Six bottles of 1999 DRC La Tache sold for 29640 to an internet bidder at Acker Merrall amp Condit39s auction held Jan 23 in Hong Kong China

Six bottles of 1999 DRC La Tache sold for $29,640 to an internet bidder at Acker Merrall & Condit's auction held Jan. 23 in Hong Kong, China.

Wine Collecting in the Digital Age

The digital revolution–and, more to the point, the internet and information age–have catapulted wine collecting from a pastime once reserved for rich male snobs to persons of every conceivable stripe.

 

Starting in the early-to-mid 1990s, websites sprang up dedicated to fine wines, rare wines and the auction houses that sold them. Then, bidding platforms came into vogue–now-established entities, such as LiveAuctioneers.com, Invaluable.com (formerly Artfact.com), iCollector and others, made finding collectible wines at auction easier and more accessible. Finding the right auctions also got simpler via sites like Barnebys.com–the Swedish-based auction aggregator that was started in 2011 and recently launched in the United States. Barnebys isn't a bidding platform; buyers go there to find what they're looking for and are directed to the auction houses that are featuring those items.

 

All these resources have produced a seismic shift in the field, making wine collecting as we knew it from 20 years ago unrecognizable today. “For the most part, the old stereotype of the wine snob is a thing of the past,” said Jeff Zacharia, president of Zachys Wine Auctions in New York. “What we've seen is a democratization of the wine collecting world–more young collectors, more international collectors.”

 

“Back then, it was an older, male-dominated category, mostly affluent people in larger Western cities,” added John Kapon, CEO of Acker Merrall & Condit in New York. “Collectors today, on average, are much younger than 20-30 years ago. Asia and South America especially have emerged.”

 

Computers have been the driving force behind the changes. “The digital age has surely contributed to the rise in wine collecting,” Zacharia said. “Information is more accessible to wine drinkers, so more and more people are being attracted to the fine wine world.”

 

Ian Dorin, Heritage Auctions' New York Director of Fine Wine, took a more utilitarian viewpoint. “Because of the massive upward trend in prices, wine is being seen more and more as a commodity.”

 

Michael J. Moser, a specialist in the Fine Wines Department at Skinner’s in Boston, agreed. “The fine wine market today more closely mimics a commodities market than a collectibles market. Net results are clearly higher now as compared to, say, 20 or 30 or even 100 years ago, even when taking inflation into account. But the ebb and flow of results is more akin to financial markets, and the effect of internet bidding is embedded into the system of bidding in general, I feel.”

 

Kapon said a lot has to do with simple economics. “The internet may provide great information, but that's less important than the fundamental impact on prices from increasing global incomes and the finite amount of the world's greatest wines produced. More people with more money, plus the same annual supply more or less, all equals rising prices. The macro basis for that is supply and demand.”

 

But how much impact has the internet had on the skyrocketing prices of wine at auction? A lot, Dorin said. “It was a total game-changer. Prices went through the roof, and as a result collecting wine has become incredibly popular. It's so easy, with computers, to be an informed and even sophisticated, collector.” Moser added, “The internet facilitates the dissemination of information on a global scale.”

 

Kapon said the web has made collectors less dependent on traditional wine critics to determine what they want to buy and collect. “That, in turn, has made wine collecting more fun and more 'democratic' in terms of who has access to what information, plus it makes it easier and faster to buy the wines that people love and collect. These factors have led to an increased demand, and more knowledge, of wine.”

 

For example, Hart Davis Hart has been ahead of the curve for some time regarding the internet age. The firm's retail business has always been online–no brick and mortar storefront at all–which allows customers to buy wine from HDH 24 hours a day. Recently, the firm developed a bidding platform that allows bidders to place absentee and live bids from their smart phones, tablets or computers. It's a trend that's spreading.

 

Identifying the hottest trends in wine collecting is always fun speculation. “Bordeaux has always been the core of Hart Davis Hart's business,” Smoler said. “It's nearly 50 percent of the wine we sell. But in recent years Burgundy has become increasingly popular.” Heritage's Dorin said that Burgundy “is still king,” with Bordeaux keeping a high ranking in the market, adding, “Champagne has really taken off.”

 

Zacharia and Kapon agree. Zacharia said Bordeaux and Grand Cru Burgundy are at the top of Zachys' list, and Kapon added that there were eleven so-called “Million Dollar Brands” in 2015 – wines with total US sales of $1 million or higher. “Eleven out of eleven came from Bordeaux and Burgundy.”

 

Moser noted that the advent of the internet has given rise to some slightly more esoteric hot regions–diamonds in the rough, so to speak. “These would include Vega Sicilia in Ribera del Duero, Chateau Musar in the Bekka Valley, Sin Qua Non in the central coast of California, Egon Muller's wonderful Scharzhofberger Riesling in the Mosel, and others that might otherwise have flown under the radar.”

 

As for California wines, Davidson said they are also very notably sought after these days. “With the modern 'cult' wines such as Screaming Eagle and Harlan Estate, there has been a growing appreciation for well-preserved examples of the classic wines from California. We've seen wines such as Inglenook from the 1940s, '50s and '60s selling for thousands of dollars per bottle. I think that really says a lot.”

 

It must be pointed out, however, that not all the news coming out of the wine world is rosy. The wine-auction market actually fell by 2 percent between 2014 and 2015. In Hong Kong, the market dropped by 4 percent (to $98.2 million), while in London it tumbled by a more dramatic 15 percent. But New York picked up the slack, as sales were robust, leading to a substantial 27 percent gain for the year.

 

                                   

A Panel of Wine Experts Weighs in On What to Expect Next

 

Ian Dorin, New York Director of Fine Wine, Heritage Auctions, Dallas, Texas

“Fast rising categories are Barolo and Northern Rhone. I think Spain and Napa will actually become hot categories in the next 30-60 months, and that Bordeaux will continue a downward trend.”

 

Marc Smoler, Marketing Manager of Hart Davis Hart in Chicago, Illinois

“We expect to see a resurgence of mature Bordeaux. We’re excited that many of the top Chateaux, including non first-growths like Cos d’Estournel and Montrose, exceeded expectations in our latest sales. Burgundy producers such as Roulot and Coche-Dury are also in high demand.”

 

Jeff Zacharia, president of Zachys Wine Auctions in New York

“Provenance is king. In September 2015, we auctioned the final offering from Graham Lyons in Hong Kong. The star of the sale was provenance. Nearly all 315 lots were traced back to their point of purchase, thanks to Mr. Lyons’ meticulous note-keeping. Because of this, prices went through the roof, and sales totals went above high estimate. Already we’ve got similar collections lined up for 2016. A bottle of Lafite is easy to come by, but its rarity can only be confirmed with perfect provenance.”

 

John Kapon, CEO of Acker Merrall & Condit in New York

I expect Burgundy will continue to enjoy strong demand. That beautiful part of the world is not increasing in size! I expect there will be steady demand for older vintages of pre-2004 and older Bordeaux, as collectors seek wines to drink from decades past, rather than pay high prices for recent vintages that will be unapproachable for many years. Given, too, the continuing escalation in recent release prices for many California cult wines, I’d expect demand at auction for older vintages of those wines to remain strong. The great reds of Italy continue to grow in collectors’ esteem around the world, as they should, because they are great wines to collect and drink. The same is true of the top Spanish reds. We’ve auctioned some superb Spanish cellars, and collectors know how great those wines are.”

 

Michael J. Moser, a specialist in the Fine Wines Department at Skinner's in Boston

“It appears that 2016 will be slightly down, coming off the highs of recent years. Port seems to be the category on the rise after decades of being the wine market’s also-ran. And, importantly, its rise seems to be driven by the youthful bidders.”

 

Doug Davidson of Bonhams' Fine Wines Department in San Francisco

“I’m a strong believer in collecting wine that you love. It’s hard to know what will happen to the market, but if your cellar is filled with what you love to drink, you’ll always be a winner.”

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