One of the most remarkable and valuable features of wine and most other alcoholic beverages, is the investment value-enhancing effect age has on them.
Time is, of course, the essence that increases the value of most high status items. The market law simply states that value increases in inverse proportion to the scale of availability. Stocks of any product reduce with time, through consumption and wear and tear, and consequently demand increases for steadily declining supply. And prices go right along with it.
This is as true of wine and spirits as it is of books and silverware. But with drinks there is the added quality that age delivers to the product. They simply taste better with age. In the case of spirits, this is manufactured quality. Their producers usually age them in oak casks which, as process, improves their aromatic and flavour qualities. Spirits gain nothing more in qualitative terms after they are bottled, so their escalation in value is due entirely to consumption. But unlike most other investment items, the point with drink is just that – drink it, enjoy it, and while you are at it, accelerate its declining supply.
Wine is different because most of its qualitative improvement happens in the bottle, and while resting quietly in private cellars. This makes provenance an important consideration in both acquiring and retaining quality and value. Poor storage can turn the most famously wonderful wines into mere vinegar, especially in the ‘buyer beware’ environment of the auction house, where most privately matured wine is aged.
The process of improving drink quality through age is simple one. In the case of spirits, it is basically matter of softening the harsh distillate through the natural process of oxidation, which is possible because wooden (oak) barrels are porous, allowing moderate exchange of air, which gently and slowly makes the spirit more soft and suave textured.
The process of aging is much less oxidative for wine. It needs no air other than what is trapped inside at the point of bottling. Oxidative processes are encouraged at the winery. Wines intended for long bottle age are usually given time in small oak barrels so that their progress can be carefully controlled.
What happens after this, and part of what happens in spirit barrel, is slow breakdown of certain compounds within the drink. The breaking down creates mass of new compounds which become ‘details’ of aroma and taste that enhance the ultimate drinking experience, making it more complex and sophisticated.
The mechanism involved is simple. Humans can only smell molecules of certain size. And smell, by the way, influences 90 percent of our sense of taste. If the molecules are too big, we don’t even know they are there. In the changes during aging, larger molecules break down into smaller ones. This process not only delivers slightly different characters, but also allows us to detect them.
This aging characteristic of wines becomes an extra opportunity for investors with an inclination to sensuality. Not only do you need to taste, or drink, to evaluate the progress of your investment, but there is more potential for extra added value when the wine becomes both more rare and tastes lot better.
Rare and fabulous experience is something real to trade in while indulging yourself along the way. There is, of course, the added bonus that poor financial investment retains its drinkability, which ultimately is what it was for anyway.
Keith Stewart is well-known New Zealand wine writer and art critic.
