Wine and time have a complicated relationship. Unlike other collectibles, wine goes to zero and as a "wasting asset" the need to actively manage and engage with a collection is imperative. Wine collections should be valued and reviewed every year just like any other asset. Here are six things we review for clients to set them up for a positive wine year to come.
1) Drinking Windows - Somewhat subjective but in actuality very quantifiable and important to the evolution and value of wine. The 2017 drinking window will open and the 2016 windows will close. The market will also look at the windows and assess a value accordingly. Knowing what wines to drink when over the next 5, 10 and 20 years can set a collection up to be fully enjoyed over time. Make a wine plan.
2) Diversity - Palates can change over time but the reality is palates vary by experience and education. The concept of a sophisticated palate should not be lost on a wine collection when reviewing its long term value. Wines from various regions, producers and varietals add to the offering and really shows the adaptability and range of experiences wine can offer.
3) Provenance - Where were the wines bought, where and how have they been stored? Is there original documentation to prove the source of purchase? Have the wines been stored with proper temperature, light and humidity? Not only will this affect the quality of the wine but its longevity and inherent value too.
4) Vintages - Well diversified collections across many vintages hold value over time much like a bond portfolio. As one vintage rolls on others evolve creating a unique value proposition. Top wines from top vintages and producers is traditionally the best strategy for holding value, but so called "off the run" vintages offer value and variability and may find increased demand as a result. Each vintage expresses the unique attributes of the weather which will affect how a wine will age. Each potential wine buyer has a level of knowledge or interest that varies from one to another and will influence their wine choices.
5) Rarity - Production size does matter. The Bordeaux Chateaux produce on average between 15,000 to 20,000 cases a year making them relatively accessible and liquid. Some Burgundy producers from one plot of land can produce as few as 300 to 5,000 cases. Wines not readily available from merchants, mailing list and allocated wines often have a brand value that is always in demand regardless of consistency. Supply and demand are the reality of the wine market and as time goes on the value of the wines has the potential to go up based on pure market force.
6) Format - Are wines in single bottles, six packs or 12 packs and do they have original wooden cases. Are the wines in unique hard to find formats like 5 L or 6 L or even larger. Larger formats tend to age longer, better and fewer of them are made. Larger formats are fun to share and offer an added bonus for the experiencing the wine.
Keeping up with a collection is not easy. Making it as hassle free and easy to engage with will only increase the value of your collection as well as it's enjoyment. Managing acquisitions and disposals throughout the year is easily accomplished with monthly updates. Following news on wines and vintage developments can be achieved when you know what you already own and where your wine interests lie. New year planning is the perfect opportunity to take stock, make a wine plan and get focused on the year ahead.