Wine as Food or Wine as an Investment - SMcG - 2013


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Wine as Food or Wine as an Investment - SMcG - 2013

  1. 1. Wine as food or wine as an investment! Interesting question! Firstly ….What is wine! Well the oxford dictionary states – I quote [Click Mouse] 1
  2. 2. Wine ia an ” an alcoholic drink made from fermented grape juice” [Click Mouse] Whilst we are looking in the dictionary lets also quickly look up food [Click Mouse] ‘”a nutritious substance that people eat or drink in order to maintain life and growth” Combine the two & we have …. [Click Mouse] 2
  3. 3. ”an alcoholic drink made from fermented grape juice that people drink for nourishment & to maintain life and growth” & now for Investment ………….. [Click Mouse] 3
  4. 4. ” the action or process of investing money for profit.” Nourishment on one side & Profit on the other….. – 2 very different definitions! [Click Mouse] 4
  5. 5. Wine like no other beverage has gained a unique position not just in today’s modern culture but throughout the Ages. But how has a simple beverage/food that originated from very humble beginnings, evolved into an investment valued at 300,000 USD a single bottle. [Click Mouse] 5
  6. 6. The Egyptians produced wine as far back as 3000BC …. Wine in ancient Egypt was reserved for special occasions…..a drink for Royalty, Priests & as an offering to the gods …..100,s of labeled Amphorae’s have been found buried and preserved in the tombs of Pharaoh’s, the Pharaohs believed wine to be an insurance for a safe passage into the after life. Wine in ancient Egypt also showed a certain level of sophistication, inscribed on the Amphorae’s clay stoppers was details like grape variety, vintage & wine maker ….The first wine labels perhaps?? Cleary in 3000 BC wine was perceived as more than your average bottle of Sauvignon Blanc….. Lets jump to Ancient Greece 2000 BC - Wine is a staple part of daily life. [Click Mouse] 6
  7. 7. I think it’s worth noting that wine throughout ancient times was often safer to drink than water – But in Ancient Greece wine also held a major social significance. Wine was revered, the liquid of god’s – In Ancient times there was no knowledge of fermentation, the euphoric properties of wine were mystical, magical & other worldly. To celebrate this magical feeling the Ancient Greeks they would throw lavish, provocative party’s to worship ‘Dionysus’ – The God of Wine. [Click Mouse] 7
  8. 8. Wine was also an academic institution for the Ancient Greeks, the movers and shakers of the time would arrange symposiums – Drinking parties – They would meet to drink Wine and discuss the arts, politics and the challenges of the times. Even in Ancient Greece wine regions were singled out for superior quality……Early signs of terroir……. [Click Mouse] 8
  9. 9. These fashionable wines commanded higher prices ….The region of Chios was one such region – Modern historians have labeled it ‘the Bordeaux of Ancient Greek’ - The Chios wine makers to make sure their wines easily recognizable used high quality amphorae’s, stamped with a sphinx & bunch or grapes. Maybe this was the first wine brand…… Serving your guests such auspicious wines was seen as a sign of sophistication, wealth & prosperity. 9
  10. 10. Even during Roman times - Wine was the subject of great study, some of Rome’s greatest intellects mused over, how to grow, make and store wine – These texts would be the blue print that would create of some of the worlds premier wine producing regions. Of course Bordeaux, Burgundy and Rijoa being the most famous. So as we can see throughout Ancient Times wine, this ‘fermented grape juice’ influenced many different cultures, for many different reasons, nourishment, worship, to impress and of course to party. [Click Mouse] 10
  11. 11. But even though Wine has been revered throughout time, how does this justify a bottle of ‘fermented grape juice’ being sold at auction for over 300,000 USD – THREE HUNDERED THOUSAND US DOLLARS! Well the Fermented grape Juice in question, which sold for such a silly amount of money has over 100’s of years been re-defined or re-marketed as ‘Fine Wine’ Fine Wine…….. Is that different to Normal Wine! ….. What makes it special……worth 300K 11
  12. 12. The first reference to a fine wine that we would recognise today can be traced back to 1663 & the diaries of an English man named Samuel Pepys. At that time, he noted…… [Click Mouse] 12
  13. 13. “I drank a sort of French wine called Ho Bryen that hath a good and most particular taste I never met with”. [Click Mouse] 13
  14. 14. The wine he made an icon back in 1663 was from the world famous chateaux – Haut Brion….. but why it does it justify the title ‘fine wine’ Well according to James Miles, Director of Liv-ex ltd the world’s leading ‘Stock-Market’ for fine wines… [Click Mouse twice – Quickly through Live ex Slide] 14
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  16. 16. “To be regarded as a fine wine, a wine must have the potential to both improve in bottle and appreciate in value, and be actively sought after in the secondary market. To satisfy this requirement, a wine must have a long track record (often centuries rather than decades) and have received strong critical acclaim (from Robert Parker in particular)” [Click Mouse] In reality, this means only the very top wines of Bordeaux are deemed worthy to qualify along with a select group of wines from Burgundy, the Rhone, Italy, Champagne and a limited selection from the New World. A small club, with an old world membership, and a very exclusive guest list….. But let’s jump back the to the final part of that slide – “and have received strong critical acclaim (from Robert Parker in particular)” [Click Mouse] 16
  17. 17. Robert Who……? I hear you ask….. In 1978, Mr Parker , a lawyer working in small town America, launched an independent wine publication called “The Wine Advocate’ – His number of subscribers in August, 1978, was less than 600. Prior to Mr Parker, wine critics were typically individuals with a vested interest in the Wine industry. Consumers were not that educated & the general consensus was that you had to be an… ‘Expert’ to select and recommend wine. Wine reviews were more about introductions to the new world of wine & less about value for money. [Click Mouse] 17
  18. 18. Aside from being independent - The other ground breaking approach Parker adopted was the ‘100-point scale system’, by judging a wine out of 100 points, he created a system even a novice could navigate - Parker made wine simple & accessible to all. Parkers new system meant ‘reviewed’ wines where no longer a mystery to the average or even educated consumer - a good score meant good wine, and of course the higher the score – The Higher the Price. The Wine Advocate now has over 50,000 subscribers scattered throughout every corner of the globe. [Click Mouse] 18
  19. 19. Good or bad Critics, like Parker now have a significant influence on what consumers drink and wine trends/fashions throughout the world. And…..How much a bottle of wine is worth………… or perceived to be worth. From an Investment perspective its probably fair to say that ‘Parker points’ are now as important if not more important than the region, vintage or producer. [Click Mouse] 19
  20. 20. So how did a bottle of ‘fermented grape juice’ …Wine …sell for 300,000 USD… [Click Mouse] 20
  21. 21. Well the bottle in question, the most expensive bottle of wine ever sold…. a Jeroboam (8 bottles) of Bordueaux - 1947 - Cheval-Blanc. The Wine sold for £192,000 ($304,375), at Christie's in Geneva, on 16 November 2010. [Click Mouse] 21
  22. 22. Is it worth that that……. is any bottle of wine worth that – Well according to Mr Parker the wine was worthy of 100 points! He lists it as one of the greatest wines ever made! So if we were cynical we could over look the contents……Perhaps the 300,000 price tag is more about the 100 Parker Points & his listing as one of his greatest wines ever made……. [Click Mouse] 22
  23. 23. Will this wine ever be opened – I don’t think so! It will be kept under lock and key and then sold for a PROFIT………Maybe when Mr Parker passes away, it is after all one of the greatest Wine he ever tried…… I don’t doubt it is an amazing wine but the inflated price tag is about investment - ” the action or process of investing money for profit.” [Click Mouse] 23
  24. 24. So ‘Wine’ as food or wine as an investment! Can wine be an investment – Well the answer is ‘Yes’ – If you buy certain vintages, with certain scores, certain pedigree & lock them away in controlled storage then they definitely have the potential to increase in value and make a Profit! (Investment) But this makes for a very bleak future, as sad as its sounds certain wines are now made to appeal direct to Mr. Parkers Palate – thus made for profit – If this continues the outlook is we end up with one style of wine - & how dull and boring is that, [Click Mouse] 24
  25. 25. A drink that has influenced our culture for countless millennia has a much greater value than than just making money….. To most people wine is not an investment, far from it, it is about family, laughter, pleasure, happiness, nourishment. [Click Mouse] 25
  26. 26. Wine has been used to worship gods, build empires, its survived famines, plagues & under the watchful eye of man, even battled Mother Nature. This Humble ‘ fermented grape juice; has played an important role at the centre of culture for time and memorial, It’s always been more than” an alcoholic drink made from fermented grape juice” [Clcik Mouse] To me is seems it seems wrong to not to drink it – Forget Profit, life is short! Pull the cork, and enjoy it! 26
  27. 27. To me is seems it seems wrong to not to drink it – Forget Profit, life is short! Pull the cork, and enjoy it! 27
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