New Heights for South African Wine

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Written by Malu Lambert

You never know what’s around the corner on the Helshoogte Pass. It’s home to some of Stellenbosch’s most awarded wine estates, though most are obscured from view on the winding road. I’m always surprised, once I drive through one of the unassuming gates, by the scope of the estate that lies beyond. Bartinney is no different. So modest is their entrance that initially I drive past, a quick turnaround and soon I’m on a dirt road, buffered by the scent of wild mountain fynbos, heading towards the tasting room. Set on the slopes of Botmaskop, the estate looks out over the Banhoek Valley and its vineyards are all on divergent, undulating slopes.

“It’s extreme viticulture,” says owner Rose Jordaan. “We have different pruning methods for each vineyard as each one is on a different aspect.” She says this in a way that implies she knows this is meant to be frustrating, but she actually revels in the non-uniformity of the farm—and so do the grapes. We’re at the centre of the wonky vineyards, upstairs in the tasting room, taking it all in. Half a moon hangs in the blue sky behind Rose as she gaily pours us a glass of the recently launched Hourglass Chardonnay 2015. Rose has long, gold-tinged blonde hair that she wears loose hanging in waves, a ready smile lights up her face.

The Hourglass Chardonnay 2015 is no ordinary release. “It’s taken us 10 years to get here,” says Rose. “This wine is a fingerprint of the harvest—it’s everything that this terroir is.” 

Costing R620 per bottle, only 800 have been produced. It’s Bartinney’s way of hoisting their flag, of entering the South African fine wine market. A small, nascent market true—but one that is growing. There have been a number of new releases entering SA’s fledging fine wine category, such as Plaisir de Merle’s Charles Marais 2013 (750 six-bottle cases at R1050 per bottle). These are wines that are joining the ranks of the more established cohorts of Vilafonté, De Toren, the Sadie Family Columella and Kanonkop’s Paul Sauer.

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Fine wine trading, particularly of Bordeaux wines, is big business. Wines that never see the light of day sit in warehouses and are traded on computers like stocks. In fact, according to Knight Frank’s Luxury Index (KFLII): “Wine has finally overtaken collectable cars as the most popular luxury investment for the world’s super-rich.”

So where does South Africa—the 8th largest producer of wine globally—stand in this lucrative market? The answer is that we’ve been trying. A few years ago Kanonkop attempted to find a solution by offering investors the opportunity to buy ‘wine futures’ (a method of purchasing wines early while the vintage is still in the barrel). The wines were kept in a temperature-controlled environment at the estate until such time as the investor wanted to sell. The concept unfortunately didn’t take off: the problem boiled down to the frustrating logistics of warehousing.

South Africa is now producing some of the hottest and most highly sought-after wines in the world. While the rise of investment wines have seen some SA estates adding a top (tippytop) tier to augment their range, there are a few who have focused on the category exclusively. De Toren—famed for their exceptional Bordeaux-style blends—is an example of one such estate playing the long game.

Winemaker Albie Koch of De Toren weighs in on how to define what an investment wine is: “The wine should represent exceptional quality, ageworthiness and timelessness.” He goes on to say that three factors determine if a wine is investment material: “The ageing potential, an increasingly higher demand  than supply and an element of scarcity or rarity, which will ensure a higher value for the wine and ultimately make it a soughtafter collectable.”

Vilafonté is another wine brand that’s been specifically created for SA’s fine wine market. Co-founder and managing partner, Mike Ratcliffe adds: “Ultimately it is very difficult to create an investment wine as the market is not easily fooled. The most important ingredient as a  common denominator for the world’s great investment wines is time and patience.”

Then there’s the question of price. I pose this to Mike, and ask him what the cost implications are when making these kinds of wines. “Price and value has always been and will always remain a relative concept. A true investment wine should always be considered retrospectively as having been exceptional value on acquisition. A wine styled as an investment wine is only distinguished from a true investment wine by the market’s ability to accept the quality, for demand to exceed supply and for the price to be exaggerated by the disproportionate demand. If a wine is expensive at release and doesn’t increase in value—then it was never a true investment wine.”

Mike elaborates that the way forward is looking encouraging, that investment wines from South Africa are being accepted, and fast. “However, the biggest challenge facing the industry in the investment space is supply. Most high-quality SA wines with potential future investment pedigree are made in volumes that by international standards would be considered insignificant. There is little value in producing one barrel of investment grade wines. A second issue facing the industry unwillingness or a lack of vision in holding back inventory for future releases.

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Back at Bartinney, Rose thinks there's another piece of this puzzle to consider: "If you want to make an exceptional wine, you price it at a figure that allows you to farm your vineyards sustainability."

High up here on Helshoogte Pass, taking in the view of the natural riches of the winelands, it's easy to consider that concept of investment wines should -- as any great wine should -- begin in the vineyard. If the investment starts at a (vine) root level, the potential for SOuth African wine reaching great heights is there for the taking. 

Dust Collectors to invest in

Store these wines correctly and you could see a generous return on your investment down the line. Or as Colin Collard, founder of the Wine-of-the-Month Club, says: “What makes investing in wine different to holding other types of assets is that if its value doesn’t appreciate in the way you expect it to, you can always drink it!”

  • Vilafonté Series M and Series C
  • De Toren Book XVII and The Black Lion
  • Bartinney Hourglass Chardonnay
  • Klein Constantia Vin de Constance
  • Kanonkop Paul Sauer and Pinotage
  • Boekenhoutskloof The Journeyman and Syrah
  • Sadie Family Columella
  • Charles Marais Plaisir de Merle
  • Vergelegen V
  • Meerlust Rubicon
  • Waterford The Jem
  • Ken Forrester FMC
  • Raats Eden High Density Single Vineyard Cabernet Franc