From the magazine: Rare Sherry

Unlike its great rival, Port, Sherry tends not to attract high prices for rare expressions. Margaret Rand discovers the reason why and asks whether that situation will change.

WHAT DO we want from rare Sherries? You’d think, from a trade point of view, that it would be obvious: greater consumer interest, greater prestige, higher prices. Unfortunately, it’s not that simple. There are a great many rare Sherries about.

There are VOS and VORS Sherries, vintage bottlings, en rama finos and manzanillas, single-cask bottlings, single-vineyard Sherries. Mind you, while ‘single-vineyard’ might look interesting on a label, it’s not especially relevant. The architecture and position of the bodega has more effect on the wine than the vineyard does: the singularity of the cask has far more to say than the singularity of the vineyard, after 30 years or more.

Most Sherry bodegas have ancient casks. González Byass, Valdespino and Lustau can all show wonderful old wines of incredible pungency and complexity, some still used in blends, some mothballed. Maestro Sierra only bottles its old wines to order (by hand, hammering in the corks with a mallet).

Bodegas Tradición was founded 19 years ago to focus only on rare wines, in bottlings of 200-500 units each. Equipo Navazos started hunting down and bottling individual casks 12 years ago and has released a series of extraordinary treasures.

Dancing in front of their eyes, however, are rare Port bottlings. Port is luring the collector’s market with these, and they’re priced in four figures. Rare Sherries usually sell for two- or three-figure sums. However, Barbardillo Versos, at an RRP of £8,000 per bottle, seems to be bucking the trend. Versos throws a new perspective on how rare Sherries can be priced, but not everybody likes it.

PRODUCTION-LED PRICES

Paul Shinnie, Spanish wine buyer for Alliance, says: “When we started with Equipo Navazos we set the price by the cost of the liquid and the cost of bottling, and that was it. We haven’t really shifted from that basic cost in 10 years. It was production-led rather than a systematic review of the market.

“Sherry and Port are quite different. Port has always had a vintage market, and vintage is an investment product; it’s a tradeable item. Sherry is for drinking. You have to look at these wines in the context of being wine. I don’t want to put prices up at all. If you put the price up you restrict the market.”

In the opposite corner is Steve Moody, managing director of Fells, and Mark Symonds, its marketing director. Barbadillo’s Versos 1891 is aimed at people with a great deal of money to spend. “We learnt from the launch of Ne Oublie,” says Moody. Ne Oublie is Graham’s 2014 release of a 1882 Colheita Port; 656 bottles at a mere £4,500 each.

“Before that we had always had expensive rare wines, but this was a step in a different direction. It was uncharted territory, and we were surprised and impressed.”

Just 100 bottles of Versos were released, in the fanciest of packaging, and it’s the whole package, and the story, that consumers are paying for. “We’ve sold 25 so far. We’re releasing very slowly; we don’t want to run out,” says Moody.

Why was it pitched at that particular price? Neither Moody nor Symonds know why, and add that the price was a Barbadillo decision. “Rarity, and what the market will bear,” says Symonds: the decanter is numbered and hand-made, the box is made by the same people who supply Louis Vuitton, the stopper is silver. “It takes it further than malt whisky has ever done,” adds Moody. “It needs those features. But there’s not open-ended scope for these products.”

So has Barbardillo ensured that nobody else can do anything at this level? “If somebody else had been first, this would have been more difficult,” says Symonds. “But if the second one has a stronger story… Graham’s wasn’t first into the rare Port market; Taylor’s was.” There is limit, though, he says. ‘We can’t have 10 to 12 such releases. If there are too many, people become cynical.”

A cynic might argue that only the credulous, or those with just too much cash, would want such a product anyway, given that they can get the equivalent quality of wine in a plain bottle for a fraction of the price. But Symonds hopes that rarity will make Versos increase in value. “It’s finite: it’s a single bottling from one of three barrels, and the family have the remaining two. Only the next generation can bottle again”.

What else is available? González Byass bottles Tio Pepe En Rama once a year, and the splendid Palmas Sherries every autumn. Might there be more? “It’s a matter of time,’ says Martin Skelton of González Byass.

“We see the market coming back, but we need to be confident we can obtain a good price for century-old wines. These Sherries have an emotional value to the family. We don’t want to sell too much too fast: we might kick ourselves in 30 years’ time. I’m not holding my breath.”

The market may indeed be coming back, but one shipper I spoke to was scared off by a prospective price of £400-£500 per bottle for some ‘spectacular’ palo cortado; he’d wanted to put it on the market at £60-£200 per bottle. The wine remains unbottled, indicating that there is a price ceiling.

Barbardillo’s next tier down from Versos, Reliquia, sells at around £900 per bottle, but there are just 30 bottles of each style per year. Andrew Hawes of Mentzendorff reckons up to £100 is OK for Sherry drinkers. And after that price point?

“£100-£150 is the fine-wine market. Over £150? Hmm. It depends how much you’re trying to sell.”

Mentzendorff recently released La Gitana Amontillado Pastrana and 225th Anniversario La Gitana Pasada Pastrana, both single-vineyard expressions; prices are around £35 and £100 respectively. “You do no favours by pitching it too low,” says Hawes. “It must be correctly priced: you have to build demand.”

Eduardo Davis of Bodegas Tradición says: “€2,000 a bottle is not something we would think about. We’re not aiming to make Sherry unreachable. We have some super-rare wines, maybe 500 bottles a year. Collectors would pay a lot for these bottles. But they usually don’t reach the market. They tend to go into the private reserves of restaurant owners and our partners.”

GOOD SERVICE

So in marketing terms, what’s the point of bottling them? “People talk about them, tweet about them, brag about having an 80-year-old Amontillado.

It does a good service for us, for Bodegas Tradición and for Jerez, and for the normal wines. We’re getting good value from them, or we wouldn’t do it, even if it’s only the good value by our partners having a good moment. It’s a way of sharing something that is disappearing little by little.”

He concedes that the company does not make money from these wines. “Sometimes they’re poured by the glass and used as attraction for connoisseurs, but we make more money from the current wines.”

The trouble is that it will take more than a few happy tweets to expand the market for rare Sherry – if that’s what you want to do. VOS and VORS prices haven’t really shifted since the categories were introduced – “people don’t understand them”, says Hawes. “Port has 10-year-old, 20-year-old, or a vintage, and it’s easy.”

The Wine Society, says Mansour, doesn’t use VOS or VORS on its list. Equipo Navazos doesn’t use them. Peter Dauthieu of Viniberia and Ehrmanns says that if VORS is in supermarkets that don’t have the right consumers and the bottles don’t move off the shelf, then the price doesn’t move.

“To see a high-end product gathering dust is bad for the retailer and bad for the product”.

The ‘special jewels’ that Dauthier is releasing – vintage Sherries from Williams, for example (currently 2001, 2003 and 2009) – are “aimed at the fine-wine drinker, which Port never departed from”. How long, then, before rare Sherries can match rare Ports in price? Dauthier says: “We’re not so elitist, not so show-off.” Hawes adds: “We’re moving in the Port direction, though probably not all in one go.

We have to edge Sherry prices up to the correct level, so that it’s properly valued. There’s room to manoeuvre without compromising Sherry’s amazing value. The secondary market is important and needs to be developed; we need to make sure rare Sherries appear at auction.”

John West of Emporia Brands points to travel retail, which helped malt whisky. “Good promotion would pay dividends,” he says. And being properly valued would do Sherry no harm at all.