23 Oct How to Start a Cellar: Buying Strategies
On the path to wine collecting, four distinct approaches help map the journey to your ideal cellar
The lure of wine collecting can be intoxicating. Visions of gleaming wood, pristine glass and rough-hewn stone often come to mind—but before the bells and whistles come the accumulation of bottles and the organization of the collection itself. Here we explore the world of wine collecting through four different approaches designed to help you define your goals and ensure your cellar will fulfill your needs over time.
The two primary factors to consider are your lifestyle and that niggling detail: cost. Take a moment to consider how, realistically, you would best enjoy your wines. There’s no point in stocking up on $100-plus bottles if you don’t foresee many opportunities to serve them, no matter their prestige. Valuable wines often waste away in cellars as collectors wait for exalted occasions that never seem to arrive. A firm understanding of your wine-consumption habits and preferences will save you money and time, and ultimately reward you with a collection that is perfectly tailored to you.
Of course, the cost of collecting can be an equally firm guideline. For most collectors, it’s atypical, not to mention prohibitively expensive, to open a fine or rare bottle every time they reach for a corkscrew. A practical solution is to break down your shopping list into three categories: “good,” “better” and “best.” The price range for each will vary depending on wine types and regions, as well as your budget. In one example, “good” wines might cost around $25, “better” might be between $25 and $60, and “best,” over $60.
In some cases, after the initial investment, there is potential for longer-term economic benefit, as fine wine tends to appreciate in value as it matures. A dramatic example is Château Lafite Rothschild 1982, which rose from $390 a case when it was first offered as a future in 1983 to a high winning bid of $35,000 in 2016; a more typical example is Château Léoville Poyferré 1990, which has risen from $31 a bottle upon release to $286 at auction today.
After the considerations of lifestyle and expense are out of the way, let your creativity and personal passions bloom. There’s no one method of creating and organizing a collection, but without a plan, the process can be overwhelming. Each of the approaches described here can serve as a roadmap to your dream cellar:
- The Balanced Cellar involves a mixture of vintages, prices and drink windows;
- the Instant-Gratification Cellar focuses exclusively on fine wines that are ready to drink right away;
- the Tasting Cellar is constructed as a learning tool;
- and the Investment Cellar focuses on profit potential.
THE BALANCED CELLAR
A balanced cellar will contain wines to suit any occasion. This should include whites and reds, young and mature wines, and everyday and prestige bottlings. These wines can mostly be sourced from good retailers or obtained directly from wineries.
An investment of $10,000 for a 16-case collection (192 bottles) might be allocated like this:
4 cases | good and better wines | $1,500
A mix of lighter (Sauvignon Blanc, Pinot Grigio, Albariño) and bigger (Chardonnay, white Rhône) wines. Buy current vintages, understanding that some (white Burgundy, German Riesling) may improve with age.
Young everyday reds
5 cases | good and better wines | $2,500
Buy wines that are generally made to be consumed young (Spanish Garnacha, Côtes du Rhône, Beaujolais), while including some that may improve with age (Chianti Classico, Portuguese reds, Oregon Pinot Noir).
3 cases | better and best wines | $2,000
Many reds are best consumed six to 10 years after the vintage date. Older vintages of Bordeaux, Barolo and Rioja are generally available at retail.
4 cases | best wines | $4,000
Select young but ageable wines that have meaning for you based on personal taste and experiences. These might include grand cru red Burgundy, Brunello di Montalcino Riserva, cult Cabernet Sauvignon or luxury Champagne.
It’s quite possible to have a cellar full of wine yet little to drink, either because the contents consist of newly acquired wines that require prolonged bottle aging or because the selection is skewed toward blue-chip labels that are not suitable for everyday dining.
No wine collector, no matter how experienced, wants to be in this situation. Especially for novices hoping to build a serious collection with investment opportunities down the road, the Balanced Cellar is the best way to get your feet wet.
Most collectors look to create a range of different price points and shelf lives in their collection, spanning wine regions, styles and vintages. The goal here is to assemble the building blocks of a lasting collection, so an even mix of wines that are ready to drink and wines with extended shelf lives is key. This flexibility is a great opportunity to explore diverse wines.
A good rule of thumb is to aim to begin your collection with around 16 cases (nearly 200 bottles). If the idea of purchasing that much wine right out of the starting gate is daunting, downsize instead to six mixed cases (72 bottles). Plan to consume your starter kit over a six- to 12-month period, depending on its size and your habits, and make your next buying decisions based on your findings. Once you’re comfortable, the only limit is your budget.
THE INSTANT-GRATIFICATION CELLAR
A cellar assembled for instant gratification includes wines that are at their peak of drinkability. Here are some wine types known for their ability to improve with age, as well as excellent vintages that are now at or near their peak.
Try a few older vintages of wines you generally enjoy young. Wines that can gain with five to 10 years of bottle age include Shiraz and Sémillon from Australia, Pinot Noir from Oregon, and Malbec from Argentina. Châteauneuf-du-Pape often does well with 10 to 20 years’ age.
Some retailers offer mature wines, and they’re occasionally available direct from wineries, but the primary source is auctions. Expect to spend $100 or more per bottle.
Burgundy: 2007, 2004, 2002
German Riesling: 2005, 2001, 1990
Burgundy, especially Côte de Nuits: 2002, 1996, 1993, 1990
Rioja: 2005, 2004, 2001, 1995
Bordeaux, especially Left Bank: 2000, 1995, 1990, 1989, 1988, 1985, 1982
California Cabernet Sauvignon: 2009, 2008, 2007, 2006, 2004
Brunello di Montalcino: 2004, 2001, 1999, 1997
Hermitage and Côte-Rôtie: 2003, 1999, 1995, 1991, 1990
Vintage Port: 1994, 1985, 1977, 1970, 1966, 1963
Sauternes: 2001, 1997, 1990, 1989, 1983
Gone are the days when aging wine in the family stone cave was the only way to enjoy older bottles. The name of this collecting approach says it all; wine lovers who have the means will enjoy creating the Instant-Gratification Cellar, a collection that typically hovers close to that 16-case quantity target. This is a tightly knit selection of often—but not always—mature wines meant for short-term consumption.
Some collectors opt for the instant-gratification route because their storage space is limited. Others do so because they’ve made a conscious decision to skip the wines’ aging process in favor of classic vintages that are already mature. If this is the case, make sure you enjoy the taste of mature wine!
This approach doesn’t necessitate buying only mature wines, however. Blue-chip and California cult selections that are ready to drink upon or close to release have a place in this collection just as much as older wines do. As with any style of cellar, knowing your personal preference is key.
A single 200-bottle temperature- and humidity-controlled storage unit for this variety of wine collection will run about $2,500.
Thanks to the proliferation of commercial wine auctions and fine-wine websites, it’s possible to buy mature wines on an as-needed basis, projecting no more than a few months into the future. As an added benefit, sometimes the current prices of aged bottles are lower than initial release prices.
When purchasing wines for this type of cellar, it’s important to diversify. Some auction houses do the guesswork for you by assembling mixed lots in quantities as small as four bottles. You can further customize your cache by working with fine-wine merchants.
THE TASTING CELLAR
A Tasting Cellar will comprise wines that can be used for comparative tastings. Select some wines that may deepen your knowledge of what you love, and others that you believe will expand your horizons.
Here are some approaches to comparative tastings that are both instructive and enjoyable.
Vertical tastings examine one estate or producer through multiple vintages. Acquire or accumulate four to 10 vintages of the same wine—such as a Bordeaux, California Cabernet or Barolo—and see how they compare.
Horizontal tastings explore one wine type across multiple producers, generally in the same vintage. Try Shiraz from Australia’s Barossa, McLaren Vale and Clare Valley, or Sauvignon Blancs from New Zealand, California and France’s Loire Valley.
Hierarchical tastings explore the pyramid of quality presented by one producer through an extensive range. Try a Burgundy producer’s villages, premiers crus and grands crus reds, or a California vintner’s Zinfandels from old-vine vineyards around the state.
The best cellars further our knowledge of wine, and some wine lovers design their collections to just that end—improving their understanding of wine in all its complexity and diversity—as well as, often, to assess aging potential. This approach, which we call the Tasting Cellar, also allows for greater flexibility, as the composition and size can vary dramatically according to the objectives of the collector.
Some wine lovers use a Tasting Cellar as a didactic tool to learn the salient characteristics of a specific wine, vintage or region. Another direction can be to conduct formal vertical or horizontal examinations of one winemaker’s output.
Many collectors use the Tasting Cellar approach to gauge whether certain wines are worth cellaring as case lots for future drinking, systematically setting aside different bottles to assess their potential for longevity based on their combination of balance, length, concentration and depth of flavor.
The criteria shift slightly when the tasting is focused on older wines. Instead of evaluating young wines for future potential, the question becomes how much time the wine has left, or whether it is still worth buying. (A good way to learn more about the nuances of older wines is to take advantage of tastings hosted by auction houses. On occasion, fine-wine retailers also host vintage retrospectives.)
Whereas collectors aiming to build a Balanced Cellar tend to buy by the case or the six-pack, the proponent of the Tasting Cellar can settle for a few bottles at a time, because the point of the exercise is to compare a narrow range of candidates. The wines may be priced high or low; cost is less important than focus. Most of the wines can be purchased at retail on release, though older vintages may only be found at auction.
Group tastings are a great way to enjoy this cellar. You can accommodate 10 to 12 people per bottle, assuming a 2-ounce pour and a minimum amount of sediment.
THE INVESTMENT CELLAR
In selecting wines for an Investment Cellar, you must focus as much on the market as on your own tastes. Only a small percentage of the wines produced around the world increase in value. And to be sold successfully, the wines must be impeccably stored, have traceable provenance and generally be offered in their original wooden cases.
These wines may be purchased as futures, bought directly from producers or procured from reputable retailers or auction houses. Be sure to check condition and provenance before you buy. Make sure the vintages are highly regarded. Count on spending a minimum of $100 and as much as $1,000 per bottle and be willing to commit to full case lots.
Here are some wines with a track record of appreciating in value over time:
The classified-growths of the Médoc, especially the five first-growths; top Right Bank estates including Cheval-Blanc, Le Pin and Pétrus
Grands crus reds, particularly from Domaine de la Romanée-Conti, G. Roumier, Leroy, Ponsot, Ramonet and Henri Jayer
Super Tuscans, including Solaia and Sassicaia; Brunello di Montalcino, including Biondi-Santi and Soldera; and Piedmont, including Giacomo Conterno and Falletto di Bruno Giacosa
Cabernet Sauvignon, especially Harlan, Schrader, Screaming Eagle and Ridge Monte Bello
In theory, the mechanics of creating an Investment Cellar are simple enough: Buy a highly rated wine, preferably upon release; store it carefully for at least five years or until it approaches maturity; and then sell it at auction. You can also take advantage of periodic lulls in the salesroom to snap up lots that are trading below recently realized price levels.
There are a few reasons why the Investment Cellar is not the best choice for beginners. Because of their cost, investment-grade wines may be out of the question. At auction, the average price of a single lot (anywhere from one to 24 bottles) is about $2,950, and the average dollar expenditure per bidder at an auction is in the neighborhood of $20,000.
Investment-grade wines presuppose a tremendous outlay, often between $500 and $15,000 per bottle. John Kapon, president and CEO of Acker Merrall & Condit auctioneers, suggests spending $25,000 to $35,000 on a 100-bottle investment-grade cellar. If the sky’s the limit, a serious cellar featuring the best wines in the world could cost as much as $500,000 to build over time.
It is equally important to understand how provenance and condition affect a wine’s resale value. When a wine is consigned directly from the winery or the cellars of a celebrated collector, hammer prices can exceed normal levels by more than 100 percent. In May 2016, Sotheby’s New York auctioned 20,000 bottles of fine and rare wine from the cellar of billionaire collector William Koch that went for a total of $21.9 million, surpassing the presale high estimate by 46 percent. Foremost among the showstopper wines were 10 bottles of Château Mouton-Rothschild 1945, which brought in $343,000, more than doubling the presale estimate of $120,000.
When your primary goal is to achieve a return on your wine investment, the old adage “Less is more” applies. If you are contemplating a $10,000 investment, you are generally better off buying two $5,000 lots than diversifying your capital and purchasing 10 $1,000 cases. Similarly, remember that the resale value of two six-bottle lots usually falls below the price of a single 12-bottle consignment of the same wine.
Single Vendor Specialists – The Wine Auction Room
We have developed a reputation as Single Vendor Specialists for good reason. The results achieved for our single-vendor collections speak for themselves. We are always interested in well cared for wines and relish the opportunity to showcase your wines in one of our Single Vendor auctions. Contact us at The Wine Auction Room to discuss your auction options.
Purpose-built Wine Vault – The Wine Storage Room
We are lovers and collectors of wine too, and we know what’s required to keep your collection in great condition. Our secure, climate-controlled private wine cellars are centrally located in Auckland; offering peace of mind that your investment is protected in one of the best wine offsite storage locations in New Zealand. For a few gold coins per bottle, you can rest assured that your wine is stored in a purpose-built, secure private cellar, ready for you to access at any time that suits you. Get a quote today.