Excellent Material Investment with High-Yield Potential
Although Riesling is gaining popularity among wine drinkers, only a few connoisseurs know that a hundred years ago German Riesling was the most expensive wine in the world. From St. Petersburg to New York, Berlin to London, Paris to Vienna, it made a glorious march to all the best restaurants, top auctions and luxurious cruise liners.
Riesling indeed enjoyed the highest reputation worldwide. Before the First World War, there were no important meals served within the European imperial and royal houses or in affluent homes without the exquisite Riesling Kreszenzen. The evidence is well preserved wine menus from the wine cellars of German city halls, whose quality can be compared to the star system of rating restaurants used by gastronomists nowadays. On these wine lists one can find Chateau Latour for eight German marks, which is nowadays rarely quoted below 500 Euro, but the exquisite Spätlesen or Auslesen from Mosel or Rheingau cost 25 German marks—about three times as much.
From today’s perspective, the fact that a first is unthinkable; but even the French connoisseurs placed a premium on German wines! In 1913, the "Carte de Vins" of the Industrial Club of Roubaix had the 1911 Chablis for 2.50 Francs per bottle, but the Piesporter Riesling for 5 Francs, and whoever wanted to indulge in a Bernkasteler Auslese had to pay 7 Francs per bottle—almost 200% more.
However, while the Top Bordeaux wines have increased in price a hundredfold (!) since then, the price of the Top Rieslings has, on average, only doubled since then.
What explains this imbalance?
The Riesling experienced its first image problem because of Germany’s loss in the First World War. With the fantastic 1921 vintage in the background, the German Riesling, along with the red Bordeaux and the white and red Burgundy, all tried hard to reach the top worldwide. Then there were several difficult vintages in the 1930s coupled with the worldwide recession that hit the top wines especially. Finally Germany’s aggression in the Second World War and the resulting devastation after the war ended Riesling's praise as German cultural influence withdrew.
German products had a terrible image worldwide from the scars of the symbolism used during the war and within the country, the maxim became "quantity instead of quality". As a result of the drive toward more, the wine areas in Germany increased from 60,000 to 100,000 ha, while production doubled, meaning the yield were even higher. In practical terms, that meant "machine picking on former potato farmland" that often produced "a thin and sour water" to which the producer would unscrupulously add sugar.
Beyond this, the glycol scandal of the 80´s, which began in Austria, literally put the lid on German Rieslings. Their public reputation was as good as completely destroyed. Only a few unbiased experts knew that, besides the sugared mass productions like "Blue Nun" and other "Liebfrauenmilch," there were still a few Reislings of the highest quality being produced by vintners on the steep slopes of the Mosel region.
These Riesling standard bearers like Joh. Jos. Prüm and Egon Müller were the foundation of the Riesling comeback that occurred at the end of the 80´s. They served as a model for motivated young winegrowers, who were ready to work not like their parents and using chemicals and machines but as their grandparents or even great grandparents once did. In practical terms, this renewed effort meant reducing production in favor of quality through selective hand-picking, and meticulous work and care at the vineyard, often while incorporating methods of organic and biodynamic farming—in short, less mechanical and chemical processing, and more hands-on work and quality control in the vineyard. Along with this came a clean working environment in the wine cellar, with the help of new high-grade steel tanks, which were temperature-controlled. Technology can be a good addition if managed with a purpose of showcasing the terroir rather than manipulating or obliterating it.
This renewed engagement by quality wine makers was favored by an exceptionally long line of good vintages; 1987 was the last really bad, unripe vintage in Germany. Supported by climate change, the next 20 years were harvests where one could only discuss whether it was a good, very good or even an excellent vintage. The climate change brought an almost paradise-like situation for German Riesling growers. Previously, two crop failures per decade was considered normal.
The renaissance of the "old Riesling-quality" was certainly not kept from the wine journalists, especially the famous wine critics of England and the USA. Increasingly, they elected the Riesling the king of the white wines. There is nothing more to be added to articles such as "Riesling Revenge" (Time Magazine) or "Comeback of Riesling" (Newsweek). Riesling became the darling of sommeliers as it paired well with so many challenging dishes and outstripped the Chardonnay in trendy restaurants from New York and San Francisco to London, Hong Kong and Sydney.
While the Chardonnay grows almost anywhere—especially in warm climates—and adapts to every soil like a chameleon, the Riesling resists—it has personality, character and passion. As a child of the cooler climate, it loves long ripening times in minerally-rich, steep areas. It reaches its quality potential only in Germany, the Alsace and in some parts of Austria as well as few outposts in the new world. Therefore, the range of good Rieslings is limited. The Riesling area in Germany consists of about 22,000 ha; in comparison, the French Bordeaux vineyards alone cover an area of about 100,000 ha.
As the top quality Rieslings are limited at present to only three to four dozen producers with track records for good aging potential, one does not need to prophetic to guess the way prices will develop as worldwide demand increases. Despite international efforts to make more quality Riesling, the top Rieslings will only be able to expand marginally as the effort is somewhat of an oxymoron given Riesling's particular thoroughbred nature, and availability will remain limited.
The trend is your friend
Are we dealing with a temporary trend or a lasting one—a trend away from fatty, strongly alcoholic and woody Chardonnays and toward fresh, mineral wines with moderate alcohol content?
The move toward the Riesling is unbroken and has only begun to take place worldwide. This paradigm shift continues to develop; despite a more than doubling of the price (price refers to the selling directly at vineyard) of Rieslings among top producers within the last ten years, the demand for Riesling continues to increase as top Rieslings are still remarkably good values compared to top wines in other regions.
The best examples of this phenomenon are the dry Rieslings from Germany, the so called "Großen Gewächse". In 2003 and 2004, and far into the following year, it was still possible to buy "Große Gewächse" fairly easily. Now, they are completely sold out by the time of their presentation in the fall (harvested one year earlier), at least at the top vineyards. Much of it is already given out in the spring via subscription. No wonder, as truly fantastic quality is offered for still small (but steadily increasing) prices for a new class of German wines that harkens back to some of drier styles made back in the glory years of 1870-1930.
If one draws an analogy between the price of Rieslings and a stock, one recognizes a wonderfully constant increase in its value over the last ten years without any setbacks—and also without erratic and exaggerated leaps upward. The stock chart expert would speak of a very stable and long-lasting upward trend. This increase not only benefits primary the stockholder, as it would a company on the stock exchange; rather, the proceeds go primarily to the producer in the demand for his next vintage and this initiates a spiral of quality to the top as he is able to set a higher price bar. The profit will almost without exceptions be reinvested (e.g., in cellar techniques or new vineyard areas), so that the quality increases even more, which is additionally supported by climate change.
The continuously increasing demand, the attractive prices and the parallel increase in social acceptance (euphoric press, booming cooking and bon-vivant programs on TV etc.) bring the Rieslings to a new generation of enthusiasts who then become first-time Riesling buyers in a market with finite supply. In Geisenheim, the German wine university with a worldwide reputation, every second student does not come from a family of winegrowers - a remarkable development, since until recently nearly 90% of the graduates came from families with wine traditions.
Further general trends that speak for the Riesling:
1. The increase in life expectancy has led to an older population. With advanced age one's interest in exquisite wines and particularly those that age with you increases.
2. For the first time in 2001, the average budget per person among German citizens was higher for wine than for beer.
3. For "Lohas", the new favorite target group of the marketing experts, people who live a "lifestyle of health and sustainability" and who want to do something good for themselves and also for the environment when making purchase decisions, the high quality, noninterventionist winemaking and terroir makes Riesling the perfect drink.
4. The increase of the number of wealthy and extremely wealthy people. According to Merril Lynch, there are approx. 10 m USD millionaires and approx. 100,000 people who have more than 30 m USD cash and stocks (without real estate, art etc.).
5. The classic export markets cannot begin to get enough Riesling by a long shot--in the USA alone, sales increased by 60% in the last three years--and domestic markets are starting to recognize that exceptional wines can be purchased for bargain prices.
6. The new markets of Russia, China, Brazil and India, with about 3 billion people total, are slowly but surely becoming interested in Rieslings, while production remains relatively small.
7. No other kind of wine, with so many different ripeness levels, can be better combined with such a wide range of meals. Top international restaurants are increasingly gracing their wine menus with Riesling.
8. In 2004, the most important wine critic of the world, Robert Parker (Maryland/ USA), strengthened his team with the famous Riesling expert David Schildknecht. Since David´s addition, the Riesling enjoys much higher esteem in Parker´s magazine "Wine Advocate," which strongly influences the wine world.
Secondary market still at a starting point
Please consider that the mentioned price increases refer primarily to wines sold directly from the vineyard. A much higher price increase of 100%--and at the top even 1000% or more--can be reached at secondary markets (e.g., rare object markets and auctions). (See the price development of the best Grand Crus from Bordeaux and Burgundy.)
However, the secondary market for Riesling is only beginning on the international level, signaling the biggest price increases of the rare Gewächse for leading winegrowers are yet to occur. This "secondary market" can grow slowly, as the best Rieslings ripen in fifty to a hundred years and therefore survive whole generations.
Which Rieslings of certain producers should one buy?
3 Legends
Egon Müller, Mosel (Saar)
J. J. Prüm, Mosel
Dönnhoff, Nahe
Additional famous top producers
Dr. Loosen, Mosel
Fritz Haag, Mosel
Reinhold Haart, Mosel
Willi Schäfer, Mosel
Schäfer-Fröhlich, Nahe
Schloßgut Diel, Nahe
Emrich-Schönleber, Nahe
Robert Weil, Rheingau
Schloß Johannisberg, Rheingau
Müller-Catoir, Pfalz
Klaus Keller, Rheinhessen
Newcomer and secret discoveries with high potential
A. J. Adam, Mosel
St. Urbans-Hof, Mosel
Van Volxem, Mosel (Saar)
Vollenweider, Mosel
Kruger-Rumpf, Nahe
Gutsverwaltung Niederhausen
Schloßböckelheim, Nahe
Spreitzer, Rheingau
Josef Leitz, Rheingau
Wittmann, Rheinhessen
Kühling-Gillot, Rheinhessen
Conclusion:
Within the context of the great overall wine boom, the Riesling still stands at the beginning, at least from the perspective of price development, although demand has been increasing for years. In recent years, the top winegrowers succeeded in at least partly countering the rising demand with managed higher production. Since 2006, this is no longer physically possible without sacrificing quality. Therefore, this vintage and also the excellent 2007 vintage were in extremely short supply from the beginning--accordingly, with clear price increases.
To potentially make money from Rieslings, you should purchase wines exclusively from the very best winegrowers. Concentrate on edelsüße/sweet Rieslings (with a rating of Spätlese and up), especially Goldkapsel and auction wines and the dry "Großen Gewächse". In addition, the limited and hand-signed vintage assortments/ collection boxes from the best winegrowers and vintages are very interesting.
However, please do not forget to drink some of your purchased bottles, because it is worth it and what the wine was truly meant for especially when fully mature. The quality of the German Riesling (and also of some white and red Burgundy and Bordeaux) is excellent, in any case far too good to only sell it for profit.
Michael B. Spreckelmeyer with Justin Christoph
Michael Spreckelmeyer
Born 1969 in the USA, raised in Germany, South Africa and the USA. More than 16 years experience as an independent entrepreneur. Since 1998, has worked in Venture Capital and Corporate Finance industry. Michael Spreckelmeyer has in this time received more than 2,500 business plans and business ideas and has accompanied transactions in the value of several 100 m Euro.
Several publications as "Praxishandbuch Unternehmensbeteiligung" and "Der Businessplan" (Top 10 Financial Times economical books ranking) with Prof. Dr. Jörg H. Ottersbach.
Spreckelmeyer is CEO of Lust4Wine (www.lust4wine.de), the biggest wine-depot in Düsseldorf, founder of BWCI (Business and Wine Club International) and publisher of the wine magazine "Der Weinentdecker".
In addition, he is the owner of the biggest rare Riesling collections (until the year 1893) of the world and president of the Riesling brotherhood Rheinland.
Because of his passion for rare wines and the close contact to the leading wine auction houses in the world, he was chosen as the organizer of the special show "Wein als Geldanlage" at the IAM (international investment trade show) in 2008.
For further questions you can reach Mr. Spreckelmeyer via email: spreckelmeyer@gmail.com
Justin Christoph is a US based Riesling lover and 10 year veteran of the international wine auction circuit. His website is http://www.rieslingac.com and can be reached at justinchristoph@yahoo.com
