AS LONG AS YOU HAVE THE SPACE AND RIGHT CONDITIONS, CONSIDER KEEPING YOUR PRECIOUS WINE COLLECTION AT HOME

By Debbie Carlson

No longer do fine-wine collectors need to pay for offsite storage for their bottles. They can easily keep them at home.

Accessibility is a definite benefit to keeping a collection at home, says Jon McDaniel, owner of wine consultancy Second City Soil, and Food & Wine magazine’s 2018 sommelier of the year. “It lets you be in your passion as much as you want to be,” he says. “Life is also spur-of-the-moment sometimes. You may want to open a good bottle because a friend is coming over. Or if you have a bad day, you open a really good bottle of wine because you deserve it.”

As long as the collector has the room and can create the right conditions, people can easily keep their wine nearby. Ron Fiamma, global head of private collections at AIG Private Client Group, says one of their largest clients has spread out his $40 million collection between two big homes using custom-made cellars.

Collectors interested in at-home storage have three options: a passive-cellar method in their basement, a wine refrigerator, or a custom-built wine cellar. No matter the method, to keep wine in prime condition, collectors need to maintain temperatures and humidity at proper levels and avoid light.

The right type of storage may come down to the owner’s reason to collect wine, McDaniel says. People who collect wine for a financial investment may get more questions about how the wine was stored versus someone who collects wine for the love of it. The type of wine in the collection also matters as older wines need more care than younger wines that will be consumed quickly.

“If you’re just getting a lot of wine because you like to drink wine versus ‘I love to lay things down and I want to drink these bottles in 20 years,’ these are very, very different strategies for how you set up your collection,” McDaniel says.

PASSIVE CELLARING

Passive cellars, like wine caves, use no artificial cooling and can be the most cost-effective way to store wine.

Basements can be ideal passive cellars since they are usually dark, can have higher humidity levels and below-ground temperatures typically hover around 55 degrees Fahrenheit year-round in areas like the Midwest and Northeast. “Keep wine under 70 degrees Fahrenheit to prevent aging, ideally keeping it between 45 degrees Fahrenheit and 65 degrees Fahrenheit,” says James Appleton, director of sales, special risk, at MiniCo Insurance Agency.

Rachael Lowe, beverage director for the Levy Restaurant Group, created a passive cellar in her basement where she keeps her “good stuff” with wooden racks her husband built that can hold different size bottles. Hers is located away from the laundry area to avoid vibrations. “Some people believe that vibrations, such as from an A/C unit and other equipment, can disturb sediment, but it hasn’t been scientifically proven,” Appleton points out. Still, he adds, “Significant and frequent vibrations could upset sediment, so keep it to a minimum.”

It’s also a good idea to keep wine safely away from furnaces and areas where vapors or odors are possible, as wine can absorb these through corks and this can affect the taste. Keep bottles off the floor to minimize flooding and water-leak risks. Watch humidity levels as too much can cause mold growth.

Passive cellaring is probably fine for bottles that will be consumed on a regular basis, but collectors may want to think twice about this for long-term storage. Passive cellars lack mechanical climate control, so collectors with an eye on investing should talk to their insurance agent.

Wine can be insured under an all-perils policy, which can cover spoilage due to mechanical breakdown, says Laura Doyle, vice president, collections manager, personal risk services at Chubb Insurance. “Wine could spoil in a passive location and that would not be considered a covered loss if there is no mechanical breakdown,” Doyle says.

WINE REFRIGERATORS

Wine refrigerators are a cost-effective, utilitarian way to store wine long-term, but don’t confuse food refrigerators with ones designed specifically for wine. Food refrigerators maintain a relative humidity of 10 percent to 15 percent, while wine refrigerators keep humidity between 50 percent and 60 percent so corks don’t shrink, says Stephen Weiner, sales manager at high-end appliance store Abt Electronics.

Wine fridges can be as small as 12-bottle countertop units. Undercounter units hold about 46 bottles while tall units can hold 360 bottles, Weiner says. In addition to maintaining proper temperature and humidity, these units also keep lights at a minimum.

Wine fridges can range in price and quality, with less expensive units likely having a shorter lifespan. For higher-end units, there are a variety of brands available. Among the higher-end brands Abt carries are Sub-Zero and Avintage, which can be customized to be under a kitchen counter or freestanding.

Better units have different temperature zones for different types of wines, charcoal filters to eliminate odors, anti-vibration systems, UV-light protection on glass doors and different shelving to accommodate different-sized bottles.

Higher-end, free-standing units can range in cost from $3,500 for an under-the-counter or a tall fridge to about $8,000 for a built-in unit, Weiner says.

CUSTOM-BUILT CELLARS

Wine collectors may dream of an elegant home wine cellar with a tasting room, but these are serious investments, says Rick Grigsby, owner of Chicago Wine Cellar Expert. “You can certainly do one for five grand, depending on the size, but that’s not what people want,” Grigsby says. “The most cost-effective wine storage is a fridge, but no one says, let me show you my wine refrigerator.”

Evan Goldenberg, owner of Architectural Artistry, says how the wine collector intends to use the space drives the conversation and design of the interior. He says about half of his clients want a utilitarian space, and half want to entertain in the space.

Even small cellars are significant undertakings. They require building permits from local authorities, Goldenberg says, since builders will need access to the mechanical and electrical systems to install climate controls. Insulation, vapor barriers and non-paper-faced drywall are also needed to keep conditions right. That’s before installing elements like LED lights and racking.

Wine collectors who want to put in a cellar, Grigsby says, should budget to spend one-third of the cost to prepare and build the space, one-third for the climate control system and another third on the racking and exterior door. Costs will increase depending on the type of interior wood and door used. Glass doors cost much more than solid wood doors. Goldenberg says his projects take about 12 weeks from start to finish. The all-in costs start at between $400 and $500 a square foot for a utilitarian cellar.

Wine collectors, McDaniel adds, need to remember that custom-built home cellars won’t necessarily add to a home’s resale value. “You’re not getting your money back on something like that. You have to really look at why you’re doing it,” he says. “And it’s a very personal decision.”

AND FINALLY…

Experts recommend no matter the type of storage, make sure it’s secured with a lock to prevent theft. As collections grow, keep an inventory list, whether on paper or a spreadsheet. Fiamma says for valuable wine, consider using radio-frequency identity (RFID) tags to help locate your treasure if a bottle goes missing.

When keeping a collection at home, McDaniel recommends labelling which wines can be consumed at any time and which ones are off-limits, especially if someone else has access to the collection. When McDaniel lived with a partner who never wanted to touch the collection, he says he devised a system of putting green, yellow and red stickers on the neck of each bottle to identify which wines were drinkable at any time and which were off limits.

“By setting those parameters,” McDaniel says, “everyone can enjoy the experience. Wine is supposed to be fun. It’s not supposed to be a point of contention.”

DEBBIE CARLSON is a Chicago freelancer whose work has appeared in Barron’s, U.S. News & World Report and The Wall Street Journal.

Yes, You Can Insure Your Wine

THE BIGGEST MISPERCEPTION PEOPLE HAVE ABOUT WINE INSURANCE IS KNOWING IT’S AVAILABLE

Of all the collectibles we insure, wine is probably the one thing that we tend to see the biggest deficit in, meaning many individuals don’t even consider it,” says Ronald Fiamma, global head of private collections at AIG Private Client Group. “They’re very cognizant of insuring their art and their jewelry, but for a variety reasons, they never even think of the wine collection.”

Like other collectibles, wine insurance is generally an all-perils policy. These policies usually cover most hazards, Fiamma says, including transit, theft, breakage, natural disasters and other accidents.

The most common claims are water damage and spoilage from temperature fluctuations caused by a mechanical breakdown, says Katja Zigerlig, vice president, art, wine and collectibles advisory at Berkley One. Many people store wine in their home basement, where most flooding occurs, while power outages can cause wine refrigerators or climate controls units in custom cellars to quit working.

There are a few rare policy exclusions.

Laura Doyle, vice president, collections manager, personal risk services at Chubb Insurance, says gradual deterioration, such as a bottle being past its peak, isn’t covered. Illegal acts are also not covered. Other losses not covered include rusting, warping, loss due to extremes of temperature, leakage and evaporation, adds James Appleton, director of sales, special risk, at MiniCo Insurance Agency.

Wine insurance experts suggest people who want to insure collections should work with independent specialists who can help value the collection and offer advice about storage and other risk-management protections.

When Zigerlig goes with a Berkley One risk manager to examine a collection, she says she’ll look at factors such as where the bottles are stored. If it’s located in a basement, which is common since that tends to the be cooler area of a home, she’ll check for water-pipe locations or if the wine is held below a bathroom. Berkley One’s risk managers may use a thermographic camera to look for dampness behind walls. Wine collections stored in basements may be exposed to mold, which can grow on natural corks.

When it comes to corks, there are a few other factors to keep in mind, says Appleton. “Unless you live in arid or arctic conditions, corks aren’t likely to dry out,” he says. “Between 50 percent and 80 percent humidity is sufficient. Also, traditionally, bottles are stored on their sides to keep the liquid up against the cork, which theoretically can keep the cork from drying out.”

Because water damage can happen easily in basements, Doyle recommends that owners install water-leak detectors.

Zigerlig also looks at security protocols, including door locks and motion detectors, and if security cameras are pointed to entrances to record who might access the collection. “That’s what I’m thinking about when I visit with clients,” she says.

Policies can include both blanket coverage for the entire collection and schedule coverage that covers individual bottles, experts say. This is where having a detailed inventory list, whether handwritten or on a spreadsheet, is useful.

Blanket coverage is good for bottles that may be consumed more often and don’t require owners calling up agents to report a change in the collection. Schedule bottles are listed individually with prices, such “Opus One, 2012, $5,000.”

All-perils policies usually have no deductibles, and premiums depend on the size of the collection and a few other variables such as geographic location, security protocols and overall maintenance. Fiamma and Doyle say for a collection valued at $100,000, premiums at each of their firms may average between $350 and $600 annually.

Insurers, Fiamma says, mainly focus on the three biggest risks: temperature, humidity control and damage from lights.

For more elaborate collections, insurers may recommend installing backup generators or earthquake mitigation techniques, where appropriate. Insurers are generally agnostic to storage type, he says, noting an under-the-counter wine refrigerator may protect wine as well as a custom-made cellar.

“We just want to make sure that the wine is protected as well as possible,” Fiamma says. “The other stuff is kind of bells and whistles.”

Debbie Carlson

This article appears in the Fall 2020 edition of The Intelligent Collector magazine. Click here to subscribe to the print edition.