In September 2011, at the Shanghai International Commodity Auction Company, a bottle of 1858 Cuvée Léonie Cognac direct from the cellars of Pierre Croizet was hammered down at RMB1 million ($161,000), the highest price ever paid for a bottle of cognac at auction. While record lots are often anomalies, the sale exemplified several key traits of the collectible spirits market, including the availability of fine drinking brandies more than a century old, the importance of provenance in achieving high prices, and the increasing influence of the Asian market. Cognac, however, is not the only spirit gaining collector interest. “Historically, single malt whiskey has performed better,” says Bonhams whiskey expert Martin Green. According to Paris Artcurial wine and spirits expert Laurie Matheson, both of them offer the same advantage for collectors: “They’re not as fragile as wine and therefore easier to store under normal conditions.” Still, those looking to start a collection should consider a few tips from experts before stocking bottles of either potent potable.
COGNAC
HISTORY AND CLASSIFICATION
While cognac is today considered one of France’s luxuries, its history is both international and working-class. Production of brandy began in the 16th century to satisfy demand from Dutch sailors for an alcohol that would survive the long voyage to the East Indies. By happy coincidence, the vineyard surrounding the harbor of La Rochelle in southwest France produced a white wine that was difficult to store but well suited for distillation. Soon the nearby town of Cognac became the center of production. As British trade in the elixir emerged and grew, English merchants created the distinction between cognac’s two most renowned terroirs: Grande Champagne and Petite Champagne (which have nothing to do with the region that produces the effervescent wine). The British also created the cognac age scale, indicating the time spent in barrels: very special (VS) for at least two years, very superior old pale (VSOP) or reserve for at least four years, and XO (extra old) or Napoleon for a minimum of six years.
PRODUCTION
Cognac, like all brandies, is distilled wine. Current production involves a complex network of thousands of vine growers, winemakers, independent distillers, and corporate brands. Although it must be distilled twice and aged for at least two years in barrels, the intricacies involved allow for great variety in methods of production. But all cognacs are the end product of blending. Wines are mixed prior to distillation, and brandies that have been aged one to three years are put up together in casks. Most bottlings contain a combination of young and old spirits. “Only five percent of our production comes from our own vineyard,” says Benoît Fil, cellar master at Martell. For Rémy Martin Louis XIII, some 1,200 different spirits may be used.
COLLECTING
“There are three reasons why people build a collection,” says Michael Ganne, head of Continental wine and spirits at Christie’s: “because you want to drink it; as an investment; or to see thousands of beautiful bottles in your home.” Of course, these motivations are not mutually exclusive, and it would make little sense to put the effort into collecting if you have not developed a taste for the elixir. With age, the palate goes from light fruit (mostly citrus) and flowers to dark notes of prune, chocolate, toffee (sometimes due to the legal addition of caramel), even tobacco. Other factors to be considered when buying for a collection are vintage, brand name, and the style of the bottle. A collector may choose according to various criteria. “You can have every vintage from 1800 to 1900 to resell as a vertical,” Ganne says. “Or you can buy all the bottles of one great vintage, to control its market.”
VINTAGE
Many very old vintages are available, and there are fewer risks in purchasing them compared with old bottles of wine. “Cognac from the 1850s will be perfect, and the alcohol will be less aggressive,” says Ganne. Furthermore, these old bottles are quite affordable. A typical 1830 cognac can be had for around $1,700, and bottles of 1811 can be bought for $2,000. By comparison, a bottle of Château d’Yquem 1811 was sold for £75,000 ($112,000) by the Antique Wine Company in London two years ago. “You don’t have to buy 19th-century cognacs; it’s quite easy to find some early 20th-century bottles for really good prices,” Ganne says. “A 1914 bottle can be bought for €500 to €600” ($600 to $750). For more recent vintages, “Only buy the top market product, with an announced number of bottles produced,” says Matheson, of Artcurial. “You have to have a brand with a quality reputation, not necessarily the best known.”
TOP MAKES
Because cognacs are blends, brands producing larger batches tend to show greater variation with age. Collectors favor less-well-known brands that bottle their spirits in limited editions, thereby guaranteeing a more constant level of quality. “A.E. Dor, Hine, Ragnaud Sabourin, Delamain, Croizet, Lheraud, Monnier, and Gourmel are often featured at our auctions,” says Matheson. Of these, each is distinctive both in taste and in marketing approach. Hine is quite rare with a more elegant, complex, and strict style than that from a familiar trade brand such as Courvoisier. A.E. Dor still produces spirits under its label but also owns very old vintages. Similarly, Croizet still has old bottles, although they decline to say just how many. The maker will sell directly only to those it designates true connoisseurs. The record-setting Cuvée Léonie is said to be available for $157,000. The 1883 and 1889 vintages can be had for $14,000 and $12,000, respectively. These prices are aided by the impeccable provenance of bottles that never left the producer’s cellars.
AND THE OBSCURE
Because brandy holds up over time, bottles have outlived the companies that produced them. “Some companies that have disappeared are still famous,” says Ganne. “If you buy Eschenauer, Pierre Chabanneau, Fromy, Bignon, it’s likely the cognac will be very good.” Saulnier Frères, which stopped producing cognac in the 18th century, is somewhat obscure, yet a Réserve de Saint Amand de Graves 1789 sold for SF27,600 ($29,000) at Christie’s Geneva in November 2012. Provenance can help achieve good prices for some bottles that don’t even have a label. “Last year in London we sold cognac and other spirits from La Tour d’Argent,” Ganne notes. “The bottles were purchased and cellar-stored by the restaurant a very long time ago.” Two 2.5-litre bottles of 1805 grand champagne cognac went for £25,300 ($38,000) each. A vintage alone can be enough to give value to an anonymous bottle. Look for those dating to the time of Napoleon—vintages from 1800 to 1815—with some bottled for the emperor himself carrying markings on the neck to indicate a royal purchase.
DECANTERS
Among a subset of collectors, the beautiful decanters, made by such notable firms as Lalique, Baccarat, Daum, and Sèvres, create value. Retail decanters released in larger editions are considered collectible only after 20 to 30 years of proper storage. Rare examples include those donated by the manufacturers to be purchased at the Part des Anges charity auction, held each September in Cherves-Richemont, near Cognac. Of course, the prices cannot be considered market, but “the quality of the cognacs in the auction is serious,” says Matheson. Among well-known examples is a run produced for Courvoisier of 12,000 bottles serigraphed with seven different images by Erté. The last sets of this 30-year-old edition were released in the U.S. in 2008 for $10,000. Auction prices for the lots vary between $3,000 and $18,000, with a complete series sold by Bonhams in San Francisco on March 9 for $7,735. Rémy Martin created its Louis XIII decanter in 1874, based on the design of a 16th-century metal flask. Erratic auction prices commonly range from $800 to $4,000, depending on the bottling, the oldest being the most expensive. In 2007 the house released a century-old liquor in a special version of the bottle called the Louis XIII Black Pearl. One example from a limited edition fetched $HK190,400 ($25,000) after a bidding war at Bonhams Hong Kong in November 2012, but similar bottles are often purchased at auction for around $7,000.
WHISKEY
HISTORY AND CLASSIFICATION
Scotch whiskey dates back to the 15th century, as evidenced by records of malt being sent to a monk in 1494 for the distillation of “aquavitae.” The first distillery license was granted to the Scotch whiskey industries, including the Macallan and Glenlivet brands, in 1824. “Prior to that date, people were distilling without a license,” says Green, of Bonhams. Despite its world renown, it is a contracting industry. In the 1920s, when numerous distilleries were taken over by Scotland’s United Distillers Company, “around 80 distilleries were closed,” says French retailer Thierry Richard, who seeks the best remaining barrels from these vanished companies and bottles them in very limited editions. Once home to 30 distilleries, Campbeltown, on the Kintyre peninsula in Scotland, now has only three. Scottish production is divided into three main regions, each known for its own style. Speyside, east of Inverness, is the birthplace of Scotch and home to still-famous brands like Glenfiddich and Glenlivet. Scotch from this region is notable for its balanced style, with both peat and fruit and notes of bourbon and sherry. The Lowland, south of Glasgow, offers spirits with a light, round style, while the Highland to the north is associated with more robust whiskeys.
PRODUCTION
The original principle still remains: Grain, most often barley, is fermented in water and the malt is distilled to extract the alcohol, which is then put up in casks to mellow. Although Scotland’s regions are known for just a few general styles, there is great diversity of flavors due to the different qualities of barley; whether or not peat is used and in what proportion to the malt; the purity of the water; and the stills employed. However, the most dramatic differences come from the types of casks, which are often recycled. Barrels imported from Jerez de la Frontera, Spain, that have been used to age sherry can add dark fruit flavors, while American bourbon barrels give vanilla and toffee notes. To preserve the extraordinary complexity derived from these barrels, single-cask bottlings are a common practice for whiskey. Properly stored, whiskey ages only while it’s in the barrel. Unlike wine, the maturation process doesn’t continue after it’s bottled. Thus, a 50-year-old whiskey has spent half a century in a cask.
COLLECTING
Collecting whiskey can be “a bit more complicated than collecting cognac,” Ganne says. “If you really want to understand whiskey, you have to be passionate.” The difficulty stems from the sheer amount of information one needs to gauge the true value of the bottles available for consumption or trade. The distillation date, cask number, aging time, bottle quantity, bottle date, and sometimes the rank number in the bottling determine the final price. David Clelland, who founded 1494ad.com, a consultancy for interested buyers, advises beginners to “start with a single distillery, do your research, attend tastings and events from the distillery wherever you are in the world, and look to buy that distillery’s releases at auction.” After building a solid base, “you can add other distilleries as you discover them and learn more,” he says.
INVESTMENT
“In the 1980s whiskey became a very popular thing to collect, a way of investing money. Whiskey auctions have been very dynamic since,” says Green. Unlike cognac, it’s difficult to find really old whiskeys, and the gap between known retail brands and auction stars is small, according to Ganne. Thus, the collecting strategy is quite clear: Collect well-known brands that are more likely to appreciate and expect returns only over the long term. Product by independent companies is trickier to assess, but time often creates value. An interesting speculation is in “the direction of the distillery-bottled malts, particularly the limited editions,” Green says.
THE MACALLAN
The undisputed top distillery is The Macallan, located in the Highland but understood stylistically to be a Speyside distillery. It is sweet, fruity, and spicy with a high level of alcohol, up to 66 percent. The Macallan team studies the company’s older malts to determine what gives each whiskey its unique flavor. The company taste-tests current and vintage casks and buys old vintages at auction. At the Christie’s Geneva spirits auction in November 2012, a collection of 98 Macallan bottles of malts ranging in age from 29 to 56 years old of the vintages 1937 to 1974, realized $450,000 on a high estimate of $358,000. During a 2007 Christie’s New York sale, a 1926 bottle of Macallan estimated at $20,000 to $30,000 reached $54,000, a price rarely seen except at charity auctions.
AND OTHER TOP BRANDS
Dalmore, in the Highland region, has a rich mouthfeel. An Oculus decanter by Lalique filled with a unique Dalmore blend, was sold for £27,600 ($46,000) at Bonhams Edinburgh in 2009. Glenfarclas of Speyside provides aromas of ripe fruits and spices. One of its auction highlights is a 50-year-old whiskey from1955 that sold for $HK71,400 ($9,000) at Bonhams Hong Kong in late 2012. Another Speyside, Glenfiddich, offers a generally unctuous mouthfeel with fruity and slightly smoked flavors. A Glenfiddich Janet Sheeds Roberts Reserve achieved £46,860 ($70,000) at Bonhams Edinburgh in 2011. Glenlivet, the third of the well-known Speyside distilleries, produces whiskey with the aromas of flowers, citrus fruits, and spices. A bottle of the 1883 vintage, 48 years old, reached £18,750 ($28,000) at Bonhams Edinburgh in 2007. Springbank, one of the last remaining distilleries from the tiny Campbeltown region, creates a powerful whiskey that is both peated and smoked. A 50-year-old bottle fetched £6,875 ($8,951) at a recent Edinburgh sale.