Part 2: Formulating a Buying Strategy

Master Sommelier John Szabo presents a series of articles offering practical advice on building a wine cellar as a source of personal enjoyment and investment. This is number two of six parts.

In part one of this series, I shared some statistics on the average size and value of a wine collection intended for investment, and I outlined a simple way of creating a personal “cellar profile,” which will drive your buying strategy for a collection designed for enjoyment rather than investment. Now let’s get into formulating a logical buying strategy and calculate how much wine to buy.

Using the sample collector profile from part one, my starting point would be to put together a buying strategy that reflects consumption patterns.

Here is the profile I referenced in part one:

Annual consumption: 150–200 bottles, mostly 750 ml
10% sparkling, mainly champagne
20% white, mostly old world, especially white Burgundy.
70% red, mainly French and Italian, Burgundy, Bordeaux, Rhône, Barolo, Brunello

In this case, the consumption pattern indicates that there should always be at least 150 to 200 wines in the cellar that are at “prime drinking” each year, in the ratio of the preferred style categories established.

For our collector, that means about 18 bottles of champagne, three cases (12s) of white, and about a dozen cases of red divided among the collector’s preferred wines choices. I’d also include a few “discovery” wines to add breadth and interest to the collection — as much as we all love to drink great Burgundy or Bordeaux, wine lovers also enjoy finding and sharing new gems — as well as lots of diversity within those favourite categories (different producers, styles, vintages) to keep your drinking life interesting and make sure there’s a suitable wine in the cellar no matter what’s for dinner. And there should be a range of prices within each category, as, apparently, not every night calls for Pétrus and DRC. You’ll need appropriate wines on hand when your beer-drinking neighbour or cocktailing in-laws come to dinner.

 

Starting the Collection

Establishing a budget up front is smart practice. Wine collecting can easily get out of hand — not just in quantity but in value as well. I’ve seen marriages dissolve. In our case, let’s assume a pre-established budget of $50,000 a year for three years to get things started.

To get the collection rolling in year one, you’ll dedicate a little more of the budget to wines that are drinking well now: early maturing, current-consumption wines, and some older wines at prime purchased from sources like auctions, specialty shops with back vintages, or winery direct. Be sure to also reserve a part of the annual budget to invest into wines that will benefit from longer term ageing — to start to build out the “back end” of your collection for later-life enjoyment.

As the collection grows over time, more money can be shifted into long-term wines while “topping up” the drinkables, until you reach the point where you’ll have a lifetime supply of mature wines to draw on each year (assuming an average human lifespan), but not more than you can reasonably drink (assuming you intend to enjoy your collection personally and not bequeath it — that’s another story).

So, in our example, assuming an enjoyment window of 30 years, the collector will go through about 5,000 bottles of wine in a lifetime: 150 bottles x 30 years, with a safety buffer — it’s better to err on the slightly higher side in case you defy statistics. Running out of good wine is no fun.

 

Buying in the First Three Years

Purchases in the first year would likely total around 500 bottles (average $100/bottle), of which about one-third will be “ready to drink,” one-third a mix of wines that will benefit from mid-term ageing (three to eight years), and one-third meant for long-term cellaring 10 to 20+ years.

Purchases over the next two years follow a similar pattern, until you have a cellar of about 1,000 bottles (1,500 bottles minus what you’ve consumed this three-year period). Purchases can now slow to about 150 to 175 bottles a year (the average yearly consumption) for the next 20 or so years to keep you in good drinking shape to the sweet end. But keep in mind that consumption dependably drops with age. Three or four bottles per week when you’re in your 40s will eventually drop to one or two in the golden years, reducing your overall needs, so consider tapering off your buying to reflect your drinking habits.

 

How Big is Your Cellar?

Now you know that you need a cellar that can hold at least a thousand bottles, lying on their side. I’d suggest including a buffer zone for another couple of hundred. I’ve never met a collector who hasn’t eventually acquired more wine than they have cellar space for. Those irresistible buys come around all too frequently. But any more than that and you’ll have more wine than you need. Though that’s not the worst problem to have.

You’ll need a minimum of 100 square feet with nine-foot ceilings to store 1,200 bottles comfortably in a functional storage space, though, of course, cellar designs vary immensely. In the next post I’ll cover proper storage conditions and functional versus artistic designs.

 

Cellar Management

Needless to say, keeping an up-to-date cellar inventory is critical in order to manage your collection. This becomes even more necessary if you store wine in multiple locations (home, cottage, yacht, chalet, off-site warehouse, etc.). Especially useful are apps that allow you to create multiple cellar locations and input “drinking window” dates, allowing you to search your collection for all the wines in their prime, or alert you to those nearing the end of their expected lifespan. A function that tells you exactly where a particular bottle is in a large cellar will also save you time and frustration hunting around for it, disturbing many bottles along the way. Large collections invariably get messy as bottles are taken out and new ones added, and it’s inadvisable to keep constantly shuffling wines around to keep like with like, unnecessarily disturbing bottles and risking breaking some on the way. More handling equals more risk, more danger.

>> Need some help managing your cellar? Xpeditr to the rescue… We can do a thorough inventory and make recommendations to protect and enhance your precious collection.  

Another all-too-common misstep is failing to keep the cellar inventory up to date and accurate. It’s easy to grab a bottle in the middle of dinner and forget to deplete it from your inventory the next day. All systems are only as good as their users. Fortunately, there are systems available that can do the work for you quasi automatically, such as bar codes or RFID tags and a scanner right at the cellar door. All you need do is swipe the bottle as you remove it from the cellar, or swipe it in. The downside is that there’s additional work to print and affix the barcodes/RFID tags to the bottles when purchased (some wines will have usable barcodes already). But considering the amount you’re investing, it’s worth the effort. And despite your best efforts, count on doing (or hiring someone to do) a reconciliation of your inventory from time to time.

There are some good apps to help you out with this, notably CellarTracker and InVintory, which I use with my clients.

 

Next Up: Proper Wine Storage

Did you miss Part One? Check it out here.