California wines, and particularly California Cabernet, could be the smart investment for collectors, writes Ella Lister. But which are the best to go for? And will it last?

According to Wine Owners, Californian wines – predominantly California Cabernet and a majority from from Napa Valley – have risen by 33% on average, over the past 3 years to May 2015 – compared to a mostly flat Bordeaux and a 24% rise for Burgundy(See chart 1, above.)

California’s position could be strengthened further by winemakers declaring that California Cabernet 2013 is better than 2012.

Mark Andrew, senior buyer at Roberson Wines, told Ella Lister in the Decanter 2015 California supplement, that ‘California has the most exciting wineries in the world’, which is why Roberson had been specialising in them for three years.

Californian wines are also benefitting from several years of subdued investment in Bordeaux – albeit Bordeaux has shown signs of recovery in 2015.  The average bottle of California wine auctioned at Sotheby’s is £214, less than the equivalent bottle of Bordeaux.

How to pick the best for investment?

Andrews’ advice would be to split your investment wisely. His ideal California portfolio would be 70% blue chip, such as Ridge, Kistler Vineyards, Diamond Creek and Kongsgaard.  The other 30 can then go on producers experimenting with other varieties, including Arnot-Roberts and Hirsch Vineyards.

Picking the new ventures of more established vintners is another way to get a good return. Michael Jessens, CEO of Wally’s Auctions, advised ‘Established names are always the safest bet’.

Uncertain future

However, others  have warned that California could face a similar slump to Bordeaux in the future.

Whilst Screaming Eagle’s Cabernet Sauvignon has tripled in price since 2007, with average vintages worth more than £20,000 a case, experts can’t guarantee it will continue in this way. (See chart 2).

Screaming Eagle chart, California wines

The rise in price of Screaming Eagle wines since 2007

‘I’m sceptical as to how much more upside there is on Screaming Eagle,’ Andrew told Lister. ‘How many more 100-point scores can it have?’

 

Ella Lister’s full article appeared in the Decanter 2015 California supplement, with the September issue. Subscribe to Decanter magazine here.