A little over three years ago I took the leap of hanging out a shingle. After years of working in asset management and over ten years of studying wine, I wanted to marry two of the things I enjoy wine and markets. As I started working with more private collectors it became clear that they wanted a better way to engage with their collections. They love wine, they love acquiring it but actively managing the collection could be a challenge. After manually compiling all the data I felt we needed to provide the best insight for the collections, it became clear building a software that would give us the data our clients really needed to actively manage their wines, quickly and concisely would solve the problem.
Cellar Tracker is great, it is the industry standard. The database is massive and it has all the bells and whistles one needs to organize an inventory. Its limitations are in its lack of simplicity. It is time consuming to upload and map and there are so many options for analysis one can lose themselves in the data, they switch off and loathe having to go back and update the cellar. My clients want to know what to drink when in a snapshot. Where to buy it, what it costs and to get the best access and prices the global market provides. Yes they know they have resources in Cellar Tracker and Wine Searcher but consolidated information makes it easy to decide what to drink, what to buy and what to sell. Clients have invested the time and money to build beautiful collections, the last thing they want is for the wine not to be enjoyed before the end of its natural life cycle or for someone else to enjoy it if they can't.
We have made a conscious decision to build our data on a mark to market basis tied directly to the Liv-ex Exchange in London. Why? Markets are dynamic and so are prices. While Wine Market Journal data is relevant, it already happened in the last auction. Wine Searcher data is also relevant but is a retail price and the goal of any wine lover should be to pay the best price for the highest quality product, that is what free markets are for.
We have clients with collections from 1,000 bottles to 19,000. One of my first approaches when I am taking on a collection is to do the wine maths. 3,000 bottles is essentially 8 years of drinking or sharing a bottle of wine each day. We assume, even if they don't disclose it that the burn rate is around 450 bottles a year for an active collector. When we approach a collection we look at the age of the client, the number of bottles and overlay the drinking windows to essentially build a road map for drinking and enjoying the collection. What that then allows the client to have is all of the assets actively managed but also valued and organized, just like a bond portfolio or an annuity. Wine is the one collectible that truly does go to zero. There is also not a lot of liquidity so selling wine into the market can move the price and the auction market is a tightly controlled and informed market.
The auction houses charge over 20% to buy wine and a smaller percentage to sell depending on the size of the collection. We would like to think that building a community of peers as well as those that look after their assets will begin a more constructive conversation around the acquisition and trading of wine. Who better to buy wine from directly than another collector that took the same care you would for your wine. Is the middle man the best way for wine collectors to connect?
We want to work with trust and estate planners to help them to manage all their client's assets in advance of a transfer of wealth. Why be held to the prices offered on a forced sale of a collection? Perhaps heirs don't realize that holding onto a bottle may be a better choice than selling it into the market. Some wines age over 50 years and most age worthy wines hit their stride and sweet value spot at 20 to 25 years depending on the vintage. These are asset planning discussions and we want to take an active role in making sure wine and their part in the estate is looked after.
Many collectors do keep wine in their home cellars but there is professional storage as well. Most facilities use Cellar Tracker for inventory management and we would like to enhance the experience by working with facilities to provide a more efficient way to engage with their collections. Retailers, brokers and auction houses will also benefit from Vinolytics mapping out palates and regional choices and being able to provide access and expertise.
Vinolytics is good for wine and those that love it. No wine to zero.
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