Why should you build a wine cellar?
Whether you've got space for several hundred bottles or just a few cases, building a cellar is a great way to discover more about wine as you watch your collection grow.
The process requires a bit of patience, but with regular investment over the course of a few years, you'll be regularly drinking wines at their peak and saving money in the process. With the right approach, buying and storing can save you 20-25% on wines that you know you want to drink.
It's not all about the drinking: a well-stocked cellar can end up being a wise investment. In fact, a cleverly managed cellar should pay for itself after 10 to 15 years of fairly consistent purchasing. So if you don't end up drinking everything you buy, sell off the surplus and reap the rewards.
A good cellar reflects a lifetime of memories and discoveries. So whether it's for collecting, for investing, or a mixture of both, you don't need to be a connoisseur to start thinking more about building a cellar.
What types of wine should you buy?
It's all a matter of personal taste. When selecting wines for your cellar, focus first and foremost on the regions and varietals you know and love. It goes without saying, but if you have a passion for Chilean or Italian wine, you shouldn't feel obliged to seek out trophy vintages from Bordeaux and Burgundy. Remember, your cellar should always be a reflection of your own taste. The same goes for varietals. If Cabernet Sauvignon is your thing, stock up on wines from independent producers around the world and keep an eye on how they mature.
While your cellar should be built around the wines you love, the approach is a little different if you're looking to sell on. Consider reserving a small amount of your budget to cherry pick wines that are most likely to grow in value (keep an eye on the Bordeaux, Burgundy and Italy markets in particular). If the ultimate goal is a self-funding cellar, our advice is to buy three cases: two to drink and one to sell.
How to buy wine
Once you've decided which wines to buy, you then need to think about the best ways to get hold of them. There are three main ways to go about filling your cellar. Your first option is to buy 'Duty Paid' on the high street or online. Don't be put off by VAT: if you want to add individual bottles based on recommendations or curiosity, there are some great deals out there.
If you're more serious about getting value from your cellar, try buying 'In Bond'. Deferring taxes (Duty and VAT) until you want the wine at home allows you to keep your options open. With UK Duty rates generally higher than the rest of Europe, and VAT at 20%, acquiring wine in this way is a good way of saving cash. Storage conditions at bonded warehouses are generally excellent, so you don't need to worry about problems of temperature or humidity. The 'In Bond' approach is highly recommended If you're planning to sell on surplus bottles, allowing you to transfer cases without ever having been taxed on your initial purchase.
A final approach would be to buy en primeur, before the wine has been bottled or even before it's been made. This can lead to significant savings on storage, as many wines sold in this way should be ready for drinking by the time they are bottled. While the en primeur approach is certainly more risky than buying on the high street or 'In Bond', it can be the only way to get your hands on some particularly highly sought after wines. If you're looking to sell on, wine futures investment can lead to decent returns. On average you should be looking for savings of around 20% on cases bought en primeur, but beware of the risks! The Honest Grapes approach is to regard wine collecting as an investment in your future drinking pleasure, rather than for capital gain.
How much should you spend?
Thankfully, there are no hard and fast rules on how much you should spend on building your cellar. It all depends on how much wine you drink.
The easiest way to plan your cellar budget is to base it on how much wine you're planning to get through over the course of the year. Set out a clear plan, dividing it by wine type and region, and go from there. Remember: if you take this approach, the first couple of years will require a slightly heavier investment. To get started with this type of collection, we recommend spending £6,000 to £12,000 per year for the first couple of years.
If you're not willing to throw yourself in at the deep end, consider investing in a just few treats for longer term drinking. This approach leaves you a bit more room for spontaneous purchases. Spending around £1,000 per year on a few top quality cases will lead to significant savings in the long term.
How should I store my wine?
If you're looking to build a cellar, making sure that your wine is stored properly should be a major priority. In order for wine to reach its peak, it must be stored in the best possible conditions.
If you're storing at home, consider investing in a home cellar or wine cabinet. Specialists like Eurocave, Sorrels and others offer great solutions for all kinds of budgets.
For those of you who don't have the space at home, professional storage remains a good, stress-free option. Both Duty Paid and bonded warehouses can be costly, but selecting a reputable company might be worth it for the guaranteed storage conditions. Despite the risks, buying en primeur and letting the estate hold on to your wine for as long as possible is a good way of avoiding the hassle associated with storage. We can help you to work out the best option for you and offer cost-effective solutions.
How to sell surplus wine
The wines in your cellar are not guaranteed to gain value as they age, but they may do so, so if you don't plan on drinking everything, it can be a good idea to consider selling on some of your collection. This can be a fairly complicated business, so keeping track of information like provenance, bottle quality, packaging, and storage history is a must. While storing your wine professionally is not essential, it certainly makes the resale process a whole lot easier.
The next step is to put your wine up for sale. Online exchanges are a great place to start, providing you with a solid market value for your collection and putting you in touch with a huge number of potential buyers.
Failing that, at Honest Grapes we're always on the lookout for great wines, so don't hesitate to contact us.
It might take a little bit of patience, and a certain amount of investment, but building a wine cellar isn't as daunting as it first seems. Whether you're collecting wines to drink or to sell on, building a cellar is a hugely interesting way to discover wine.