How to Buy a Vineyard Written by Louis Horta Viticulturist

The first and foremost thing to consider when venturing into a vineyard is the long vs. short-term aspect of the investment model. Historically, beginning with the Phoenicians and subsequently the Romans, vineyards were the impetus for establishing communities throughout the Mediterranean Rim and Western Europe. When the migrating Phoenicians and conquering Romans, needed to pick up and move on to new frontiers, they would leave enclaves of families behind tending vineyards that take years to develop and become productive. The families left behind inevitably raised new generations of children that felt at home in such localities, thence becoming permanently settled communities. In more recent times, the Conquistadors followed suit in California: The Padres first order of business was to establish a series of twenty-one missions from Mexico to the Oregon border (1st in order, Mission San Diego in 1769), and simultaneously plant a mother vineyard to produce sacramental wines, and provide plant material for future vineyards. Although today, vineyards are regularly bought and sold throughout wine regions of the world, the long-term holding of vineyards still has a much higher financial appeal than a short term for a quick return. Some REIT portfolios have holding terms benchmarked at a minimum of seven to ten years, and even that could be considered short-term for a vineyard investment.

 

Once you have established your investment model, the next step to consider is the choice of Appellation: Appellations are demarcated winegrowing areas, with a perceived level of wine quality and uniqueness of character, and are the basis to determine grape pricing per ton, and the general value of vineyard land. So, how does one put a price tag on a vineyard? The value of land can differ significantly from appellation to appellation, and so can the value of fruit and wines, vary radically as well. Fundamentally speaking, the price of a vineyard should be based on historical and projected financial data dictated by market conditions, but unfortunately, there are myriads of other factors that may come into play, when assessing the value of a specific vineyard: The age of the vines and producing life remaining, must certainly, be given some consideration; one should not be paying full value for vines in an aging vineyard that will need to be replanted in a few years time. However, it is important to note that, not all, old vineyards, need immediate replanting: There are some old Zinfandel vineyards in California producing great wines, and remarkably, the vines still have enough energy left to continue producing quality fruit for decades to come. Having said that, oftentimes, aging vineyards are located in highly coveted nooks for ultra-premium wines, and may present an opportunity to develop a new state-of-the-art vineyard model, and create a unique, and valuable, piece of terroir, that may result in a much higher quality wine than the existing vines, or even neighboring vineyards. So, the variables can be numerous and will present some decision-making challenges.

 

Winemakers are becoming increasingly sophisticated, and aware, of the importance of terroir in the sculpting of premium wines. It has often been said that wine, can only be as good as the grapes it was made from, and to a certain extent, that is very true, but without a skillful winemaker, grapes from a great vineyard, may not result in the best possible product; so, we must assent that, the winemaker, however skillful, he or she may be, must be included as an integral component of terroir. With its roots in the French word terrain, in winemaking, terroir means much more than alluding to a simple plot of land, where grapes are grown for the production of wine. Although several books have been written on the subject, it is still hard to find a clear definition of the popular (and often misused) oenological term. The following is a short dissertation on terroir, from which we hope to impart the essence of what the term represents:

 

In a nutshell, the terroir (tear’wahr) can be described as everything in a site-specific vineyard, from soil to the finished product in the bottle. When all components are fine-tuned, and harmoniously contributing attributes, that collectively, result in a superior product, it then, may be defined as a quintessential set of conditions comprising soil, mesoclimate, light exposure, and cultural practices, in which a phenologically adapted grape variety will express unique fruit-derived characteristics, that when skillfully extracted, can be found in a wine from a particular vineyard, or vineyard block, and perhaps even an entire appellation. Louis Cyril Horta 06-01-04

 

The objectives of a vineyard model, must begin with the value of land, cost to develop, and targeted quality of fruit for a particular market. The location of the land, for the most part, guarantees the climactic virtues of the appellation but does not assure that the vineyard model is correct for the site. Thus, one could be buying a vineyard in a highly reputable viticultural area, and not attain optimal results for the particular site. A typical vineyard design must consider the following: Climatic conditions (mesoclimate), type of soil; topography; light exposure; varietal; rootstocks; vine spacing; row orientation; trellising; irrigation; frost and animal protection; cultivating practices, and fruit marketability. While it may appear somewhat simplistic, it can be like the lottery with endless possible combinations from which to draw a winning number, and the same can be said of fine-tuning a vineyard to achieve specific objectives in a particular site. 

 

Finally, you have decided to venture into a vineyard, and if you are not experienced in vineyards, you should, when possible, seek a sales consultant with extensive knowledge of the principles of viticultural science and practices, to provide you with sound viticultural guidance, or as an alternative, hire a vineyard consulting firm to write you a report on specific vineyards, so you can make informed decisions. Obviously, the more informed you are, the greater your chances for a successful viticultural adventure.

 

We're grateful for Louis Horta, Viticulturists' generosity in sharing this article with us and our readers.