Wine Investment Friday

This newsletter is designed to bridge the gap between trade and the investor. Each week we aim to help investors better understand the nuances of why some cases appreciate and some standstill. We will unpick the characteristics that construct financial potential to help your money work smarter. 


This week we are analysing a case of:

Sine Qua Non, Shakti Grenache – 2014


There are few, if any wine producers quite as unique as the Krankl family. This week we try to wade through the colourful names and cult mythology to see if it is really worth securing this Napa wine.


Beneath the Label: 

Stockholm Syndrome, Dangerous Birds, The Duel and Dirt Vernacular, to name but a few of the outrageous and individual vintage names from Sine Qua Non. This is an estate that has been making a splash since its inception in the early ’90’s. However, beyond the vivid marketing, the wines are superb scoring perfect 100’s with almost every outing. 

Critic Score: 100 Points – Wine Advocate
The Krankl’s are self-proclaimed “Rhone Rangers” and have truly perfected their cultivation and expression of the Syrah and Grenache varietals registering regularly perfect 100 point scores.

Region Rating: Napa – 94R
The region is known for producing near-perfect conditions, in 2014 the valley did not disappoint. 

Drinking Window: 2018 – 2035
The vintages ‘R’ demarkation suggests a fruit-forward wine, one that will be approachable in youth and enjoyed soon after initial ageing. 

Production Volume: Sub 1,000
The handling of every vine and cluster of grapes personally limits the total capacity of the estate but ensures a level and consistency of quality. With only 100’s of these cases made it is extremely rare stuff indeed.

Summary:
This producer is always going to divide those who are willing to embrace and enjoy the unique approach. From those who believe wine should conform and operate within a set of traditional parameters. We must place this cultural argument to one side and purely consider the wines quality vectors. It is unique, rare and registers stunning scores, by all accounts a superb wine both for consumption and investment. 


“Sine Qua Non” translates to “Without Which, Not”.


Money Matters:

Brand Power: 85/100, rank 26th in JF Tobias Brand Power Metric
Like many Napa wines, the estate operated through an exclusive mailing list. This sees the finite production experienced by only a very small number. So while many have read about SQN and seen the crazy names and beautiful artistry on the bottle, few have tried it. 

Liquidity: 20%
A big issue is the lack of conformity. While it has created a distinct brand, buyers do not know which wine they are buying, what format the cases will be and as such it can be very tricky to move.  

Inter-Trade Price Volatility: 8.6%
Pricing this wine for most outside of the trade is all but impossible. There is almost no data, no past sales and no obvious inter-vintage comparison available. 

Price History: 

Summary:
This wine is clearly extremely tricky to assess from a financial perspective. Unlike expensive Burgundy wines, these cases trade almost exclusively privately due to the cult following. While rare Burgundys leave a pricing trail through the market as they are briefly listed and traded. SQN buyers are known to merchants and will hoover up stock immediately. SQN market presence is ethereal, while this is not necessarily a bad thing, it is disconcerting. 


Position for Profit: 

Rather perfectly this wine leaves my opinion, much like this article, totally divided. The quality, the craftsmanship, the uniqueness, the rarity it all screams out as a winner. The cult-like following, the ability to tap into the Napa market and even the relative cheapness of the wine it is all very compelling. The fundamental quality we look for is present in spades.
However, the financial traits of this wine are scary with the lack of data is unnerving to say the least. Even as a member of the trade this wine is difficult to understand and interpret.
But! When push comes to shove, I would roll the dice. Ultimately you will own a 100 point wine of incredible rarity which has an incredible pull with the correct buyer. Just ensure you have the appropriate amount of time and patience for the exit. 

The Author

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Jake Leighton