Wine Market Investment Report August 2019

by Wine Owners

Posted on 2019-09-09


August was much like July with summer holidays being the prime concern for most people. The wider market has felt quiet, maybe because the Bordeaux market is still largely flat, but there are definitely pockets of excitement about and the broad-based Wine Owners Index was up 0.9%. Trade was brisk with Piedmont, Tuscany and Champagne dominating turnover at Wine Owners.

The solid, relative value investment case for the wines of Piedmont has created demand which, in turn, has led to us step up our sourcing efforts. Liquidity is tight, obviously one of the plus points in the investment case, but we have managed to unearth some lovely parcels, particularly some legendary Bartolo Mascarello vintages.

Sterling has remained weak due to the Brexit shenanigans, and this has finally translated into some positive moves for various wine indices. As we know, a weaker pound generally leads to increased demand in the sterling denominated secondary fine wine market, especially from U.S.$ based buyers. Little has come out of Asia, however, as continuing rhetoric surrounding the U.S./China trade wars rumble on and Hong Kong is still suffering from the most vocal political protests in its modern history. They (the people of Honk Kong) have even appealed to Mr. Trump to help!

The largest region within the wine market will always be Bordeaux and it is business in the wines of Bordeaux that is suffering the most from these continuing issues. Many of the other top wine regions are less affected by these global events and market conditions as the wines are less traded, and the supply and demand ratio in a different place. Bordeaux has been looking cheap versus its peers for some time now, and there’s a lot of bad news in the price but the stars need to start aligning. This can and will happen, but when is the big question!


Focus on: Luciano Sandrone, Le Vigne - Barolo

by Wine Owners

Posted on 2019-07-09


The reputation of Luciano Sandrone continues to grow and grow, in keeping with the popularity of Barolo. Not as famous as the very top tier of Bruno Giacosa, Giacomo Conterno or Giuseppe Rinaldi but nestling just in behind, at a far more attractive price point.

Here we consider Le Vigne cru although the story is much the same for the slightly more expensive Cannubi Boschis (renamed Aleste in 2013 – in classic, designed to confuse, Piemonte style!).The consistency of the scores is incredible - through a mixture of very varied vintages from ’06-’15 the average is 95.3 points (Wine Advocate). Very significantly, the estate releases a small amount of the exact wines (under the labels Le Vigne Sibi et Paucis and Cannubi Boschis Sibi et Paucis) after ten years of age and they consistently achieve greater acclaim at that point, the ’07 going from 96 to 99 points (WA) for example. The range of points scored would indicate these are very fine wines indeed and given the rarity, must be only affordable to only the mega rich. Not so, prices start at c. £60 a bottle, rising to c. £170 for the stonking 2010 vintage.

For comparison sake I looked at some other fine wines from Burgundy and Bordeaux over the same ten year time period. Obviously these comparisons will never be exactly like for like but the differentials are not that great either; brilliant producers from the top tier of their respective regions, producing internationally acclaimed wines from the best local grape varieties designed to take advantage of their particular terroirs and climates to the full. We have a decent premier cru Burgundy, Domaine Dujac Aux Combottes, a sensational Pomerol on top of its game, Vieux Chateau Certan, and the king, Chateau Petrus (just for fun):


Comparisons between ‘06-‘15 vintages:

Av. points

Av. Price

Highest price


Luciano Sandrone Le Vigne Barolo DOCG

95.3

£98

£170

Domaine Dujac Gevrey Chambertin Aux Combottes Premier Cru

91.6

£170

£234

Vieux Chateau Certan

94.1

£134

£220

Petrus

96.1

£2,200

£3,250


I suggest there is room for significant upside for this Barolo. And I am going to start selling the Combottes I own, the differential is absurd and further illuminates how crazy Burgundy prices have become. Production of fine wine in Barolo (and Barbaresco) is tiny compared to even Burgundy and completely miniscule in what we could consider the ‘investable’ candidates.

Please see charts for Market Price and Relative Value Scores for available vintage comparison.

Le Vigne Sandrone RVS

Le Vigne Sandrone MPS

Miles Davis

9th July 2019


Focus on: Italia!

by Wine Owners

Posted on 2019-04-16


Italia! From the the country that has given us espresso and cappuccino, ciabatta and focaccia, minestrone and spaghetti, Maldini and Rossi, Pavarotti and Verdi, Canaletto and Leonardo da Vinci, Ferraris and Maseratis, Bunga Bunga, the Mafia and the Pope, we now have… un'opportunità di investimento – nel mondo del vino!!

Market price versus score

The Italians are not only the largest wine producing country in the world, they have been making wine for over four thousand years and cultivate over two thousand grape varieties on a multitude of different soils in twenty different regions! They are not bad at food either. Their climate seems to suit most of the finer things in life.

Italian wine being recommended is nothing new, but having it recommended as a collectable asset bearing an investment case is another matter. Ten years or so ago, a few canny collectors realised some of the ‘Super Tuscans’ (red wines typically made of a Bordeaux blend in Tuscany) such as Masseto, Ornellaia, Sassicaia (see recent blog post) and Solaia were ripe for decent returns. Traditionalists were a bit put out by these glossy new pretenders turning up on the Italian wine scene with their fancy French grape varieties and lots of marketing but it is fair to say they have helped the overall attention given to Italy and, as a result, the ‘Bs’ are blossoming – namely, Barolo, Barbaresco and, to a lesser extent, Brunello.

Wines from the best producers of Italy’s most venerable regions have been collected by the cognoscenti for years but now their appeal is becoming more widespread. The problems of Bordeaux, following an explosive China-driven period, have been well documented in the last decade and although we are quietly confident on a comeback from the sleeping giant, the smaller top-quality regions have been profiting. The indices for cult Californian (+98%) and beautiful Burgundy (+135%) have both gone berserk in the last five years, whilst Piedmont has gained a more modest 78%, with Tuscany posting +50%.

WO Piedmont 60 Indice

The reason for Burgundy and California’s performance is that old tried and tested wine world fundamental of demand outstripping supply - who knew!?? Both these regions produce tiny quantities in comparison to the number of people looking to access these markets and gain exposure. The complex nature of these regions with tiny vineyards, often co-owned by different families and winemakers, has added to the gloss and mystery, spurring on newcomers to learn more and invest time and money accordingly. More of the written word is more easily accessible to interested folk, and with platforms such as Wine Owners to trade on, the visibility of the product and the liquidity of the commodity has increased.

Grand Nebbiolo from Piedmont is yet to hit the big time, apart from a few, but there are more than rumblings in other names; dedicated collectors and the inquisitive are homing in. It is a Burgundian-like network of vineyards, producers, families and reputations and you need to know what you are doing. Famous names like Conterno, for example, have six listings in my favourite reference book: Aldo, Diego, Fantino, Franco, Giacomo (the big one) and Paolo.

Barolo MGA

Some of the bigger names like Giacomo Conterno famed for his Montfortino vineyard, Giuseppe Rinaldi, famed for Brunate and Tre Tine, Bartolo Mascarello and Gaja are already highly sought after superstars with prices to match but there are a host of others with reputations and demand beginning to swell; Brovia, Cappellano, Fratelli Alessandria, Sandrone, Voerzio and Vietti to name a few.

The ‘Super Tuscans’ of Bolgheri are much simpler to understand, like Bordeaux versus Burgundy, and are produced in larger numbers. The names mentioned earlier are virtually household names (in wine terms!) and are less exciting right now overall. Brunello di Montalcino, made from Sangiovese, is also comparatively easy to piece together in relation to Piedmont. Biondi Santi, Poggio di Sotto, Salvioni and Soldera are the big names with the fancy price tags. The secondary market for Brunello has not yet developed so, for now at least, it is a case of keeping a watchful eye.

There have been some excellent vintages in the last decade or so, attracting fantastic media coverage and battle-weary Bordeaux buyers. Another reason for favouring Italian wines in the current climate is that the U.S. and Germany are the biggest export markets, so unlikely to be affected by any potential fallout from Brexit. Most of all, however, these wines are barely scratching the Asian surface as yet and we all know what happens when that changes!

Italian flag


Focus on: Bartolo Mascarello, Barolo

by Wine Owners

Posted on 2019-03-14


2007 £1,300 per 6 WO Score 96

2010 £2,100 per 6 WO Score 100

Bartolo Mascarello Bottle

Bartolo Mascarello is one of the true legends of Barolo, think Rousseau or Roumier in Burgundy terms, in case you’re not familiar with the ‘Knights of Nebbiolo’. And if that’s still confusing, think Liverpool (Football Club), but I would say that, wouldn’t I? In fact, to be drawn against Juve tomorrow morning could easily inspire a trip to Piedmont, with a bit more than hazelnuts to look forward to! I digress…

Maria-Teresa Mascarello took over from Bartolo, her father, in 1993, the estate having been founded in 1918. Beautifully simple in its creation, the wine is a blend of four of the top crus, or vineyards and has been consistently and spectacularly successful for decades.

Market price versus score

In the charts above and below we have compared various well-regarded vintages of a similar era. These vintages are very good and very scarce, two of the most important factors for investors as they are squirreled away by the canniest collectors and prices have been rising. They are still a fraction of their Burgundian cousins however and we have no issue with recommending a buy, particularly the ’07 and the ’10, the cheapest relative value bets here:

Barolo Relative value score

Tasting notes, courtesy of Vinous Media:

2007: Mascarello’s 2007 Barolo shows just how compelling this vintage can be, even now. Sensual, layered and totally voluptuous in the glass, the 2007 shows the more flamboyant side of Barolo. I find the wine’s voluptuous, engaging personality impossible to resist. Sure, 2007 is not a classic vintage, but when a wine is this good, I say: Who cares?

2010: The 2010 Barolo is one of the most striking, hauntingly beautiful wines I have ever tasted here. Mysterious and slow to show its cards, the 2010 impresses for its inner perfume, sweetness and exceptional overall balance. Today the striking fruit and classic, austere elements of the vintage take turns in dominating the wine's balance. The 2010 was always magnificent in barrel. It is equally spectacular from bottle. Readers who can find the 2010 should not hesitate. Ideally I wouldn't dream of touching a bottle until age 15 or so, although I doubt I will personally have the discipline to follow my own advice!

The 2007 is the cheaper option from a classic vintage and the 2010 is the turbo charge version from the all-conquering 2010 vintage. Both are recommended.


Focus on: Sassicaia

by Wine Owners

Posted on 2019-02-11


Sassicaia 2006, 94 points £2,050 per 12

Sassicaia 2009, 96 points £1,590 per 12

Sassicaia 2010, 94 WO points £1,430 per 12

Sassicaia 2015, 97 points £1,750 per 12

Sassicaia 2016, 100 points (WA) £2,700 now, released yesterday at £1,270!

I am now editing this blog originally written on the 25th January as yesterday saw the release of Sassicaia ’16. Monica Larner of the Wine Advocate heaped the magical three digit score and a boat load of praise meaning it sold out in seconds (she does hold sway!). I would have enjoyed being a fly on the wall of Armit’s office yesterday as the phones must have been red (pun intended) hot! If, like she says it will, the ’16 turns out to be just as good and valuable as the ’85 vintage, 31 years from now, that would yield a most respectable 8% CAGR (compound average growth rate). One should take note, however, that the price of the ’85 more than doubled in the last three years so buyer’s beware! I repeat my recommendations from before.

Original post:

When we began researching Sassicaia for this post we began by thinking it would turn out be a good and solid egg. We were right. Other than the stratospheric and legendary 100 point ’85, now c.£30,000 per 12, up from £12,000 three long years ago, Sassicaia is a really steady holding. It’s a wine that gets drunk readily, is approachable at a younger age than most investment grade wines and doesn’t tend to get dumped in a downturn.

The 2015 is another exception to this generalisation, not least because last November it claimed the coveted Wine Spectator’s ‘Wine of the Year’ 2018, causing the price to do this:


Sassicaia WO index


It is interesting to note that the Wine Advocate’s upgrade from 91-93 to 97 points in February 2018 had no lasting impact on price – do they not influence this corner of the market, we wonder?



Sassicaia Wine Advocate index


In an efficient market, there’s a great short to mid-term switch play here, selling '15 and buying the cheaper and older ’09 or ’10 vintage where supply is shrinking faster. This is the wine market though, and trades like these not always play out. Judging from the price of the ’06, there is sufficient upside to these two vintages to suggest a purchase, especially if conservative is your thing!

The younger 2013 also looks cheap (but much more plentiful):


Sassicaia Relative value score


Buy: 2009, 2010, 2013

Trading sell: 2015


The January 2019 Market Report

by Wine Owners

Posted on 2019-02-07


The broad-based WO 150 Index was flat for the month, as were nearly all the indices. The only real note of interest was the Burgundy Index, dropping by 0.7%. As you can see from the graph below it has been the stellar performer amongst the great wine producing regions of the world. It’s far too early to start calling a general cooling off period but as I have been arguing here it feels right to top slice some of the better performing names and start looking for some laggards.

The numbers in the box below are performance numbers over a five-year period, so all very respectable but nothing comes close to Burgundy. The consistency and lack of volatility must surely be a thing of beauty to the investor and connoisseur alike?


WO 150 index


January is a busy month in the wine world when the latest Burgundy vintage is sold ‘en primeur’. 2017 was a decent vintage (See WO Blog) and has sold through pretty well given another year of testing prices.

The ‘Southwold group’ met in January to review the now in bottle Bordeaux 2015 vintage and there are two excellent reports on the three day session to be found on Vinolent.net and FarrVintners.com. In brief summary, ’15 is maybe not quite the excellent vintage that was first pronounced, certainly when judged by ‘English’ palates but still pretty damn good with some show stoppers therein. At the end of the Farr report there is an interesting table of recent vintages in order of perceived quality.

Here at Wine Owners we are betting more heavily on the ’16 vintage (not yet included in the Farr report) which we believe will move very close to the top of the leader board. Messrs Martin and Galloni of Vinous Media have recently reviewed the 16s in bottle and are waxing lyrical. Our very own meteorology and Bordeaux expert called the ’16 vintage some time back - pre the en primeur tastings even! All subsequent tastings and encounters of the vintage have confirmed our views and we are confident enough to shout BUY. What and when is a much more interesting question - so please get in touch to hear our thoughts.


Focus on: Pichon Lalande 2010

by Wine Owners

Posted on 2019-02-05


Pichon Lalande 2010

WO Score: 94

Price: £1,300 per 12

Probably our most popular and current investment theme, derived from the outperformance generated by Burgundy in the last few years, is scarcity. This recommendation has not been generated as a result of scarcity, it comes from the old-fashioned premise that good old-fashioned merchants used to be famed for – this is bloody good stuff, it’s under-priced and it’s going up - trust us!


Pichon-Lalande 2010 Market price versus score

Looking at the chart below the relative value doesn’t appear out of kilter relative to its peer group but that is using a WO generated averaged score (of current ratings) of 94 points. Based on various tastings since the Wine Advocate et al rated this wine, members of the team here have consistently and with conviction rated this wine above its peer group and above its current critic scores. To be fair Mr. Parker, back in February ’13, allowed himself some room for improvement with a 95+. The WO team would apply the plus sign very happily.


Pichon-Lalande Relative value score

For the sake of argument if we were to award the Pichon Lalande a score of 97 and run that number through the relative value equation, the score would be a far more enticing 30, almost as cheap as Leoville Barton – and Pichon Lalande is never as cheap as Leoville Barton!

On top of this, 2010 is becoming widely accepted as the greatest vintage of the modern era. The five first growths from 2010 currently average £7,500 per 12 and Pichon Lalande ‘82, possibly the greatest vintage the estate has produced until this one, is £7,800 per 12, so there seems plenty of room for upside!


Market price versus score


Focus on: Sassicaia

by Wine Owners

Posted on 2019-01-25


Sassicaia 2006, 94 points £2,050 per 12

Sassicaia 2009, 96 points £1,590 per 12

Sassicaia 2010, 94 WO points £1,430 per 12

Sassicaia 2015, 97 points £1,750 per 12

When we began researching Sassicaia for this post we began by thinking it would turn out be a good and solid egg. We were right. Other than the stratospheric and legendary 100 point ’85, now c.£30,000 per 12, up from £12,000 three long years ago, Sassicaia is a really steady holding. It’s a wine that gets drunk readily, is approachable at a younger age than most investment grade wines and doesn’t tend to get dumped in a downturn.

The 2015 is another exception to this generalisation, not least because last November it claimed the coveted Wine Spectator’s ‘Wine of the Year’ 2018, causing the price to do this:




It is interesting to note that the Wine Advocate’s upgrade from 91-93 to 97 points in February 2018 had no lasting impact on price – do they not influence this corner of the market, we wonder?





In an efficient market, there’s a great short to mid-term switch play here, selling '15 and buying the cheaper and older ’09 or ’10 vintage where supply is shrinking faster. This is the wine market though, and trades like these not always play out. Judging from the price of the ’06, there is sufficient upside to these two vintages to suggest a purchase, especially if conservative is your thing!

The younger 2013 also looks cheap (but much more plentiful):




Buy: 2009, 2010, 2013

Trading sell: 2015


Bordeaux 2016 or 2015?

by Wine Owners

Posted on 2017-05-11


The tasting event in Westminster for the trade in early May provided an opportunity to re-taste a number of 2016 Bordeaux comparatively with their 2015 and 2014 equivalents. 

The conclusions reinforce to a large extent the general impressions we formed in Bordeaux at the start of April, but the comparison also showed it’s not one size fits all.

Canon

Starting with the one wine tasted from the right bank, Canon 2016 is showing more aromatics than 2015, very silky, integrated tannins and is thicker-styled, with riper fruit. Canon 2015 showed greater intensity, with a stunningly pure mid-palate of ripe, sticky fruit, and a prolonged finish.  Canon 2014 is more classically styled, with a cedar nose and liqueur-like mouth feel, this is lovely now and looks like much earlier drinking.  

No doubt there are glorious wines from the Libournais in 2016, but both St Emillion and Pomerol do not conform to a vintage stereotype in these two vintages, and you will have preferences for individual wines from one or other year.

Smith Haut Lafitte

Jumping down to Pessac-Léognan, Smith Haut Lafitte (SML) 2016 is firm and properly dry, with crystalline fruit. Very intense and just on the right side of focus, with a very grippy, licorice finish. SML 2015 has a very energetic attack, sweet, refined tannins, a warm, fruity mid-palate and an aromatically spiced finish. SML 2014 was delicious but not in the same league as the other two vintages.

2015 was a stellar vintage in Pessac and Graves across the board. The same is not true of 2016 but SML showed (along with Haut Bailly, Chevalier and Carmes Haut Brion) that the best 16s are superlative and brilliantly architected for the long-term.

Rauzan Ségla

Rauzan Ségla 2016 is refined, with a liqueur-like mouth feel, and a hint of prunes. It’s less pure than Rauzan-Ségla 2015, with its fine nose, superbly energetic attack, refined mid palate and liquorice infused, fruit-driven finish. Rauzan-Ségla 2014 is dry, mid-weight, unforced and classic, with appealing grip, and a great, insistent finish. 

Margaux was a star appellation of 2015, and this wine confirms how relatively disappointing the commune'’s wines are in 2016. They remain fine claret from a good vintage, but they miss out on the excitement of the ‘15s.

Pontet Canet

Our Pauillac representative of the comparative tasting stood out for its increasingly aromatic character, a factor that Justine Tesseron attributes to the growing influence that biodynamic farming is having on the fruit. 

Pontet Canet 2015 was one of the most refined and silky examples of the appellation, yet today it just didn't cut it in the company of the glorious 2014 and deeply serious 2016.  Pontet Canet 2016 displayed a fine nose, wonderfully textured fruit, a really firm mid-palate with bitter-edged fruit before sweetening into the long finish.  Serious, long-haul stuff – and I suspect might become a legend 50 years hence. Pontet Canet 2014 is extremely aromatic, sweetly imbued with angelica flavouring, and with proper, grainy tannins on the finish.

Montrose

Montrose 2015 is delicious and aromatic: a fine showing for the vintage, yet seemed to lack a bit of structure. St Estephe in particular produced some of the best wines in a generation in 2016, and Montrose shows up that difference as does almost every wine from the appellation. Montrose 2016 is equally as expressive as 2015, but feels like a wine for the longer term, with more serious structure and vital freshness. What impresses here is the focus and elegance, which make this one of the stars of the vintage.


Picture: Wine Owners Ltd.


Black Rock, Northern Rock, now Noble Rock!

by Wine Owners

Posted on 2015-03-05


You’ve got to laugh. A friend of mine contacted a company called Noble Rock, ostensibly on behalf of his father who had a fine wine collection. My friend’s name is Peter Bevan.

Having requested a valuation from Noble Rock, and offering to sell his wine through them, they called him back offering to sell carbon credits. As interesting a segue as I have ever come across...

Once the conversation was brought back to the question of his father’s wine, he was told that his wine collection had gone up in value substantially. This surprised Peter since he hasn’t yet provided details of the wines to them.

So how could they possibly know what his wines were worth? The Man from the Rock patiently explained to Peter that they knew because every time a wine was bought en primeur the details of the buyer and their wines were entered onto a Register – which they had looked up and that was why they knew about his wines!

Valuations that were subsequently discussed were sky-high, predicated on the well-practised advance fee fraud of paying a sum of money up-front to get the wine to Hong Kong, where it would be sold at auction at a massive premium to market. In this case the advance fee was justified on the basis of it being a VAT payment of 10%. Peter queried, if it was VAT, why it was only 10% of the value and not 20%; the answer being that only half of the VAT due was payable straight away. A novel concept that would interest HMRC I’m sure.

It was all so entertaining and extraordinary. But there is a serious side since people are being taken for a royal ride. Otherwise these people wouldn’t exist would they? The message is clear, do not take calls from people you don’t know selling by phone. And if anyone suggests there’s a way to sell wine at a market premium (check the market level price on www.wineowners.com), they are conning you. It simply doesn’t work that way.

Oh, and what happened to my friend Peter? Well, his name wasn’t really Peter; his real name is Mark. Mark Bevan, of Nexus Wine Collections. He runs one of the UK’s most successful specialist fine wine storage businesses, and had contacted Noble Rock because a number of his clients had been approached by phone spinning their yarns of criminal intent.


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