2011 Port Futures

[John F. Newman]

I don't know what others think, but the prices of the 2011 VP has bothered me since I saw the first bottle.

My question is whether this was a 2011 VP port bubble and will prices go down, or will they maintain or go up in the next couple of years. For purposes of this conversation, let's limit the buying period on 2011 VP to Dec. 31, 2015.

Additional commentary welcome.... and I hope I set up the poll correctly.

[Miguel Simoes]

Love the topic!

[Jeff G.]

I believe that you're going to miss the boat on the 2011s if you let them slide.

The last "comparable" vintage that got as high ratings across the board was 1994.

Even so

the 2011s have higher critic scores than most.

Vesuvio 98 pts
Dow 99 pts
Croft 96 pts
Taylor/Fonseca 97-99 pts depending who you're reading

Take a weaker vintage like 1997, and yes those ports are trading near release. Fonseca 97 can be had for 55$ for example.
I'd seriously doubt you can find any high scoring 94's at or near release price. Most of them have seen a 1.5-3x increase.

There's potentially a chance that the Dow/Vesuvio might be considered in the top 10 WOTY for wine spectators of 2014 (but that's pure speculation).

As such,

I do know that alot of 2011 ports have been sold out at the bigger retailers. The smaller shops got allocated at most 1-2 cases.

[Eric Menchen]

I'd seriously doubt you can find any high scoring 94's at or near release price. Most of them have seen a 1.5-3x increase.

What were the release prices?

Here's what I've paid for some 1994s in the last 5 years:
Burmester: $34 (retail)
Fonseca: $98 (auction)
Martinez: $32 (retail)
Niepoort: $55 (retail)
Quinta do Passadouro: $20 (auction)
Quinta do Vesuvio: $65 (retail), $65, $63, and $38 (auction)
Rozes: $23 (auction)
Smith Woodhouse: $70 (retail), $34, $46 (auction), and magnum $100 (auction)
Taylor: $115 (auction)

I'm guessing the Taylor and Fonseca might be above release prices adjusted for inflation, and they were highly rated. Some of those others weren't so highly rated, but a few were steals at those prices IMHO. Of course the retail buys weren't straight from the lodges at this point in time.

The US CPI gives inflation from 1996->2013 as 49.23%.

[Miguel Simoes]

Seems to me that prices are already going down. Got 4 x Cockburn for $50 already, feels a good deal below what was initially being offered. Someone seems to be wanting to get rid of theirs asap.

Not sure what your sense is, but in my circles, people seem to not care much at all for Port. They like the idea of it, but very few care enough to buy/drink any. And this whole business of decanting Port, and having to do so well ahead of time, is just too much for most people to get over.

My sense is that in decades past, perhaps because Scotch/Bordeaux were less ubiquitous, Port played a bigger role in people's buying (Scotch isnt cellared, but does take the role of Port when it comes to choosing something to drink).

As that plays out, demand for Port may actually come down and prices should keep from going up strongly.

These 2011 may be great, but in 5-15 years time, my sense is that people will rather be buying a F 1985 or F/T 1994 than any 2011, or else they'll be buying new releases. Just like these days no one seems to care for the 2000-2003s (tell me about it!), but demand is decent for Port from the 70s (some at prices that likely trail inflation since release)...

[Jeff G.]

I'd seriously doubt you can find any high scoring 94's at or near release price. Most of them have seen a 1.5-3x increase.

What were the release prices?

Here's what I've paid for some 1994s in the last 5 years:
Burmester: $34 (retail)
Fonseca: $98 (auction)
Martinez: $32 (retail)
Niepoort: $55 (retail)
Quinta do Passadouro: $20 (auction)
Quinta do Vesuvio: $65 (retail), $65, $63, and $38 (auction)
Rozes: $23 (auction)
Smith Woodhouse: $70 (retail), $34, $46 (auction), and magnum $100 (auction)
Taylor: $115 (auction)

I'm guessing the Taylor and Fonseca might be above release prices adjusted for inflation, and they were highly rated. Some of those others weren't so highly rated, but a few were steals at those prices IMHO. Of course the retail buys weren't straight from the lodges at this point in time.

The US CPI gives inflation from 1996->2013 as 49.23%.

i have a price sticker on my fonseca and taylor 94s. both of them were 38$ on release.

[Jeff G.]

Seems to me that prices are already going down. Got 4 x Cockburn for $50 already, feels a good deal below what was initially being offered. Someone seems to be wanting to get rid of theirs asap.

Not sure what your sense is, but in my circles, people seem to not care much at all for Port. They like the idea of it, but very few care enough to buy/drink any. And this whole business of decanting Port, and having to do so well ahead of time, is just too much for most people to get over.

My sense is that in decades past, perhaps because Scotch/Bordeaux were less ubiquitous, Port played a bigger role in people's buying (Scotch isnt cellared, but does take the role of Port when it comes to choosing something to drink).

As that plays out, demand for Port may actually come down and prices should keep from going up strongly.

These 2011 may be great, but in 5-15 years time, my sense is that people will rather be buying a F 1985 or F/T 1994 than any 2011, or else they'll be buying new releases. Just like these days no one seems to care for the 2000-2003s (tell me about it!), but demand is decent for Port from the 70s (some at prices that likely trail inflation since release)...

cockburn didn't get the 98-99 pter.

[Moses Botbol]

Here's what I've paid for some 1994s in the last 5 years:
Burmester: $34 (retail)
Fonseca: $98 (auction)
Martinez: $32 (retail)
Niepoort: $55 (retail)
Quinta do Passadouro: $20 (auction)
Quinta do Vesuvio: $65 (retail), $65, $63, and $38 (auction)
Rozes: $23 (auction)
Smith Woodhouse: $70 (retail), $34, $46 (auction), and magnum $100 (auction)
Taylor: $115 (auction)

'94 Martinez for $34??? I would've bought all in sight. That Niepoort is hard to find and sounds like a great price to boot. It's hard for me to warm up to 2011's with so much '80-95 on the market at equal prices.

[Miguel Simoes]

cockburn didn't get the 98-99 pter.

Fair. Though we havent seen Roy's scores yet

True that the two/three big names/scores may hold their value, but maybe not even those will beat inflation.

Of the other 60+ bottlings, plenty will have scores nearly as high and there should be more than enough out there in a few years time for all of us to buy and drink without having to commit the $$ now...

[Eric Menchen]

'94 Martinez for $34??? I would've bought all in sight. That Niepoort is hard to find and sounds like a great price to boot. It's hard for me to warm up to 2011's with so much '80-95 on the market at equal prices.

The Martinez was an e-mail offer from European Wine Resource, pre-arrival. I bought a 6'er and wished I had bought more.

I'm buying 2011 for the provenance, not the price.

[Eric Menchen]

Here's a fun example of data that can found at wine-searcher.com, a website I highly recommend

taylor_2000.jpg (26.37 KiB) Viewed 1623 times

taylor_2003.jpg (25.77 KiB) Viewed 1623 times

taylor_2007.jpg (23.16 KiB) Viewed 1623 times

[John F. Newman]

Eric, that is a pretty neat series of charts. Unfortunately, the charts only go back to January 2007 so we can't see what the first two years were like for older vintages when they were first marketed. The 2007 Taylor has an immediate increase in value, but seems to have stayed pretty flat since.

There are 2 other issues (at least) that seem to rear their heads: (1) that of provenance brought up by Eric - which has its own value; and (2) putting provenance aside, the costs associated with storage and how that affects the issue.

But these issues get away from the two-year topic completely.

[Eric Menchen]

Eric, that is a pretty neat series of charts. Unfortunately, the charts only go back to January 2007 so we can't see what the first two years were like for older vintages when they were first marketed. The 2007 Taylor has an immediate increase in value, but seems to have stayed pretty flat since.

Yes, I wish there was more there, but I don't think wine-searcher has the data. winebid.com also has some data, but I think it is more variable and less indicative of the overall market. And also, I don't think it goes that far back either. I think one of the big auction houses, HDH, tracks a collection of wines and has data further back, but it is more like a CPI, a conglomerate price for a basket.

My theory for the initial increase of 2007 Taylor is that is more an effect of the product coming to market as opposed to the price actually increasing. The first time it shows up on a listing that wine-searcher will catch is when someone puts it out there as a pre-release. This isn't necessarily a retail store, but some place like TCWC that offers a reasonable price ($60-80). Of course there might be a pre-release sale at Zachy's, which I find isn't usually a reasonable price. Then months later, perhaps a year later, it starts showing up on more and more shelves, which includes a lot more full price retail shelves like my local b&m stores, where the price is more like $80-120.

[Jeff G.]

Eric: yea most likely

Though, from my local shop I picked up the 2000, 03 and 07 for 50$/ piece on release.

Miguel: Inflation is sitting right now at 1.2% I'm pretty sure the price increases of the big 2-3 names will easily beat inflation.
Your statement also begs the question. Is nearly as high the same as something that is really special?

[Miguel Simoes]

Is nearly as high the same as something that is really special?

No, granted not. Nacional, TVVV and so on are really special regardless of how they score.

The point I was looking to make was that there will be plenty of high scorers (e.g., the usual suspects Dow, Graham, Noval, Vesúvio and/or whatever others stand out) for which price won't go out of control and that will be as affordable down the road as they are today, if not more...

Agree w Eric reg buying now to ensure provenance. Wonder about that myself. Do producers release bottles over time at reasonable prices? Or are their bottles usually at a premium to market?

[Jeff G.]

my understanding of the 2011 vintage is that they released all they will so probably not going to future rerelease
but someone can correct me as i'm fuzzy on where i heard this from.

As with the other names you mentioned, I believe dows' was teh biggest production at 5000 cases witht he rest of them going down from there.

i'll leave this post to say that of the names you mentioned none will be available for cheaper 3 years from now. (unless you're buying really $$$ now)

dow is 62$
noval is 79$
Grahams is 75$
taylor is 79$
Fonseca is 79$
Vesuvio is 60$

[Al B.]

I think you're asking two different questions:
(1) Is the 2011 vintage over-priced?
(2) Will bottles of 2011 vintage port be cheaper in 2-3 years?

My opinion is that the answer to (1) is no. Most 2011 ports from the big names have sold through and there is nothing left. You can still find stocks from the smaller, independent producers but you have to look hard to find someone who is importing them or do this yourself. Some of those independent producers have made some absolutely fabulous wines this vintage but just don't have the market presence to be able to find homes for their bottles - I feel sorry for them because the quality of their Port is just stunning. Because sales have pretty much matched up to supply, I don't see the initial release prices as being too high. In fact, for some of the garagiste cuvees I actually think the price was too low - look at the current retail price of Stone Terraces, Capela, VVV and Nacional and compare those to the first release prices.

But I do think there will be an opportunity to buy 2011 ports for less money in the next 2-12 years. Pure supply / demand economics says that when sellers are forced to dispose of wines over the next few years with only a limited number of buyers, the price will have to be less than it is today. I have all the 2011 I want but I might be tempted to buy more if someone offered me another case of Graham at half the original price. Offer it to me at the price I paid originally and I will likely pass. It is a perfectly sensible strategy to buy opportunistically 2-12 years after initial release. The benefits of doing so are that you will likely be able to get better prices than you could on release. You will have to buy selectively, taking care only to buy where you are confident on the provenance of the wine; you'll probably also have to do more work looking for the wines you want at the price you want. You might find it harder to get the wines which receive higher scores from the critics but you'll certainly find parcels over the next few years of just about everything. I suspect that the only wines which will be tough to find at the right price will be those garagiste cuvees. Overall, you're probably trading cost (including storage fees) for convenience. If you have the time and are prepared to do the legwork to hunt out good parcels of wine at the right price over the next decade or two, you will have a good chance of buying the same wines as someone buying on release but for perhaps a 20-50% discount in total cost. Probably...

I also took a look at what I paid for the handful of 2007 ports I bought on release in 2009. That's about as close as I can get to trying to predict how I might expect 2011 port prices to be in 2-3 years time. Interesting results:

Graham - paid £32 - inflation adjusted = £36.62 - add storage = £39.62 - current retail £38 - current auction estimate £30.50 = approx 23% discount
Noval - paid £33 - inflation adjusted = £37.76 - add storage = £40.76 - current retail £45 - current auction £36 = approx 12% discount
Vesuvio - paid £30 - inflation adjusted = £34.30 - add storage = £37.30 - current retail £43.33 - current auction £34.66 = approx 7% discount
Vesuvio Capela - paid £50 - inflation adjusted = £56.80 - add storage = £59.80 - current retail £100 - current auction £80 = approx 34% premium to buy now and not on release

For inflation I used the movement in the UK Consumer Prices Index; for storage costs I used my current actual storage cost of £0.75 per bottle, per year; for current retail I used WIne Searcher (not pro) low for UK suppliers; for auction I simply used my general guide that I would expect to achieve a 20% discount to retail if I buy at auction.

[Moses Botbol]

Does any have 2011 Nacional for sale in USA?

[Jeff G.]

Does any have 2011 Nacional for sale in USA?

I got offered but passed at 650$/btl presale

it doesn't officially go on sale until december

[Jeff G.]

Graham - paid £32 - inflation adjusted = £36.62 - add storage = £39.62 - current retail £38 - current auction estimate £30.50 = approx 23% discount
Noval - paid £33 - inflation adjusted = £37.76 - add storage = £40.76 - current retail £45 - current auction £36 = approx 12% discount
Vesuvio - paid £30 - inflation adjusted = £34.30 - add storage = £37.30 - current retail £43.33 - current auction £34.66 = approx 7% discount
Vesuvio Capela - paid £50 - inflation adjusted = £56.80 - add storage = £59.80 - current retail £100 - current auction £80 = approx 34% premium to buy now and not on release

For inflation I used the movement in the UK Consumer Prices Index; for storage costs I used my current actual storage cost of £0.75 per bottle, per year; for current retail I used WIne Searcher (not pro) low for UK suppliers; for auction I simply used my general guide that I would expect to achieve a 20% discount to retail if I buy at auction.

assuming you used the 2.2% I think you're overadjusting your inflation by alot.
2009 to 2013 is only 4 years worth of compoudning.
or 1.090946826256.

I believe you're calculating a 3.5% inflation instead.