Invested in South African wine

I’ve been eyeing out the shed in my backyard. I want to turn it into a wine room á la the trend sweeping the drinking world, the pub shed. Sheddies—as they’re known—turf out the lawnmower and spades to create their very own watering holes at the bottom of the garden. My shed will act as a cellar, stacked to the rafters with fine wines (perhaps I’ll even scatter the floor with apricot pips). It seems a bit of a waste to store ready-to-drink wines in this future shed-cum-cellar; it will need to be a space rather for investment wines.

While there are many great South African wines fit for collecting dust, the fine wine investment sector of industry hasn’t quite taken off. Though there are a number of wineries working towards the cause.

One of these is Vilafonté, which produces only two wines, Series M and Series C.

Co-founder and managing partner of Vilafonté, Mike Ratcliffe is one such instrumental player.

“The investment in and maturation of fine wines will be the next leg on which the South African wine industry will start building its future reputation,” says Ratcliffe.

“South Africa has to raise its prices. Raising prices won’t happen unless we actually do it. Wineries need to start setting aside vintage stock now for the purposes of showcasing their premium cuvées in the coming decades.”

He goes on to say that more than 40 per cent of Vilafonté turnover is not from the current vintage. “We recently sold 50 magnums of 2005 Series C at R10, 000 to R13, 000 per bottle and they sold out in one day, with many clients complaining that they were only offered one!”

“We have the quality. This revolution won’t start itself.”

Another salient point of Ratcliffe’s is that: “fine wines won’t store or age themselves…”

That’s where companies like Wine Cellar (Fine Wine Merchants and Cellarers) come in handy. Along with selling wines online, they also have temperature-controlled, specialised cellars where they store rare and aged wines.

“There are currently only a handful of South African wines that would fit into an international fine wine collection,” says director Roland Peens.

“Wines such as Klein Constantia Vin de Constance, Kanonkop Paul Sauer and Pinotage, Boekenhoutskloof Syrah and Sadie Family Columella have built a track record of quality, ageing and individuality over the last decade or more. Recently however, there has been a boom in South African fine wines.

“South Africa is producing world-class wines, but these need to reach maturity and rarity first, in order to achieve icon status.”

When it comes to what wines are best suited to becoming investment wines, Peens says classically styled reds will top the list. “Wines that improve with age are the backbone of the fine wine investment market.

It starts literally from the ground up.  “Winemakers cannot afford to cut any corners. Long ageing, terroir driven, fine wines take many years of investment without immediate returns.”

Abrie Beeslaar, winemaker of Kanonkop (the wine estate making the lauded Paul Sauer) agrees with this. “You need the right grapes. The process must start from the soil up, not from the boardroom down.

“We compare quality wise with the best in the world, it is just the price points and perceptions that don’t reflect that yet. The path towards this is time, consistency and the right terroir.”

The world’s most famous investment wines hail from Bordeaux, of course. De Toren Private Cellar has taken the Bordeaux concept—in terms of both style of wines as well as creating high tier products—and has run with it.

“There are South African wines with pedigree and consistency that match some of the top investment wines in the world,” says owner Emil den Dulk. “The first thing is to produce these wines, and then to convince the world. The overseas wine press is starting to wake up to South Africa and we need to get our wines on the international auction and collection scene.”

With De Toren’s affinity to Bordeaux I can’t help but ask if Den Dulk thinks there’s a possibility of ever trading South African wines as an investment like our French colleagues do. “There are some wines already on those platforms, but are placed there mainly through the connections of the owners to the fine Bordeaux trade. Local auctions are starting to deliver a platform and international buyers should be encouraged to come and purchase here. Top winemakers should also venture into starting a future market.”

Peens concurs this point: “We’ve seen a boom in the South African vintage wine market over the last five years. Blue-chip wines are realising over 20 per cent year-on-year returns and, while fine South African wine continues to be underpriced in the international market, the trend is set to continue.”

I’d better get to work on that shed.

P.s Wine Cellar is currently building a fine wine-trading platform set to launch in 2017

-Malu Lambert