Bottom Line/Personal: Have you ever thought about wine collecting? Well, here’s how.
I’m Sarah Hiner, president of Bottom Line Publications, and this is our Conversations With the Experts, where we get the answers to your tough questions from our leading experts.
Today I’m talking to Amy Dixon. Amy is the former buyer and fine wine expert at Stew Leonard’s wine stores, one of the top 10 retailers for wine in the country. She’s currently managing a portfolio of fine wine collectors at Nicholas Roberts Fine Wines in Darien, Connecticut.
Amy Dixon: Thanks for having me.
Bottom Line: What’s the first thing that someone has to think of if they want to start collecting wine. There are so many different aspects. What’s the first question that someone should ask themselves when they decide that they want to look into becoming a wine collector?
Dixon: It can be very daunting, learning how to collect wine. And really, you’re never going to go wrong picking your favorite wines in great vintages from tried-and-true producers that produce good wine. So really, having a good retailer and having a good relationship with a retailer is a great place to start.
Once you have more than, I would say, a beginner’s knowledge of wine, I advise customers to really research their needs. Say you have a child who was born in 1985—you want to go online or to your retailer and say, “Listen, my son or daughter was born in this year or I was married in this year. It means a lot to me. What wines are best from that particular vintage?” You really want to focus on the vintage. Vintage is first and foremost the most important thing when collecting wine.
From there, then you want to explore the regions that had a good year that year. Some regions may have had an exceptional vintage and some regions, it may have been a disaster. Wine is all about weather, so if you had bad weather in that particular year in the Napa Valley, you’re obviously not going to want to collect wine from that area.
Bottom Line: Is there research that someone needs to do before they start even thinking about it? Do they need to read books on it or visit websites for them to research about what regions or years or wine or things like that?
Dixon: Well, yes. Again, consulting with a local retailer to find out the vintage that you have in mind or the region that you have in mind, what vintages are best from that region or what regions produce great wine in that particular vintage. Those are really going to help you. And there’s a variety of resources online that you could certainly go onto. WineSearcher.com is certainly a great database for all that kind of information.
But you really have to focus first and foremost on how you’re storing that wine. You can collect wine until you’re blue in the face, but if you don’t have a place to store it, it means nothing. If it’s just that you want to buy a special wine to commemorate the birth of your daughter, then that’s a lot different than saying “I’m going to use wine as an investment, and I heard that Burgundy produced great wines in 2011, and I want to buy $20,000 worth of wine and lay it down.”
Those are two totally different types of collectors. There’s the hobbyist and there is somebody who is doing it from an investment standpoint, and both have merit. It’s entirely up to the individual which way to go. But either way, you really want to make sure to protect your investment by investing in a good wine refrigerator or cooling unit in your basement.
Bottom Line: Which then again would have to do with what kind of goals you have in terms of how many bottles of wine.
Dixon: Right, you want to think about size. A decent collection, honestly, I don’t think you need more than 10 cases of wine, because it takes a very long time to go through it, number one. The time and energy that it takes to collect, you really want to buy solid cases if you can.
Obviously, it depends upon your budget; sometimes you may only be able to buy one bottle of Screaming Eagle Cabernet, which is $1,000 a bottle—that is above most people’s budget—or that $1,000 could be spent on buying three cases from a good vintage from a particular region that you’re really fond of in Spain that will appreciate in value.
Bottom Line: Is wine really a good investment?
Dixon: Yes, wine is an excellent, excellent, excellent investment. The trends, particularly in Hong Kong for the auction market, are astronomical right now. If you can afford to invest on the levels that are commanding those kinds of prices, it’s a very worthy investment. And it’s very low time-consumption. If you have a good retailer that’s steering you right…or if you have a good relationship with an auction house or auctioneer that’s pushing you in a good direction…you can invest in just a few cases of wine and double our investment within weeks.
Bottom Line: And would that be with the intent of reselling it versus holding onto it?
Bottom Line: So here’s my really crazy question. If I buy the wine, I can’t drink it, because if I drink it, it’s gone.
Dixon: Once you open a case of wine, particularly if it’s a wooden case, that wine depreciates 20% the second you crack that case open. So think long and hard before you want to dive into that one bottle that leaves you with 11.
Bottom Line: That’s an interesting point, then. When you’re collecting wine, you’re really buying by the case. It isn’t even buying specific bottles of wine.
Dixon: I mean, obviously there’s very special and unique “unicorn wines” out there, if you will, to quote a commonly used term these days. There are some special bottles for sure, but if you want to get best return on investment, you really want to buy solid cases and keep them as solid cases. Don’t be tempted to crack that open and take a peek, none of those things. Because the second you break the seal of that case, immediately you drop 20% in value, and that’s a lot of money.
Bottom Line: Is there a starting budget that someone should think about?
Dixon: I would really give yourself—everybody’s budget is different—but I think if you have $2,000, you can find some really, really fantastic wines for like $300, $400 a case from regions such as Burgundy and Spain, certain parts of Châteauneuf-du-Pape in the Rhône Valley. There’s a lot of collectible wines out there that don’t cost you in the thousands of dollars per case, in the $300-to-$400 a case price range. If you buy three or four cases—and I always recommend that, if it’s something you really love, to buy two or three cases, sell two, and then it pays for your one that you get to keep and enjoy.
Bottom Line: Is there a way to know if a wine that is coming up is going to be great? Like they talk about something being a good year someplace.
Dixon: Weather, weather, weather. It’s all depending upon the weather. I have customers already that are asking me what’s going to happen in California this year. I said, well, it’s now August…we’ve got a good month before we can really say how the vintage is going. At this point, we are on a good trend, but things can happen. They can get hailstorms, they can have a bird infestation that comes through. All kinds of disasters. Or rain during harvest. All those things are going to drastically affect the vintage. So you really want to pay close attention to the weather.
Bottom Line: What are the types of wine or the regions of wine that are—I’ll call it—the most collectible or the most marketable?
Dixon: The classics. The classics being Bordeaux, Burgundy, Champagne, and cult California and high-end Italian, super Tuscan, and Barolo and Barbaresco wines. Those are certainly the most collectible and have the best return on investment if you need or desire to sell them at auction.
Once you go outside of that region, it becomes exponentially more difficult to turn those wines over from a selling standpoint, but there’s a lot of great collectible regions that, if you’re not worried about resale value and you just want a wine that’s going to age beautifully and appreciate in quality, then the sky is the limit. There are a lot of fantastic religions outside of the classics that you could gravitate toward.
A couple that I would suggest would certainly be Spanish Rioja. I would look to actually the south of Italy, in Puglia and Calabria and Sicily—there are extraordinary wines down there. And again, they’re not expensive in the wine world—we’re talking $30 a bottle. You can find some really high-quality wines that will age 15 years easily.
Bottom Line: Is someone really considered a collector if they just want to buy a bunch so that they’ve got it in their basement and they want to drink it versus if they want to invest in it and be able to resell it and trade it?
Dixon: A collection is a collection is a collection. If I have a collection of wine glasses or spoons, you’re splitting hairs at that point. If you have more than a few bottles of something really special, then I would consider yourself a collector. You don’t have to have hundreds of bottles—it can be eight bottles of something really fantastic that you like to enjoy and buy every year for yourself.
Bottom Line: Great advice. So the bottom line on collecting wine and how to become a collector of wine—know what your goals are. Do you want to just collect wine for your personal use, or do you want it to be as an investment? Know for sure that you’ve got a good place to store your wine so that it doesn’t go bad over the period. Never break open a case of wine if you ever want to resell it.
And the most collectible areas are really the mainstays—France, Napa Valley. If you want to just find good wines to be able to keep for yourself, there are all sorts of regions. Whatever is your favorite becomes worth your collection. This is Sarah Hiner with Bottom Line Publications.