With the release of arguably the finest vintage of Kanonkop Pinotage to date, we highlight the wine’s price performance of previous vintages and associated returns on investment. South Africa has…

Kanonkop investment opportunity

With the release of arguably the finest vintage of Kanonkop Pinotage to date, we highlight the wine’s price performance of previous vintages and associated returns on investment. South Africa has a very small, albeit scattered, secondary or investment market. Wine Cellar has, however, recently seen tremendous progress in the maturing of the market. Firstly, recent vintages of sought-after wines have radically jumped in price with increases well above inflation. Secondly, there is a palpable demand for back vintages and mature wines from the blue-chip properties are quickly snapped up.

Kanonkop graph 2001-2014

– Based on Winecellar.co.za sales data
– Compound annual growth rate (CAGR) for all vintages – 12.48%
– Compound annual growth rate (CAGR) for exceptional vintages – 14.01% (2001, 2003, 2005, 2009, 2012, 2013)

Storage:

Wine Cellar only sells vintage wines from known, trusted sources. Either direct from the property, from our wealth of private customers who store with Wine Cellar, or from highly regarded private cellars.

Analysis:

  • The 2015 release at R300 will be, by far, the cheapest vintage in the market and shows tremendous opportunity for growth, especially with the farm release price at R350 in March 2017.
  • As yet unrated, high ratings will dramatically increase the demand for this wine.
  • Pinotage is starting to show signs of increased international reputation and Kanonkop undoubtedly leads the field.
  • The release price of Kanonkop Pinotage has increased on average 7% per annum since 2003. Kanonkop Pinotage can, therefore, be considered a good inflation hedge.
  • Top vintages of Kanonkop show more favourable investment with higher demand and, therefore, prices.
  • Young vintages show high returns mainly due to the release of new vintages at higher prices; the previous vintages automatically jump in price with the release of the new vintage. Brokerage commission will impact returns on young vintages more than mature vintages.
  • Vintages 2001 – 2005 are mature wines and, therefore, offer the highest returns. The rarity of vintages older than 10 years radically drives up resale prices.

Liquidity:

  • Wine Cellar currently purchases and brokers fine vintage wines. We offer investment advice but do not guarantee liquidity or particular returns.
  • We believe that the secondary market for South African wine is growing; more transparent, more liquid and less expensive trading will be available in the near future.

For more information or queries regarding wine investment, please contact Roland@winecellar.co.za.

 

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