Articles
9 February 2012

Stocking the Wine Cellar

Collections Bring Profits Beyond Monetary Measure

by Linda Kennedy

09 February 2012—

 As people’s interest in the culinary arts increases, so does their interest in wine, says Sheral Schowe, a local wine educator and president of the Wasatch Wine Academy. Today, more and more people are building wine collections, one of the most stable collectable investments one can make.

 “Wine is a top-notch long-term investment and a good one for those who travel and have second homes outside of Utah,” Schowe says.

For Business or Pleasure

Though a well-stocked wine cellar may mean better pairing with your favorite meal, Schowe says wine collections bring more to the table than just a dining addition. A healthy wine collection can be a healthy investment, she says. “Overall, wine collections generally bring up to 75 percent return in profits, depending on the ratings, and an average of 15 percent the first year and increases after that,” says Schowe. “But the purpose of collecting is to sit on your collection and have it increase in value.” 

A novice collector should begin by following wine ratings, which can be found in wine periodicals—anything more than 96 is considered a superb vintage. Bordeaux and burgundies are currently desirable collectables. “If you go with a wine from a top growth, buy in a top year and have the time to sit on it, with proper storage, then you can certainly make a lot of money,” Schowe says. “A temperature-controlled room in the home is one way to store it, and bonded warehouses can verify that your collection was stored correctly, which helps maintain the collection’s value.”  Schowe adds that collectors can make a big profit buying en primeur, which is a method of purchasing wine early—even before it’s bottled.  

  Schowe, however, cautions that not every wine increases in value; new wine collectors should note that it takes about five years to turn a profit. The good news, though, is that capital gains on wines are not taxable. 

Just how much green can a wine collection create? One of the latest big sells was the Château Lafite 1982, selling for $25,000 from an original $325 price per bottle. But before you start selling your collections, check with the Utah Department of Alcoholic Beverage Control (DABC) to ensure you’re following Utah laws.

 

A Ripe Selection

If you think Utah’s wine selection doesn’t bode well for the collector, think again. According to Brett Clifford, coordinator for the wine division at the DABC, the Beehive State has a well stocked wine selection. 

“People visiting from out of state have told me that our selections are some of the best they’ve seen anywhere,” says Clifford, who buys wine for the State of Utah. 

When purchasing wine for the state, Clifford searches for unique imports and vintage specific wines from small wineries that are lesser known and not advertised, but considered the most collectable. He also has solid relationships with wineries that usually don’t sell their products at retail locations. When a winery is hoping Clifford will purchase its product for a ski resort, for instance, Clifford purchases it on the condition the wine can also be sold in Utah’s stores. 

And when those fine wines don’t fly off the shelves, wine enthusiasts have a great opportunity to stock their collection. The first Monday of every month, Utah’s liquor stores have close-outs sales; the top values are found at designated wine stores. “If you find a $150 bottle for $75, you’ve done well,” says Schowe.   

But, the most important value in wine collecting is for pleasure, says Clifford, whose collection is 30 years old. 

“My caution to everyone is to collect wine because you enjoy drinking it and sharing it with friends. Very few people make money, unless you really know what you’re doing,” he says. “So, buy what you enjoy—collect those and put them away in a cellar. There is no greater pleasure than bringing out a fine wine on a special occasion and sharing it—it’s like sharing an old friend.”  

Schowe agrees, noting that she uses her wine collection to present tasting experiences for those interested in learning about wine. Another local collector, she says, leads decanting wine experiences at his home, sharing a historical perspective on how the wines in his collection evolved. “He had eight or nine vintages from a specific wine he collected and it was a wonderful experience.”  

If you’d like to learn more about wine collecting but don’t know where to start, ask your favorite restaurant for tips; in fact, many local restaurants and food stores frequently host wine and food pairings. Master winemakers and chefs also showcase hundreds of wines from around the world at the Annual Park City Food & Wine Classic, considered the most comprehensive wine event in Utah.   


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