Have South African wines reached collectable status?

South African wines are undoubtedly world class, but ahead of the Cape Fine and Rare Wine Auction, Adam Lechmere asks if it's time for people to start investing in the Cape’s best bottles

Words by Adam Lechmere

Simonsberg mountain near Stellenbosch overlooking lake
The Simonsberg mountain near Stellenbosch, home to the country's best-known wine estates

For the past few years, South Africa has been consolidating its reputation as one of the world’s most exciting wine regions. The wines coming out of the Cape, from big, long-established producers like Kanonkop and Klein Constantia to artisan operators crushing less than a thousand tons per harvest, are routinely described in superlative terms. “Often sheer bliss in a bottle…dazzling,” said wine writer Neal Martin in his latest report, adding that many winemakers are producing wines that compare with the top echelons of Bordeaux and Burgundy – “and that’s no hyperbole.”

Scores in the high 90s are regularly handed out by the major critics – Kanonkop’s Paul Sauer 2015 has just been awarded 100 points by Tim Atkin MW – and the country’s most celebrated winemakers, like Eben Sadie, or Matt Day at Klein Constantia, and the many artisan winemakers who constitute South Africa’s new wave, are becoming figures of international stature.

There is a burgeoning secondary market for South African wine. The online trading platform Liv-ex reports an increase in trading activity, and while the site’s Justin Gibbs cautions that it’s “too early to draw any strong conclusions from the data”, the live auction market is surging. In July last year, the auctioneer Strauss & Co sold a three-decade vertical of Kanonkop’s Paul Sauer Cabernet Sauvignon for a record R546,240 (£27,385). Last month at Strauss, Eben Sadie’s Columella 2009 realised R3,713 (£186) per bottle, among other high hammer prices.

South African wine producer Kanonkop
The view over the Kanonkop estate, one of the Cape's long-established winemakers, named IWSC Outstanding Wine Producer of the Year in 2019

Next month, South Africa’s most important wine sale, the Cape Fine and Rare Wine Auction, will be offering some fascinating old wines from the 1960s, 1970s and 1980s such as Zonnebloem Cabernet Sauvignon 1961 and 1980, Nederburg Wines Private Bin R103 Cabernet Shiraz 1980, as well as sought-after bottles from stellar vintages. A star lot will be a half bottle (375ml) of Grand Constance 1821 from Groot Constantia, with a reserve price of R100,000 (£5000) – a wine described by South African critic Michael Fridjhon as “Extraordinarily perfumed… a haunting reminder of an era lost in the mists of antiquity.”

The auction is a treasure trove of South African excellence. Cathy van Zyl MW, one of the South African experts responsible for putting together the lots, lists dozens of names, from Lismore to Kershaw, Mullineux and Sadie, that come loaded with plaudits from top international critics. “These are industry legends that tell part of the South African story,” she says.

But just how important South African wine is as an investment is a question on many collectors’ minds. While most observers agree that the list of collectable wines is growing by the day, those that offer investment potential are far fewer.

“We would describe many of the top South African wines as very collectible but not very investible,” Matthew O’Connell, head of investment at London merchant Bordeaux Index told Club Oenologique. Despite “exciting and ambitious winemaking” and excellent quality, “for the most part the wines lack the reputation, track record and market performance to be considered as suitable for serious investment portfolios.”

There is a growing number of producers which are collectable but that doesn’t mean they are good investments

Another London merchant specialising in South Africa, Greg Sherwood MW of Handford Wines, notes the “subtle but hugely important distinction” between collectable and investable. “There is a growing number of producers which are collectable but that doesn’t mean they are good investments.”

He namechecks Stars in the Dark Syrah from Minimalist Wines in Elim in the Southern Cape, which Martin has just given 97/100 points, as a classic example. “It’s a new collectable: an amazing wine made by a young, clever guy [Sam Lambson]. If you had a case and kept it, it would be worth a lot more when you came to sell. But it’s not something you can build a portfolio around.”

Some might argue this is nitpicking: if a wine is rare and in demand surely it must be a good investment? But for Mike Ratcliffe, founder of the renowned Vilafonté, the fact that much of South Africa’s stellar reputation is based on artisan winemakers producing wines in minuscule quantities is what is holding it back.

Mike Ratcliffe founder of Stellenbosch's Vilafonte in South Africa
Founder of Stellenbosch's Vilafonté, Mike Ratcliffe (left); and a bottle of the estate's Series M 2003 vintage (right)
South African wine Vilafonte Series M 2003 wine

“Too many great South African wines sell out in one day so there’s nothing in the pipeline,” Ratcliffe says. “Significance of production is the factor that leads to collectability – and that is the weak link in South Africa with regard to the creation of truly collectable wines. There just isn’t enough of it made.” The solution is for producers to “take ownership of their inventory and hold wine back” – at Vilafonté they typically keep 20% of any given vintage – so that they can release tranches of matured wines into the secondary market.

There are others with similar ambitions. Matt Day, winemaker at Klein Constantia, aims to lift South African Sauvignon Blanc to the heights it reaches in the Loire. “We can’t believe that there’s no one else in the world, apart from Sancerre and Pouilly-Fumé, actually putting emphasis into pure Sauvignon Blanc. We’re pushing the boundaries as much as we can to compete with the likes of [great Sancerre producers] Dagueneau and Pascal Jolivet.”

Day is confident that his Sauvignon Blancs – the best of which already have an international reputation – will be eminently collectable. As for investable wines, he says there are really only two, Vin de Constance and Paul Sauer, that show serious investment potential. He also warns against those producers who try to create collectables by simply putting a hefty price tag on the wine and calling it a South African icon. “You have to build your reputation.”

Kanonkop Paul Sauer 2009
Experts consider Kanonkop's Paul Sauer to be one of a handful of collectable South African wines

For the moment, South Africa looks like an excellent proving ground for collectors – and potential investors – looking to diversify their portfolio, or to fill holes in their cellars, without huge risk but also without the prospect of making a fortune. A key attraction is that, compared to northern hemisphere wines of similar stature, they are very good value: take Kanonkop’s Paul Sauer from the excellent 2009 vintage, which retails for around £50 a bottle.

Sherwood lists a dozen or so wines that he considers investable: Paul Sauer 2015 – whose 100 points from Atkin has had a “halo effect” on other vintages; the Old Vine series of the Sadie Family – particularly Skurfberg and Pofadder – and Columella; Thelema Rabelais; Vin de Constance and Anwilka from Klein Constantia; Porseleinberg; Meerlust Rubicon; Vilafonté; Le Riche; MR de Compostella.

Vin de Constance is now sold through the Place de Bordeaux, meaning it can tap into Bordeaux negociants’ worldwide networks.

Ask any wine lover about the future of South Africa and they will tell you it is poised for greatness. It has an honourable and ancient winemaking history (the first vines were planted at Constantia in 1685); it produces wines of great character and longevity from wonderful terroirs. And it is developing, as Ratcliffe says, “at breakneck pace”.

“A few years ago there were only a handful of wines that could be called truly collectable, and now there are 10 to 20. Things are moving in the right direction.”

Cape Fine and Rare Wine auction will be hosted at Rupert Museum, Stellenbosch on 22 May. Find out further info and regiser at capefinerarewine.auction