First 1/2 of 2009 - Port buying strategy

[Roy Hersh]

Given the state of the world's economy, the possibility of an impending vintage declaration and low retail prices ...

Do you foresee investing in Port over the next six months while prices remain low?

I realize it is not a time when everybody has spare discretionary income to play with, so what is going to be your strategy?

[David Spriggs]

I am primarily buying in the UK where the exchange rate makes Port much more reasonable. I am primarily planning on buying 1994 releases at retail. I also plan to buy at auction in the US and UK, primarily 1970 and earlier, but possibly some 2000's. As for buying the 2007 releases, I might buy some, but I'm at the age where it is very unlikely that I will be drinking these when they are mature.
-Dave-

[Brian C.]

Roy,

Have you ever seen a significant drop in prices paid for vintage port in previous economic downturns? What kind of corrections have you seen in the past, if any? I think the current economic downturn could be pretty severe and could last awhile, so I will be interested to see how prices hold up.

[David Spriggs]

Have you ever seen a significant drop in prices paid for vintage port in previous economic downturns?

I did back in the early 1990s. Huge amounts of Port was dumped and sold for a song. I bought a lot of 1977 Warre's ($19) and 1985 Graham's ($24).
-Dave-

[Glenn E.]

My buying strategy at this point is driven more by storage space (or more precisely, lack thereof) than by economics.

I will certainly keep an eye out for bargains, and any really good ones that I see I will pounce on, but for the most part I'll only be buying to replace consumption. I just don't have much room left for more long-term storage.

[Michael M.]

... I bought a lot of 1977 Warre's ($19) and 1985 Graham's ($24).
-Dave-

That must have been the good times.

[Roy Hersh]

Glenn,

While prices are low during this downturn and the opportunity to find some fabulous bargains on old bottles exists for a moment during this bubble ... why not rent space at a place like Seattle Wine Storage. Get all your young bottles together and put them in storage to age perfectly and inexpensively until you decide to either build a small cellar or obtain more on-site temperature controlled units? It is not all that costly. It will also allow you to keep your hands off the young one.

I did this back in Virginia before moving here and actually had my Ports (and wines) flown to WA state ... directly to SWS back in 1996, where they remained until I bought this house in 2000 and immediately had a wine cellar built in one of my downstairs storage rooms. From 1992-about 2001 ... I rarely if ever drank any Vintage Ports under 20 years old. That all changed when I started FTLOP because I needed to have young TNs too. I have also become more open minded about drinking younger Ports because of that. However, there is nothing like drinking just older bottles ... when you have a mature cellar.

[Roy Hersh]

Brian,

I started drinking Port around 1982 (first time) and in earnest in 1984 (damn, it is now 25 years ... or 27, depending on how I look at it) when working in a NYC fine dining restaurant that used to keep 1963 Sandeman on a Cruvinet system, but had other greats bottles on the wine list too. Every time the had wine buyer/Somm would open a bottle of Port in the restaurant he'd come get me to be there to try a splash.

So I missed the actual buying opportunities of the early 1980s when prices were really silly cheap. In the financial good times of the late 1980s when I was buying some of my earlier bottles, prices were still very reasonable to put it mildly ... although everything then, was still relative. So it did not appear as inexpensive then as it does now, looking in the rear view mirror.

By the time of the economic downfall under Bush Sr. during the first Iraqi invasion ... (amazing how things repeat themselves ) Port pricing really came down quite a bit and stayed low for years. I bought at least half of all the bottles I own today ... between 1991-1995. Those were the good old days for me and many Port buyers like David who were already investing in our future Port drinking, at a time when 1977 Smith Woodhouse and Gould Campbell were $25 and the 1983 ... actually all 1983s just about, were $19. There was a FULL three year period where you could find 1977 Fonseca which was the only 100 pt. VP easy to find at that time ... at $49 and that price held from 1992 until the early part of 1995. I bought multiple cases of 1970 and 1977 Taylor and Fonseca back then for under $50 and enjoyed drinking them early and often. 1977 Warres @ $29 was my "house VP" for a few years ... meaning that they were almost always open in my house for anybody who came over to hang out. They were sold at that price in No. VA like water with huge stacks of cases available. It was a beautiful time to be a Port buyer. I was between marriages and with lots of disposable income, a great girlfriend who LOVED Port and Ch. Musar, and working 70 hours a week ... with no time to spend money on anything else except Port and great vacations. I look back fondly on those times.

What changed?

The cigar craze of 1995. The USA went crazy for cigars all of a sudden. Port emerged as one of the great beverages for pairing with Port. Voila ... instant market change. Around this time, Bartholomew Broadbent was heading up the Port sales division of Premium Port Wines in CA for the Symington Family. He was young, ambitious, aggressive and smart. He worked his butt off and got Port flowing across the USA like never before to fuel the cigar crazed Port buyers who during the uptick during the junk bond and hi-tech boom of the mid-late 1990s saw "the good times roll" and money flow. I was not buying much Port during this period, because prices were stupid. The same $49 bottle of 1977 Fonseca was now $199-$219. Hard to believe that escalation ... and there were lots of people who had bought just a few years earlier that were selling as fast as they could and quadrupling (or more) there money! Fortunately, cigars died off, junk bond guys like Miliken went to jail and the hi-tech bubble burst HARD. I live near Microsoft, Amazon.com, RealNetworks and many others here that were skyrockets, that virtually imploded or at least slowed down dramatically. Amazon rebounded quickly.

Anyway, I see this 2 year time warp that we are about to enter ... because I don't think we've really seen more than the tip of the iceberg of price reductions (no less unemployment/job losses and business failures and housing lost to foreclosure) as a huge buying window for Port lovers who are young and have liquidity on their side. Because there is nothing worse than seeing price roll backs and not being able to take advantage of them. I have little doubt that on the other side of this window of opportunity, we'll see another economic boon time ... it always has happened that way in the past, so as warehouses deplete inventories purchased when the Euro was 1.60 just a few months ago (up until Sept. actually) they will be buying wine and Port at much lower replacement costs ... just because of the de-valuation of money. Add to that the terrible economy and you have the makings of great Port pricing coming your way.

For those just getting into seriously creating a foundation for their future drinking pleasure, this spells opPORTunity big time. Enjoy it while it lasts and don't miss the next year to two.

[Brian C.]

Thanks for that comprehensive history, Roy. I look forward to some accumulation over the next few years.

[Michael M.]

According to my experience there has always been good buying opportunities during the last 2 or 3 years, even in Continental Europe. Perhaps not so spectacular as the aforementioned ones, but pleasant as
2000, 2003 Niepoort VP under 50 EUR, 1994 Graham's VP 50 EUR, 1991 Croft VP 38 EUR, 1995 Fonseca Guimaraens VP 25 EUR, Ferreira Duque 32 EUR, 1997 Ferreira VP 19,50 EUR, 2003 Vesuvio VP 45 EUR and so on. All bottles from reliable sources.

[Erik Wiechers]

Michael M wrote:

2003 Vesuvio VP 45 EUR

True, even lower. This morning i bought it at only € 36 ! With shipping from Germany its € 44
Even in the Netherlands the cheapest bottle according to Winesearcher is € 60

Too bad they only had 1 bottle left.

[Anders]

In Denmark the Vesuvio 2003 cost about 70 Eur. in a wineshop

My strategy in 2009 is buy buy buy.... the price is going down down down, on the wine auction. :)

[Nikolaj Winther]

Sadly, I don't have enough money to justify a grand thing as a "strategy". More likely, it'll be tactical decisions (cash or creditcard) or operational port buys (Online or physical shop).

I've seen some resonable offers, such as Rozes VP 1999 (decent but nothing spectacular) at just under usd 20. But the big boys, such as Taylors, Fonseca, Noval etc. are way WAY out of my price range - and also very hard to come by in Denmark.

But perhaps some Colheitas and traditional LBV's (Colheitas are my favourite anyway, and I don't know if they are very sensetive to economic downturns).

[Moses Botbol]

Falling port prices is a double edged sword to the collector, but I am waiting for the price drops and will take advantage of what I can.