Asia is now such a powerfully driving force in the marketplace for fine wine, that American collectors have lately been forced to bid bid in Hong Kong for the wines they they really want.  Which means that more and more rare fine wine is on the move (and therefore vulnerable), both from Europe and California to Hong Kong, then back to the U.S. when (or if) those American collectors score the winning bid.

That’s just one of the insights that you might glean from our latest interview, which comes to us from an area of the wine world that, like some kind of mysterious dark matter, is seldom-if-ever-seen but exerts a potentially huge influence on the universe of wine wine world.  This strange influencer? The world of fine wine collection and investment.

Few people know how to navigate this mysterious world as well as today’s interview guest: Katja Zigerlig, who is AVP of Fine Arts, Wine and Jewelry Insurance for the Private Client Group division of Chartis. In her role, she oversees the strategic growth of the “private collections” insurance portfolio for Private Client Group.  Much of her time is spent advising those clients on shipping wine around the world, inventory management and proper cellar management – exposing her to what are likely some of the largest and most expensive private wine collections on Earth.

Ms. Zigerlig has almost two decades of professional experience in the world of collectible art and wine. Prior to joining Private Client Group in 2004, she insured private art and wine collections, museums, galleries and exhibitions for AXA Art Insurance Company. She has a B.A. and M.A. in art history, specializing in twentieth century art (Dude’s personal favorite period), but her experience with fine wine comes via viticulture study at UCLA, and extensively touring Napa and Sonoma wineries. Ms. Zigerlig has gone on to teach courses on wine collecting, and you can find her quoted in recent CNBC and New York Times articles on art and wine collecting.

Ms. Zigerlig is also a good sport, as you’ll soon see in her answers to some of the more colorful questions that I posed to her (you know me… can’t take me anywhere, really…), and she has a thing or two to tell you about protecting your own budding collections.

Anyway, enjoy this rare glimpse into the world of rare wines!…

1WD: Tell our readers a bit about who you are and what you do.  What’s a typical day like in the life of someone who has to keep close tabs on wine collections?

Katja Zigerlig: Wine is one of the “collectibles” that I focus on, in addition to art and jewelry. I spend a lot of my time educating the public, collectors, wealth advisors and even wine consultants on the importance of insurance as an asset preservation strategy. I also work closely with my colleagues to review the latest inventory management software, review transit protocols for wine shipments from one location to another and follow the trends in the wine market that affect our clients — from wine prices to wine fraud.

1WD: Do you have any formal experience with wine, or have you had to learn things ‘on the fly’ during your work for Chartis?

KZ: I’ve been drinking wine since the age of 14 (having European parents they felt very strongly about weaning me off milk as soon as possible). For the academic education, I handled Napa and Sonoma as my business territory and took wine classes at UCLA. But drinking and enjoying wine is the easy part. The learning curve has to do more with understanding how susceptible wine is to damage and how we can best help our clients avoid loss. The best security systems for wine cellars, how to stop mold growth in cellars and finding the best way to transport wine from Bordeaux to Denver is what I’ve dealt with in my work life.

1WD: How obnoxiously large and expensive are the wine collections that you’re dealing with on a regular basis?  Is there an average size and worth that you typically see in the collections for your clients?

KZ: Can having a lot of good wine ever be obnoxious? Seriously though, our smallest collection is about $10,000 and our largest is over $20 million. Yet both small and large collections are vulnerable to the same perils, so we are interested in how the wine is stored, the security, the temperature control system in the cellar, among other factors.

1WD: Do you ever worry that your clients are rich and powerful enough that if you advised them incorrectly about their collections, they could afford to have you ‘taken out’ by a group of Ninja assassins?

KZ: Actually, the ninjas worry me less than the fact that most collectors actually don’t insure their wines. So the advice that is most often ignored is the recommendation to insure a wine collection. As for the hazards of my occupation, I have excellent kidnap and ransom coverage.

1WD: Do you see any trends in the brands or types of wines that are being purchased by your clients?  Do they seem to purchase certain wines more than others?  Or is it a mix and more dependent on the client’s preferences?  In other words, do see more wine collecting for investment, more for future enjoyment, or both?

KZ: From our vantage point we see how the wine is being insured after purchase, so I’m less privy to our clients’ drinking habits. I can tell you that 93% of our collectors insure their wine with what we call a “blanket” policy. This provides over-arching protection over the entire collection — including wine stored at various locations, such as a home cellar, a wine storage facility and any other “non-home site.”  Blanket coverage has a maximum limit per bottle, say $5,000. It’s a simple and effective way to provide coverage for a fluctuating inventory. The other coverage option is “scheduled,” where individual bottles are identified and distinctly valued on the policy. Many collectors investing in long term holds on Bordeaux and Burgundy wines in particular will schedule their wines, because they do not intend to drink them for years.

1WD: We hear a lot about collectors in Asia driving up wine prices, especially for en premiere first-growth Bordeaux. Are you seeing the same trends?  Do you expect more or less price elevation in the future from the Asian demand?

KZ: The biggest impact appears to be on certain vintages and labels that are highly coveted in the Chinese market. There is also the impact of American collectors having to bid in Hong Kong for wines they want — that brings increased transit exposure as those wine need to be shipped from HK back to the States.

1WD: What would it cost for me to insure my prized collection of RUSH concert t-shirts with you?

KZ: I might consider your t-shirts as long as we get your wine collection as well. Be sure to submit proof of value for those t-shirts.

1WD: What up-and-coming trends do you see developing in the wine world and wine market today?

KZ: There are a few trends that have an impact on our collectors:

• The internationalization of the wine market supports the long term investment potential, as more people get into the hobby of wine connoisseurship on a global level. Keeping updated inventory lists is a key factor in ascertaining value — especially for bottles that have gone up in value dramatically at auction in the past year.

• From a risk perspective, more wine is on the move, which means more exposure to damage. At Chartis, one of the services we offer clients is a transit protocol — offering to advice on the best ways to send and minimize that transit risk.

• Third, we pay very careful attention to the weather. Most wine is stored in a cellar or basement. The heavy storms that recently hit the East Coast, for example, can lead to flooding in the home and damage the wine. There are precautions collectors can take to minimize the risk of damage (example: keep bottles at least 8” off the ground), but this is always a concern. Similarly, power outages that result from intense storms can be especially harmful to collectors in the summer or for those who reside in humid climates.

1WD: Most of our readers are not wealthy – in fact, they are nearly the opposite of wealthy (I can tell this because I know that many of them are blogging and therefore cannot really be making a lot of money…).  If they were seeking to purchase and store a wine for investment, what advice would you give to them?

KZ: Many people assume they have coverage for their wine under their renter’s or homeowner’s contents coverage. Yet most insurance policies have exclusions for “fragile items, perishable goods, and food items.” Wine can fall under all three of those categories. So as your readers are perusing their next auction catalog, I recommend they consider getting protection for their beloved assets. A good wine insurance policy should cover major catastrophic events (flood, hurricane, windstorms, fire, and earthquake) as well as theft, breakage and loss from malfunctioning cooling equipment. Your readers should speak with an independent insurance advisor to get quotes and information on all the coverage options available to them.

Cheers!

(images: courtesy of flatironcomm.com)

In other words, it’s like super wine crack for me.

I’ve decided not to rate any of the wines I tasted at PNV, because a) you’re unlikely to find them, and b) we are talking some of the best-of-the-best in CA winemaking here, and the scores on my cheesy A-F scale for are in the A- to A+ range for all of these wines; there’s no real point in sharing those subtle shades of differing scores, now is there?  I mean, I’m not getting into a 94 vs 96 points discussion, thankyouverymuch.

Anyway, following are some of my favorites among a field of very, very impeccably made wines (in PNV auction lot order):

• Keenan (008) – “Grand Classique” 2008 Cabernet - Not what one would expect from a competition of muscular New World reds; it’s lovely, with an abundance of violets on the nose; like you passed out in a field of violets after a night of drinking Napa Cabs…
• Hestan Vineyards (009) 2007 Stephanie Selection - 80% Malbec – Just screaming good, a nuanced black & brambly beauty.
• Duckhorn Vineyards (018) – 2008 Three Palms Vineyard Cabernet - In a room full of wines with supple & nuanced tannins, this might have been the most supple in that room.
• Rocca Family Vineyards (040) – 2008 Yountville Cabernet - A healthy dollap of Syrah (all from Grisby Vineyard) give this lot a spicy, peppery edge.
• Cornerstone Cellars (058) – 2008 Howell Mountain Cabernet - Dark & brooding with extremely focused black cherry fruit. 20 yr old vines. Might need 20 years to fully reveal itself!
• 

  Ladera (075) – 2008 Two Mountains Cabernet - fruit sourced from both Howell Mtn. and Lone Canyon (1100 ft) – Supple and very, very pretty.  Steep slopes = elegance?

• Terra Valentine (083) – 2008 Cabernet Franc - A standout due to its unique nose of roses, candied fruit, and a palate full of blue- and huckle-berries.
• PEJU & Sullivan Vineyards (086) – 2008  “P.S. We Love Rutherford” Cabernet - joint lot that delivered a solid punch of baking chocolate &, yes, dusty tannins.
• Schramsberg Vineyards (110) – 1994 reserve Late Disgorged Sparkling Wine – OMG… Like apple bread, if apple bread were made by Valkyries. As my friend Alder Yarrow put it “it showed how amazing American Sparkling wine could be if no expenses were spared…”  It may have been the single greatest expression of wine mastery in the room.
• Trefethen Family Vineyards (123) – 2008 Oak Knoll District Cabernet- Described to me by Hailey Trefethen as an “extreme farming trial.”  I think the question of whether or not Trefethen’s focus is on offering balanced wines has been answered, if this lot offering was any indication; the red & black fruit combo was stunning, with the fruit and spice riding structural elements (acids vs heft, tight vs. supple tannins) so deftly balanced it seemed like some kind of a high-wire act by a fruit supermodel.
• Vineyard 7 & 8 (151) – 2008 “Collaboration” Cabernet - A winning combo of Mountain (Spring Mtn) and valley (Oakville) fruit, expertly blended to combine grace and muscle. The word “wow” appeared in my tasting note (as did “focused red & black cherries, with sweet spice”).
• Faust (152) – 2008 “A Faustian Bargain” Cabernet – I don’t know about being a bargain, but this wine was as dark & gripping as Darth Vader (and I found it about as compelling as the first time that I saw Vader on the big screen)…
• Louis M. Martini (179) – “Premiere 254″ 2008 Cabernet - A handful of the Premiere wines had an abundance of gorgeous floral notes (violets), and this one offered them up in spades.
• Mount Veeder Winery (188) – 2008 Cabernet- Not as tight as a Howell Mountain Cab, the violets and flowers on the nose belie significant tannins with tobacco and enough grip to give this wine a long future.
• Barnett Vineyards (172) – 2008 Cabernet - From Spring Mountain, this wine screamed “Napa” – gorgeous, with lush dark fruit.

Cheers!

1. Symposium Chairperson and Wines & Vines editor Jim Gordon, may, in fact, be the sweetest and most patient person on the planet (there remains one more day of symposium activities in which to properly test this theory).
2. The amount of downtime built into the entire week of Symposium activities is approximately 47 seconds.
3. The amount of raw talent and brain power among the symposium attendees is staggering, but is immediately doubled in terms of IQ points the moment that AbleGrape.com founder, Yahoo search pioneer, and twitter search guru Doug Cook walks into the room.
4. When you read aloud (over a loudspeaker) a tasting note that you’ve written in which you compare a glass of Syrah to an uncomfortable satin thong, you will piss off famed author, wine educator, and television personality Karen MacNeil [ Editor’s note: this was recently substantiated via personal experience. ]
5. Both Eric Asimov and Steve Heimoff are practical, warm and charming in person (meaning that I have lost at least two bets and the week isn’t even over yet).
6. Harlan wines will be poured judiciously at Symposium after-hours gatherings, but only when I am not available that evening to attend any of them.
7. Journalism jobs, freelance writing gigs, and book deals net you more money than Amazon.com affiliate fees. But not much more.
8. If you take the ethical standards of critical writing / wine review writing, combine them in number, double that number, square the result, and divide by 0.0002, you will arrive at roughly the number of ethical violations that I might have inadvertently committed.  Before lunch. On day one.
9. When Alder Yarrow uses the term “folks at our level” and you realize that he is talking about wine blog writing and is including you, you have to suppress the urge of performing a double-head-fake and then blushing.
10. If you are serious about wine writing, then you should get serious about attending the Symposium in 2011.

Cheers!

In an attempt to expand the reach of the event beyond the walls of the Waldorf Astoria, VINO 2010 appointed James Rodewald, former Drinks Editor of Gourmet magazine, as its official blogger representative.  James will be tweeting live from the event as well as covering the event on the official blog (which contains a blogroll of the bloggers who are attending VINO 2010) – all steps in the right direction.

What really convinced me, though, are the panelists for the session on Blogging, which include friends of mine who I know for a fact understand the power of blogging in the wine world – namely, Alder Yarrow of Vinography.com and Steve Raye from Brand Action Team. 

And what sold me lock, stock, and wine barrel was this: for the panel on social media and blogging, the details will be covered live via the web and James will be taking questions for the panel via twitter:

“On Thursday, February 4th at 10AM – the "VIRTUAL VINO, MILLENNIALS, AND SOCIAL MEDIA DECANTED" panel discussion moderated by Anthony Dias Blue with Alder Yarrow (vinography.com), Dave Cook (Twitter), Steve Raye (Brand Action Team), and Ronn Wiegand. James will be monitoring the Twitter feed and posing questions Tweeted in from throughout the country. The seminar will focus on social media and wine bloggers as the future of consumer wine education, and potentially the wine trade.  You and your readers can tune in to the panel discussion at www.italianmade.com/vino2010.”

Now, if the on-line wine community excels at anything, it’s keeping people honest.  So I expect a pretty balanced and honest discussion about wine blogging and social media for that panel.

Whew… ok, I feel better now…

Cheers!

This week, Law.com and Courthouse News Service reported the news that Napa Valley producer Coppola (owned of course by famed producer and director Francis Ford Coppola) is suing cork and bottle manufacturer Vinocor USA, alleging that Vinocor is responsible for ruining 55,000 cases of the Coppola wines.

Yes, 55,000 cases (nearly 700K bottles of wine).  That’s a lot of vinegar!

Apparently Coppola’s company Francis Ford Coppola Presents paid Vinocor nearly $700K to produce some funky-looking bottles with over-sized screwcap enclosures to help promote their “Encyclopedia” line of wines.  But it looks likenot all went to plan, as Coppola is claiming the substandard quality of the Vinocor products resulted in the oxidation of all 55,000 cases bottled of Encyclopedia.

The Horror…

That’s certainly the largest amount of wine I’ve ever heard of being ruined by a screwcap enclosure.  The allegation is not against screwcaps in general, of course – it’s that the Vinocor screwcaps were allegedly flawed, having issues with their threading and didn’t create a proper seal to protect the wine.

Will this lawsuit cause a setback in the adoption of screwcaps?

I doubt it – certainly some top-notch wines are well bought into the stelvin enclosures, including New Zealand’s Kim Crawford and California’s Bonny Doon.  Properly-made screwcaps seem more than capable of properly aging a wine, at least when it comes to medium-term storage.  Whether they will help a wine last 20+ years is more debatable question, but theoretically there’s no reason why they couldn’t.

Got a stance on screwcaps, wine-related lawsuits, or Coppola movie quotes?  Shout `em out in the comments!

Cheers!

Meet the New Boss

Same as the Old Boss

- Pete Townshend, Won’t Get Fooled Again

I get a lot of wine samples (and no, I have not yet properly pimped out my wine storage to accommodate them all).  I know that many of you (because you’ve told me) hate it when I say that, because supposedly this is some sort of wonderful problem to have.  However, that position is based on two assumptions that generally are totally wrong:

1. The wine samples are primarily for my enjoyment.
2. The wine samples are primarily very good wine (or, alternatively, the wine samples primary purpose is to keep me intoxicated).

The fact of the matter is that neither are true (the samples are for evaluation and most of them are not ‘knock-yer-socks-off’ good), so I don’t buy the argument that I’m a dick for discussing issues I might have with keeping up with wine samples (I could buy alternative arguments for why I’m a dick, however).  I’m not going to complain if a winery producing limited amounts of excellent wine sends me a sample or two, because I know that most of you (because you told me) want me to write about those wines.  But, in reflection of the wine market in general, those ‘special’ wines reflect maybe 2% of the samples sent to me.

I’m telling you this because, if my sample profile is any indication, the wine market is focusing on budget/value, and targeting the general wine consumer using low price points.  Common sense would suggest that, in this time of economic meltdown challenge, the focus on producing budget wine is a logical new development in the wine market.

Logical conclusion, but wrong…

it’s wrong because it’s not new.

The wine market has been driven by the common-denominator quality level (in terms of being affordable to the ‘working class’) for centuries – it just gets more attention when the chips are down.  The nice thing about the wine industry now vs. 250 years ago is that the quality of the common-denominator level has never been as good, which suggests that the industry will weather this economic storm and be stronger for it in the long run.

There have been few really surprising developments for wine as a result of the global recession, actually.  One of them is that Bordeaux finally realized that it needs promotion and engagement with on-line social networking. But that’s for budget Bordeaux – if the big boys of the Left and Right bank participate in that, I’ll eat my hat.

You can cite numerous examples of wine industry developments in response to the recent economic downturn that seem extreme, but only in comparison to the high-flying `90s; when you compare them to hundreds of years of wine history, your reaction would be less “OMG!” and more “yaaaaaaawwwwwwwwnnnnnnnnnnnn.”

By way of example, let’s take a look at 90+ Cellars. 

Here’s the skinny on what 90+ is all about, taken directly from their website:

“We are taking advantage of the current economic conditions and purchasing high quality and highly rated finished wines direct from wineries at a discount and passing the savings on to our customers. Our primary selection criteria for wine opportunities is not just price and availability – the wines we purchase must have a pedigree of 90 or higher ratings, best buy or gold medal accolades from major publications.  Other companies that offer this concept are usually buying the winery’s excess or distressed wine that they cannot sell on their own for pennies on the dollar. We are buying the winery’s best and most highly rated finished wine, which they would normally sell under their own label. Wineries are willing to sell to us because they either produced more than they need or sales may have slowed down. The wineries in return are promised complete anonymity, which we take very seriously.”

In summary: buy juice from wineries that they can’t sell and rebrand it so that those producers don’t lose face (a.k.a., lower prices).

A novel idea? maybe when applied to wine. But what does it tell us about the wine industry? That the producers are greedy and don’t want to lower their prices?  Not really.

It tells us that producers think the issues plaguing the wine industry due to the current economic situation are temporary.

And if you check into your wine history, you’d probably come to the same conclusion.

Cheers!

(images: timeinc.net)