SA’s Leading Wine Expert Shares Fine Wine Investment Tips

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Insights from Wine Cellar fine wine merchants incoming CEO James Pietersen

2020 has been a challenging year for South African wine producers, yet remarkably, the premium sector has fared well. South African fine wine has been booming over the last decade, as scores from international critics have reached new levels. Three South African wines, in fact, have received the perfect 100/100 score from Tim Atkin MW and Neal Martin, two of the most important wine critics in the world. Covid-19 has also pushed sales online allowing producers to connect more with consumers and sell out quicker than before. While the Rand remains weak, South African wines offer the highest quality wines at a comparably low price. This implies great investment potential.

James Pietersen, incoming CEO of Wine Cellar fine wine merchants took some time to give us his insight into investing in fine wines.

Q: James congratulations on your new role. Please tell us a bit about your background?

A: Managing Wine Cellar’s SA wine portfolio, I was first enticed into the world of wine while studying law at the University of Stellenbosch. An encounter with some Château Lynch-Bages 1982 led to an epiphany and a life-long journey in wine ensued. My 25 years of experience in the SA wine industry includes retail, wine buying and working as Head Sommelier for a leading restaurant group. As a professional wine taster, I also have experience with Platter’s Wine Guide (since 2007), Winemag.co.za, Old Mutual Trophy Wine Show, Amorim Cap Classique Challenge and was a board member of SASA. Few pundits taste more wines than him.

Q: Please describe fine wine in 3 words? And please define fine wine in general.

A: Rare, finite and of especially high quality.

Fine wines are wines that are of high quality, are relatively rare and often with a great track record OR a recent cult following. Fine wine exists in contrast to wines that are mass produced and have acquired attributes that encourage collecting, investment, discussion, blind tasting and are enjoyed at special celebrations. They are from a special vineyard, from a unique vintage and produced by a gifted wine maker or wine growing team. For years, wine investment had an intimidation factor. It was considered only for the rich, and those with lesser bank accounts were not invited to the party.

Q: Would you say that wine investment is for everyday investors looking for a stable investment and to diversify their portfolios?

A: Yes I certainly think wine investment is accessible, like any investment category however, access to product, an in-depth knowledge of product is crucial, and like in the case of cars and art, wine requires provenance and authenticity. So it is not so much about having deep pockets, but having the know-how.Q: The fine wine market holds fewer risks and more advantageous gains than nearly any other financial or alternative asset category. Is this true? And why?

A: It is especially true for the South African fine wine market. The quality of our local fine wines has increased drastically in the last decade, yet the pricing has not. It is for this reason that Blue Chip South African wines currently offer a great investment opportunity, especially considering the small production volumes of many of these.

Q: Alternative assets such as fine wines have no real correlation to the financial markets.

The global economy is facing uncertainty due to the pandemic and inflationary concerns. Is now a good time for the fine wine market?

A: Fine wine is vintage specific and great vintages need to be pounced on as wine is finite.

Q: Please explain any buying or selling trends of the last 6 months?

A: There has been a huge swing to online platforms leading to greater accessibility to products and information. Sales on this front have at least doubled! High value and rare wines are still in short supply, so not down and remain robust.

Q: Are buyers looking for bargains? Are there good opportunities in the market right now?

A: There are certainly bargains out there, but this would mostly be in the more value orientated marketplace.

Q: Tell us about the stand-out deal of the past 6 months?

A: Stellenbosch Cabernet Sauvignon and Cabernet based blends from specifically the 2017 vintages still offer huge value.

Q: Your wish list – your top five dream wines to own?

A: Holy Grail South African wines include the Chateau Libertas 1959 and GS Cabernet Sauvignon 1966, from Champagne Salon 1996, Chateau Rayas any vintages and a magnum or two of Chateau Lynch Bages 1982 would do very nicely.

Q: If you were in the market to buy one wine right now – where would you put your money? A: There are many out there, but one wine to collect will have to be the Porseleinberg Syrah 2018. If you can find any older vintages these are well worth collecting.

Q: Have you had interest from international buyers?

A: Yes there has been some interest, but as our fine wine production is still so small the international market is still very much under exposed.

Q: Your forecast for the next 6 months?

A: There will be a period of consolidation and a more concerted fight for online attention. We should also see the divide between commercial wine offerings and fine wines widening further, with the top end wine prices continuing to rise steadily.   

Q: How do you help investors get started?

A: Wine Cellar has a great offering and to stay abreast of the latest releases it is crucial to join our mailing list or see our website for unique Investment options.

For more information, visit www.winecellar.co.za

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