In case you haven’t noticed, champagne prices have dropped about 10% across the board. The only ones that have held are Krug and other collectibles. More vintages as well coming online. Champagne collection is seeing an uptrend among HNWIs recently.
For everyday drinking, I’m also looking forward to more Spätburgunder / Pinot Noir from Germany. Keep safe and healthy all!
I just got back from Victoria, Australia and the sad truth is that if global temperatures rise by 3 deg Celsius, there will no wine industry in Australia to speak of. Until such time, let us all be responsible with our Earth warming habits and read what the Australian are doing in the face of climate change.
My portfolio of wines has grown in value but that says little about volatility and the ensuing heartaches and headaches as my clients see their beloved portfolios gyrate. However wine, when matched against a quite volatile 2018 equity market (esp. in the 2H), is a bedrock of stability and consistent returns. And what about against gold?
The liquid is not tied to economic cycles other than euro movements. Prices are tied to supply primarily, as the years go by bottles are drunk. Demand spikes when the wine matures. Of course, these benefits come with a long lock-in period and illiquidity.
I came across this article from Decanter recently : https://www.decanter.com/premium/best-pinot-noir-wines-outside-burgundy-296918/
And how fortunate we are in Singapore with such a dizzying array of wines. The list seems to suggest that Aussie and Kiwi pinot noirs are most likely to please. Marlborough would be my top choice.
Pinot noirs are the ultimate food friendly red. Maybe bested at times only by Beaujolais. New world pinots would like be more red fruit and red pepper than oak and earth. Pair with ‘lighter’ red meats such as pork, duck and veal dishes.
http://www.bbc.com/news/business-43560477
I came across this article and what caught my eye was the image of (smug?) Xi Jinping holding a glass of choice red:
The picture speaks a thousand words to the content and just highlights how much the gravity of world trade is shifting to the Asia-Pacific … to the Chinese consumer. Hong Kong, by virtue of geography, remains the gateway to this growth and it would be impossible for Singapore to carve out any niche in this area unfortunately. Some battles we just can’t win.
Industry ferment: US wine industry crushed over tariffs
http://www.bbc.com/news/business-40496904
Tech entrepreneur TJ Rodgers made billions of dollars founding silicon chip maker Cypress Semiconductors, now he has turned his sights to wine-making, and is on a quest to make the best Pinot Noir in the New World.
A collapse in the roof of a gigantic tunnel being driven into a hillside sounds like a pretty dramatic event.
But the entrepreneur TJ Rodgers is calm as he recalls what happened.
“It’s not like you see in the movies with rocks flying, and stuff like that.
“It will kill you but it’s kind of a slow motion thing, and you can walk [away] and stay in front of it,” he explains.
He is speaking inside one of three giant caves that house his winery high in the Santa Cruz mountains in California.
The construction of the facility was a monumental task, taking years and requiring advice from experts in digging tunnels under the Austrian Alps.
Occasional cave-ins were just one of many challenges.
The location was so remote that it was impossible for concrete to be driven in without it setting first. Instead, they had to drive in a concrete-making plant which they assembled on site.
And the reason for all this intense effort? “Our mission statement is to make the best Pinot Noir [wine] in the New World,” says Mr Rodgers.
He is certainly not someone to do anything by halves. He founded the huge silicon chip maker Cypress Semiconductors in 1982, and subsequently built it into an enterprise worth billions of dollars.
The silicon chips that Cypress makes are found in millions of mobile phones and many other devices. Chips are also found on the bottles produced at the winery, which is called Clos de la Tech.
TJ Rodgers, who recently stood down from Cypress, first became interested in wine in his youth. Pinot Noir proved to be his favourite, in particular that made in Burgundy.
He wanted to know more, so he travelled to France, visiting vineyard after vineyard in Burgundy.
Despite the bemused responses from some vineyard owners, Mr Rodgers says he learnt a lot from his time in Franc
Back in California, his interest blossomed into a passion. He set about trying to make wine himself, and he enlisted the help of his wife, Valeta Massey, who now spends much of her time on wine-making.
Mr Rodgers first experimented with a vineyard at his home. Later, after the purchase of the site in the Santa Cruz mountains, the venture became more ambitious.
The plan was to aim for the highest possible quality. The best way to do that, Mr Rodgers decided, was to copy the wine-making process used in Burgundy in the 1830s.
This meant using techniques such as foot-crushing the grapes, and being as gentle as possible with the wine at every stage.
Pumps are avoided. Instead, the facility is a “gravity winery”, explains Mr Rodgers. The three enormous caves are arranged one above the other, so after fermentation in the topmost cave the wine flows through pipes downhill into barrels in the second cave for the next stages of the process.
Despite the emphasis on traditional methods, technology also plays a role. For example, many real-time measurements are taken during fermentation, and special devices are used to measure moisture levels in the field, helping to ensure the crops get exactly the right amount of water.
But Mr Rodgers is quick to add that modern techniques are only used where appropriate: “the technology is not to supplant the old process, the old guys were pretty smart.”
TJ Rodgers is far from the only wealthy individual to try his hand at pushing the boundaries of wine-making in California. But are ventures like his little more than the wine-making equivalent of vanity publishing?
Not necessarily, says Aaron Pott, a wine-maker and consultant who has worked at the top end of the industry in France and California. With the right vineyard, and skilled staff, he says, it is perfectly possible to make excellent wine.
Mr Pott adds it would also be a mistake to assume that only ancient vines can produce good output. “Great wine can be made from young vineyards,” he says.
But while it may be feasible to make high quality wine, making money in the process is more difficult, according to both Mr Rodgers and Mr Pott.
For one thing, there is the high cost of setting up facilities like those built by Mr Rodgers and other wealthy people in California. Quite apart from the cost of the land and buildings, the equipment can be expensive.
Take, for instance, the French oak barrels used at Clos de la Tech – these cost $1,000 (£774; 876 euros) each.
Then there is the question of yield. The downside of aiming for high quality, says Mr Rodgers, is that output will be small.
“Our yield up here is one tonne per acre. If you go to a commercial farm in Napa you see five tonnes per acre, and if you go to Modesto you see 12 tonnes per acre. Ok so right there, the war’s over with regard to economics. Your wine’s going to be expensive,” he explains.
Nevertheless, although economics may present a challenge, benefits can flow from what Mr Rodgers and others like him are doing, says Mr Pott.
Whilst in some ways it may make it harder for smaller concerns like his own to compete, Mr Pott believes that the emergence of wealthy wine-makers in California has helped “to raise the bar” of quality – and that ultimately is a good thing for the industry.
TJ Rodgers and Valeta Massey say they have enjoyed their venture immensely, and that they have learnt a lot about wine in the process.
Perhaps the biggest lesson for them has been the prime importance of the starting point – the grape.
“The French have a phrase – ‘the wine is made in the field’.
“The wine has a certain potential defined by the grapes in the field and… the best you can do is take 100 per cent grapes and make 100 per cent wine. And all wine making is downhill from there,” he says.
So on 22 Mar 2017, being one of the few rare free days that I have, I attend the Business Times’ Leaders’ Forum on Disruption and Transformation. Simply because I badly needed to do some non-wine networking and I was interested to find out what ideas could be generated for a small-timer like me.
So the theme of the day really was about digital disruption and transformation. The implication is continuous life-long learning and skilling. For me the biggest take-away was to always think about value-add, leveraging on technology and never be afraid to be humble and learn.
How about this thought for wine collectors – all your wine bottles tagged with RFID chips that contain detailed information about each bottle. One wave of the RFID wand and stock-taking is done. The results are sent to a cloud and synchronised with a customised mobile app, no more manual input. The app futher syncs with CellarTracker / Wine Market Journal and wine values are also updated.
I recently bought two Bordeaux First Growths – a Mouton and a Margaux – vintages that correspond with the birth years of my kiddos. I hope to pop out the sacred liquids on their 21st birthdays (And why not their 18th, some asked. Well, I thought I’d spend about 3 years educating them about wine first).
So shelling out the big bucks is one thing but ensuring you’re getting what you paid for is another. You certainly don’t want to be unknowingly saddled with insidious ‘two-buck-chuck’. How the wine eventually tastes is beside the point.
So I came across this interesting site on Maureen Downey, one of the world’s foremost experts in counterfeit wine. She runs her own consultancy as well, Chai Consulting, whose business model inspired me to do the same with Vitis Concierge BTW. I digress.
Now, I don’t expect many people to be buying cases of 20 year old Petrus and Granges every week. Nor do I expect the common man to be able to implement the fake wine detection techniques described here. So short of peeling off labels and examining corks or sending it off to an expert charging more an hour than what your wine costs, what are some of the common sense methods to adopt before splurging?
1) Buy from a reputable retailer, preferably one that has a brick and mortar store in the city you’re in. And do check you have recourse via consumer protection laws and agencies.
2) Do try to buy more recent vintages. 1940s and 1950s are definitely going to be at high risk of counterfeiting. I’m really taking about 2009 and later where bottles come with QR codes, hologramme stickers and tamper-proof seals.
3) If the price is too good to be true … its too good to be true.
4) Of course, if you’re still feeling uncomfortable, engage a local wine consultant, like Vitis Concierge, to follow up on some basic research. It’s not going to be full-proof but with connectivity and information available nowadays, a second opinion certainly helps.
