do it themselves. Scott is a charming, easy-going man who clearly enjoys his job. “One of my favourite clients has got a nice little home in Palm Beach, a castle in England, a rather stately home outside of Chicago, he’s got a world class English furniture collection but he knows nothing about wine…So, he’ll say ‘Scotty can you go get me about two thirds white and one third red and here’s a six figure allotment to go do that.'”

Though Scott would love to have that assignment every year it usually works out to be about once every two years or so. However, Scott is noticing that in the world of the wealthy, very expensive alcohol is taking on greater significance. “Wine is the new must have thing of the ultra-rich…Nothing says ‘I’m rich’ like pulling a $10,000 (£5,000) cork out of a bottle and in cultures like Asia and Russia that sort of behaviour is really a part of new wealth.”

Unexpected interest

In America, buying wine through auctions is becoming increasingly popular. Jeff Zacharia runs Zachys. It used to run its auctions in conjunction with the more well-known Christies, however Zachys now does it on its own. He is the third generation in his family to work in the wine trade. In his shop in the New York suburb of Scarsdale, Jeff Zacharia explained exactly how big these auctions can be. “I never imagined that the wine auction business would be this strong…When we first started-off we had a business plan and within a few months we had to rip it up… we were just so exceeding our numbers – because of the huge interest there is in wine.

“Before the first auction we were hoping we could make $500,000 or $1m at an auction. Now we’ve auctions making $5m, $6m, $7m and we’re doing about 10 or 12 auctions a year.” In fact, Zacharia went on to tally up last year’s revenue at about $50m. By his own admission an “unbelievable number”.

An avid collector

Douglas Barzelay collects Burgundy with a real passion, so much so that has bought extra space in his apartment block to build his own temperature-controlled wine cellar. When he first discovered the pleasures of fine red wine, the market was in a slump. “It was in the mid 1970s which was the last time the wine market actually crashed and I think for a lot of people who are very interested in the subject of investing in wine, they have never seen that phenomenon. There’s been a long, long bull market, if you will, in wine since that time, that’s only accelerated in recent years.”

But, Doug did highlight one of the main flaws in trying to make a profit from this very pleasurable beverage. “With art you can collect it and enjoy it at the same time…Unless you are into the pleasures of simply looking at bottles the only way to enjoy a wine collection is to open the bottles and consume what’s inside, so you have just destroyed the value, if you will, of that particular piece of your collection.”

Past value

But it was not always the case that the astronomical value placed on wine was in the bottle. It used to be the bottle explained Simon Berry, chairman of Berry Brothers & Rudd in St James’ Park, a very exclusive part of London. “Wine really was very, very cheap to start with. The expensive thing when you bought wine was not the liquid, it was the bottle. And up to 1840 or 1850 no matter how expensive the wine was, the bottle was always worth more.”

Berry Brothers & Rudd has been a leading member of the British wine trade for three centuries and Simon knows his stuff. He has recently been appointed clerk to the Queen’s cellars. In his years in the trade he has seen the value of what were small, little known producers go to astronomical levels. “Domaine de la Romanée-Conti, one of the best red burgundies, if you can find a case for 2005 now, apparently it will cost you £70,000 for that case.”

But, he also believes that buying wine should be open to everyone not just speculators that want to corner the market on certain vintages just to control the price. “We believe wine is there to be drunk. We will try and make sure that the market is a bit more fair than simply one person having complete control and using it as a commodity really, as opposed to various bottles of slightly intoxicating fermented grape juice, which is really what we are talking about in the end.”

BBC Radio 4’s Alvin Hall’s World of Money was broadcast on Saturday, 26 July 2008 at 1204 BST, and was repeated in a longer version on Monday, 28 July 2008 at 1504.

Harvesting Chasselas grapes

Wine: English sparkling wine
Jonathan Ray
May 23, 2008
The Telegraph

English wine has shed its joke status and its sparklers now rival the best in the world, writes Jonathan Ray

English Wine Week starts today: the annual series of events, tours, tastings and special offers that celebrates our native wines. No, don’t laugh, hear me out. Our domestic wine industry is in great shape and there is, in fact, much to cheer about. Our sparkling wines, in particular, are better than ever, with the likes of Nyetimber, Denbies, Camel Valley, Chapel Down and Ridgeview enjoying medal-winning success in competitions around the world, appealing to often hitherto-cynical critics and consumers alike.

There are currently almost 370 vineyards in England and Wales with more than 3,000 acres under vine, an increase in the vineyard area of 61 per cent compared with 2003. (And yes, although it’s a sore point for some, wine produced in Wales is officially known as “English wine”. The term “British wine” is reserved for that vile muck – usually so-called “sherry” – made in the UK from imported grape concentrate.) Twenty new vineyards were planted last year, and several more are planned for this year and next, mostly in Kent and Sussex but also in Hampshire, where Waitrose is planting five hectares on the John Lewis Partnership-owned Leckford Estate, and even St Mary’s in the Scilly Isles.

“Waitrose has long championed English wine,” says Justin Howard-Sneyd, the supermarket’s wine-buying manager. “We’ve had two great vintages in succession in this country, resulting in fine prize-winning wines and very favourable coverage in the press. Our customers are increasingly positive about buying English wine and Waitrose now stocks more than 30 different examples across our various stores. Indeed, our sales of English wine grew 92 per cent between 2006 and 2007.”

But making and selling their own wine is a bigger deal than just selling wine made by others. Isn’t it a risk? “We already produce and sell our own fruit and vegetables, eggs and chickens from the Leckford Estate and we’re confident that now is the time to produce and sell our own wine,” says Howard-Sneyd. “It’ll be a sparkling wine, which is undoubtedly where the future of our industry lies. I genuinely believe that England’s top sparkling wine producers are making wine that is more than the equal of £25 champagne.”

Over in Marden, deep in the Weald of Kent, Nick Hall is thinking along similar lines. The hop gardens and orchards of his youth have virtually disappeared and the oast houses he remembers are now second homes for Londoners. His brother, Peter, is one of the few remaining hop-growers in the area. His hops are used to flavour Duchy Original Organic Ale. “The idea of establishing a vineyard was driven by the desire to see crops growing in fields that had fallen into disuse,” says Hall. “I saw an empty south-facing slope where my great grandfather had once farmed and, being something of a wine buff, suddenly realised that it would be perfect for the production of quality sparkling wine.”

Hall promptly enrolled on a winemaking course at Plumpton College in East Sussex and, in between classes, managed to plant 13,000 vines of chardonnay, pinot noir and pinot meunier: the classic sparkling wine varieties. He has named his enterprise Herbert Hall after his grandfather and farms organically, hoping to emulate the success of the best English sparklers. “My aim is to make an artisan sparkling wine of great complexity and balance that truly expresses the soil and microclimate of my vineyard,” he says. “And in 10 years, I firmly believe that the south of England will be recognised as one of the world’s great regions for sparkling wine.”

Bullish talk but it strikes a chord with Stephen Clark. After 22 years selling Laurent Perrier champagne, Clark has jumped ship to take up the post of sales and marketing director at Nyetimber, generally regarded as England’s finest wine. “I had heard of Nyetimber when I was at Laurent Perrier, but had dismissed it as something of a hobby wine,” he says. “When I finally got round to tasting it last year I felt as if I had been hit by a thunderbolt. I had no idea it was so bloody good. In an instant I realised that this country can produce sparkling wine to equal the very best in the world and, as you can imagine, I wouldn’t have swapped Laurent Perrier for Nyetimber if I didn’t really believe that.”

Clark and owner Eric Heerema have big plans for Nyetimber. A new winery is in development and the company aims to increase production from 70,000 bottles a year to more than 600,000 by 2011. “We’re going to take it from boutique to brand,” says Clark. “We’re good enough and I can’t see anything standing in our way.” And who’s to say that he’s wrong? “Look at Australian wine and how far they’ve come,” says Justin Howard-Sneyd. “We laughed hysterically at Kanga Rouge and Wallaby White in the Seventies, but who’s laughing now?”

See also: The Winedoctor