By Lisa Dewberry
Investment in South African wine is a relatively new phenomenon with South African wines making huge strides in quality over the last decade. As global demand and consumption of fine wines increases, there is an opportunity to build a collection offering a long-term financial return.
Roland Peens, Director of fine wine merchants and cellarers Wine Cellar, says South Africa's top wines are finally receiving international acclaim with world-wide demand exceeding supply. He says the top five investment wines for 2014 include Klein Constantia Vin de Constance; Sadie Family Columella; Boekenhoutskloof Syrah; Meerlust Rubicon and Kanonkop Pinotage. Annually, these wines have all increased in price above inflation, thereby offering impressive returns.
Klein Constantia Vin de Constance
Vin de Constance, a natural sweet wine, has a history tracing back to the 19th century when Napoleon declared it was his favourite wine. After a gap in production of two centuries, this wine was produced again from 1986. In 2007 it received 97 points from Robert Parker’s Wine Advocate and the price rocketed. The current vintage 2009 sells at around R695, the 2007 at R1 050, the 1997 for R1 950 and the 1986 for R15 000. In a few years Vin de Constance should be impossible to find at below R1 000 per bottle.
Sadie Family Columella
Columella, a shiraz-based blend, is arguably South Africa’s finest red wine. It is produced by Eben Sadie, one of South Africa’s most famous winemakers who was largely responsible for the upsurge in quality of South African wines in the 2000s. The latest vintage 2012 sold out from the farm in less than a week at R642 per bottle. Other stockists sold the last few cases at R850 per bottle and the 2010 at R950. Prior vintages of this wine are only attainable on auction, reaching a few thousand rand per bottle.
Boekenhoutskloof Syrah’s small production and huge status makes it one of South Africa’s most sought after wines by winemaker Marc Kent. The chairs on the wine label pay tribute to the skills of the 18th century craftsmen and their achievements in creating beauty from natural sources like the pursuit of fine wine-making. The first vintage, the 1997, emerged onto the scene as one of South Africa’s top wines. The 1997 Boekenhoutskloof Syrah sold for about R3 500 per bottle while the current vintage 2012 sold at R390 and the 2003 at R950 a bottle.
Meerlust Rubicon, a blend of Cabernet Sauvignon, Merlot and Cabernet Franc, is one of South Africa’s top red wines with a history of being the finest red wine in the 1980s and early 1990s. Today there are many wines that match its quality, but at R300 per bottle for the latest 2010 vintage, it offers good value. This Bordeaux blend has a massive following and ages well, making it a good investment. The Meerlust Rubicon 1994 sells at around R800 a bottle and those from the early 1980s (especially the 1982 and 1984) sell for up to R2 500 a bottle.
Kanonkop Pinotage is produced by one of South Africa’s most famous and respected wine estates, consistently providing excellent wine for 40 years. Along with the Kanonkop Paul Sauer, the Pinotage has excellent ageing potential and the top vintages from the 1980s and 1990s are spectacular. Kanonkop Pinotage emanates from one of South Africa’s oldest vineyards and requires 10 years to come to full maturity. The current vintage sells at R280 a bottle and is a benchmark of this variety, with the 2001 sold for R550 and the 1989, a top vintage, for around R950.
Investing in wine is only relevant if the wines are considered Investment Grade (IG). There are only a tiny number of wines classified as IG, with South Africa having one potential IG wine, namely the Kanonkop Black Label Pinotage. Bales says IG wines are produced in finite quantities and, like any other commodity, the market is driven by laws of supply and demand.
"For a wine to be considered IG, it should be an instantly recognisable label and brand, have a long track record of high quality and prices, highly rated by international wine critics, a record of consistent upward price movement and ability to improve over a long period of time. When investing, it's a good idea to buy three cases of En Primeur or Pre-Release wines and after a period of maturation under ideal conditions, you can sell one to finance the purchase of another two cases."
Wade Bales, owner of Wade Bales Wine Society
A valuable wine collection has sufficient numbers of bottles of age-worthy wines stored in conditions conducive to their lengthy maturation. He says it is important to choose wines likely to mature well from good areas, vintages and producers and to study the track record of the wine region, read about the region, producers and varieties doing well in that area.
"Few buyers will be willing to pay a premium for a wine if its storage conditions over an extended period are questionable so it's important to take care of your wine collection by having the correct storage conditions."
Guy Webber, winemaker at Stellenzicht Vineyards
Many investors choose a theme for their collection such as 10 years of the same wine or 10 wines from the same region to interest a buyer and make the collection valuable. He says other ways the value of the collection is boosted is by investing as much as possible in scarce wines awarded locally and internationally that have great ageing potential.
"Mix in top-end wines from well-known estates of larger bottle formats such as 3, 5, 9, 12 litre bottles and other 'oddities' and your collection will increase in value. Good investments have always been red wines with provenance, from well-known estates, and usually classic Bordeaux blends or Cabernet Sauvignon."
Ross Sleet, sales director at Cape Legends
Ensuring a safe place in which your wine investment can gradually mature is essential. You can achieve this by: