I started a wine investor service because the Investors in the wine and/or spirits business almost always lose their shirts--metaphorically speaking of course. Most of them have very nice non metaphorical shirts.
But every time an investor gives up, the wine industry is a little bit worse for the experience. Not to mention the talent and jobs that get wasted. So whenever I work with an investor, I make sure they avoid the traps that kill other investors.
Investors trading in highly regulated markets are usually shocked by how little hard information there is about wine compared to say pork bellies or AT&T stock.That's why you need me or somebody like me who knows the numbers from wineries that others can't get, and knows at least the key personalties.
But most don't even know the current market conditions, e.g.. right now the Rare Whiskey market is soaring and the old standby Bordeaux wines are struggling. Or the fundamentals---Do you know how to tell if the vine clone matches the soil type in a way that increases your cash, or profits, or net worth depending on your goal? And those are only a couple of examples.
Among other things, the average return for a winery in the US in 6.9%---not very glamorous. So you'd better find the ones with Warren Buffet like fundamentals and repeatable profits.
A banker friend of mine told me not long ago that 90% of the wineries his bank had loaned money to were out of covenant--their loans could be declared bad loans and the wineries closed down. Or forced to suck so much cash out of their business, that they have no chance to succeed, displacing families and hurting all of us.
As an investor, you don't want to be the one that comes in to prop up a losing situation, and end up losing 95 cents of every dollar you invested.
I have a short ebook/soft cover "The Professional's Guide to Investing in Wine" (working title) coming very soon. If you'd like to get on the mailing list I will notify you when it's ready for download and offer you a special introductory price. Just email me at email@example.com
A classic Chateau renames itself hoping to improve image and sales. Actually it was originally two chateaus owned by a brother and sister ---or at least two fields with different names. These days they are both known as Chateau Pichon Longueville and Pichon Comtessa de Lalande---both Second Growths in the Classification of 1855 and two of the the best wines in the world.
In the next 24 hours, the world will guzzle 1.6 billion cups of coffee, the most popular beverage on the planet besides water and tea. It’s big business, too: Global coffee exports totaled $28.6 billion in 2013—after oil, it is the world’s most traded commodity.
But there’s something else that likes coffee even more than humans: Hemileia vastatrix, better known as coffee rust or roya disease. It’s a fungal parasite that survives on coffee tree leaves, and in the 2012-13 crop year alone, it caused nearly$499 million in losses (pdf, p.3) among Central American coffee growers...
I've had a great response to the article comparing coffee and wine tasting---so when I see something parallel I'll pick it up here. Wine suffers from the same kind of fungus problems as coffee---for wine it's phylloxera (Mites) and Utipa (fungus) and the glassy winged sharpshooter (that's really the name) and many more. A lot of a vineyard manager's time is spent fighting diseases and pests….just like the coffee plantation manager.
I was on the board of directors of Thanksgiving Coffee in Mendocino California for several years and the growing of coffee and grapes is a lot the same….specialized areas that bring higher prices, specialized tastes common to a given region, the fight in the canopies of both to keep the leaves aerated and dry.
Notice one big difference though---coffee is the 3rd most popular beverage on earth and the 2nd behind only oil among the world's most traded commodities. That's quite a social impact that wine can't match.
Stuff.co.nz Bordeaux cruise: Afloat in a French idyll Stuff.co.nz From the moment I arrive at Bordeaux Airport, I feel as though I am an extra in an SBS late-night movie.
Larry Leigon's insight:
A possible vacation thought for the wine lover….there are also cruises in Burgundy as well. They can be a once in a life time experience, depending on your sense of adventure. By the way, the Bordeaux airport is no prize….leave extra time.
The moment I realized how modern capitalism can subtly erode the soul was the moment I could no longer coax something drinkable from my drip coffee-maker.
The early 18th-century German jurist Justus Möser disliked the advance of the market economy for a number of reasons. But there is one in particular that could explain our fetish for increasingly complex methods of brewing a cup of java. Jerry Z. Muller summed it up.
Above: Giotto's "Marriage at Cana," 14th century (image via Wikipedia). We all know the story of Jesus turning water into wine at Cana, as recounted in the Gospel According to St. John. According to Jewish tradition, a marriage cannot be performed without a blessing over the wine. Had Jesus not transformed the water into wine, there would have been no marriage that day. [...]
If you're interested in wine and the bible you can read about the Wedding at Cana, Noah and others in the chapters of my soon to be released book, "Does God Drink?". If you want to pre-order, or have questions, just email me at firstname.lastname@example.org. I'd love to hear from you.
Santa Rosa Press Democrat Frost worries ease as bud break looms on North Coast Santa Rosa Press Democrat Recent rainstorms have Sonoma County grape growers feeling more optimistic about being able to protect their crops from killer frost as...
Larry Leigon's insight:
It's almost Spring and for those of you who have been watching the weather you know 2014 has been a curious year---much dryer than almost any time ever recorded. Late frosts could still cut down the size of the crop, but it's already noticeably warmer. Last year was a giant vintage---the second in the last two years. So it wouldn't be surprising if 2014 comes in lighter but there is plenty of time for surprises between now and September.
Survey results suggest hundreds of winery owners across California, Oregon and Washington are strongly considering selling their properties, say analysts with Silicon Valley Bank.
Larry Leigon's insight:
I mentioned my "Professional's Guide to Investing" in an earlier story this week. Itwill be available as an ebook in the next few weeks…..if you're interested in getting an advance copy at a special introductory price, just email at: email@example.com
Rob at Silicon Valley Bank (who did this analysis) was the first banker to have faith in me when I was starting out with my partners to build Ariel Vineyards years ago. He generates a lot of hard numbers to work with, and often provides insights that others can't see.
Pricing is the most esoteric thing about wine---the mystery of fermentation not withstanding. Methods range from statistical approaches to wild guesses by people who have no idea about pricing or pretty much anything else in the wine business. Pricing is also the second most important factor people use to decide whether to buy a wine or not…..the first? The label.
Roy Welland, owner of the now-closed Cru, the New York restaurant that became a clubhouse to the city's top wine lovers, is consigning his collection to Wally's Auctions. The New York-based house plans to sell the 100,000-bottle trove at two auctions this fall, with some of the wines being offered in online auctions or at retail. Wally's staff estimates the collection is worth $15 million. "It's a little heartbreaking to see it go," Welland told Wine Spectator. "But I'm looking forward to buying more wine."
Larry Leigon's insight:
You don't see this very often---a private collection of such great wines coming onto the market all at once. If you like the Burgundy wines this is a unique opportunity to taste things you otherwise will probably never taste.
A different Chinese investor just bought the Mondavi Carneros property as well, as Robert's children and grandchildren are refocusing on prestige wines. For the moment, it seems like Asian based investors are heating up their search for wine properties.
YahooXtra Blogs (blog) Ferguson's wine collection fetches staggering sum at auction YahooXtra Blogs (blog) Last month we revealed that Sir Alex Ferguson was auctioning off his collecting of vintage wines saying that it could raise the former...
Larry Leigon's insight:
Wouldn't you like to get $29.5 million for your wine collection?
This a rarefied part of the wine business. Exceedingly wealthy folks (mostly men) who pay outrageous prices for bottles that are rare---that no one else can have.
Ferguson is a famous soccer coach and prices here ran 30%-50% about normal levels for the French wines. $1.6 million for 1 bottle alone, although it's quite a bottle--a Methuselah of Romanee Conti from 1997.
If you like the rare wine part of the business check out www.vinfolio.com ---I have nothing to do with Vinfolio---but if you're looking for rare, you will find them there.
For anyone interested to learn about coffee, learning about where and how it all begins is both interesting and fundamental. A big part of the flavour of coffee depends on the crop’s terroir, that combination of geography, geology and climate that affects the growth of the coffee plant...
I was on the board of a coffee company for several years and it's amazing how much of tasting coffee is like tasting wine. There are flavor wheels for coffee too, just like wine. WineWords and coffee words are very close---the main difference is in the subtlety and intensity of the flavors. And of course, wine is not normally drunk hot. The heat adds a different element to coffee tasting that isn't in wine tasting.
Old World wineries often trace their beginnings back a couple of hundred years. The history of Count Saladini Pilastri dates back to the year 1000; a noble family from Ascoli Piceno that boasts of a rich and fascinating past whose ancestors were priests and leaders. The deep antique roots of the family are a heredity for the present; it is a heredity of long lives of tradition over the centuries of history.
The vineyard activity has always coincided with the value and culture of the land from which it belongs. Count Saladini Pilastri's farm began three centuries ago; the land has always produced wine. Originally the tenant farmers gave up their wine to the Counts so they could age it in the so called "barriques", the famous durmast barrel. [...]
In a memorable scene in Casino Royale, James Bond sipped Chateau Angelus on a train while meeting Vesper Lynd. The St Emilion maker of bold blend of merlot and cabernet franc paid for the placement in cash and wine. Jean-Bernard Grenié told me today that the laws prohibiting advertising wine in France made the producer …