Purchase by the barrel at Destiny Bay
Destiny Bay (tastings) is a Waiheke wine producer specialising in the luxury wine market. They produce three red wines relying on a carefully selected north-facing vineyard and rigorous selection process to guarantee top quality. Production is limited to about 1,800 cases but can drop to less than half that figure in small vintages. China, where affluent buyers appreciate luxury goods and Bordeaux-style red wine, is an important market for Destiny Bay.
Anyone who agrees to buy six or more bottles of Destiny Bay wine annually becomes a “patron”. Patrons receive substantial discounts. The flagship wine, Magna Praemia (tastings), for example, has a current RRP of $355 but the patron’s price is $195. RRP for their mid-label Mystae (tastings) is $165 but patrons pay a more modest $85. Their least expensive wine, Destinae (tastings) drops from $125 to $60 on the patron’s price list.
During a winery tour, a valued Chinese customer pointed to a barrel of wine and asked Destiny Bay’s director of global distribution, Brett Taylor, how much to buy the whole barrel. Never one to let a chance go by, Brett calculated the number of bottles in a barrel (300), multiplied that by the patron’s price per bottle and quoted a figure, which was quickly accepted.
That sale led to Destiny Bay’s Barrel Investment Opportunity, a cleverly conceived process that gives their more affluent patrons the chance to buy limited edition wines at favourable prices and possibly to resell them at a profit.
It works like this. A few months after vintage, when the wine is in barrel and after it has been blended and classified, a certain amount of wine is allocated for patrons, retail and trade sales. The rest is then available for barrel investment.
Barrel buyers pay the equivalent of patron bottle price for the 270-bottle barrel. In the case of Magna Praemia that works out to $58,500, a barrel of Mystae costs $25,500 and one of Destinae is $18,000.
Barrel buyers have to wait another 2-3 years before the wine is bottled and released. Then they can either collect their wine or pay a fee for all or part of it to be stored under temperature-controlled conditions at Destiny Bay. Barrel buyers receive:
The signed empty barrel (or signed barrel head if they prefer)
- Private tastings at Destiny Bay and dinners with the winemaker
- Priority purchasing on future barrels
- Storage of their bottled wine
- Access to the secondary market if they wish to sell their bottled wine at a profit.
Brett explained that many patrons want to buy bottle-aged wine of vintages that are no longer available. The Barrel Investment Opportunity allows him to approach barrel buyers to purchase past vintages for other customers who want mature wine.
As an example, Brett said that the 2007 Magna Praemia, which is no longer available, would have had a barrel price of $44,550 ($165 per bottle). Last year Brett sold some 2007 Magna Praemia for $550 a bottle and believes he can now get as much as $900 per bottle.
“Demand for our wine is rising fast as our reputation grows but supply is constrained at least through 2021. As such we expect prices to continue rising.”
Destiny Bay is now selling barrels of wine from the 2015 vintage. They only have four barrels of Destinae, three barrels of Mystae and two barrels of Magna Praemia remaining for sale.
Brett Taylor believes this programme is a big reason for their steady growth in sales over the past two years.
“This has not only helped protect brand positioning but also has enabled our patrons to participate in value growth.”