German wines Dream of vintner’s life clashes with reality

Novice wine-makers discover it’s a risky investment — even in Germany, where vineyards are relatively affordable.
Quelle: dpa
No Berlin tech bros in sight.

Who hasn’t dreamed of chucking the corporate rat race for the bucolic life of a vintner? Emulating a throng of celebrities from Angelina Jolie to soccer legend Franz Beckenbauer, top entrepreneurs such as Rupert Murdoch, the media mogul, or Alibaba CEO Jack Ma have already jumped on the wine-making bandwagon and aren’t looking back.

And so it was only a matter of time until the trend caught on with German execs. What’s more, Germany has a few regions where excellent wines are produced, so for any wannabe winegrower with a few millions to spare, there’s no need to leave the country to fulfill that dream.

Sadly, that goal, at least the idyllic part of it, is just a dream, as a former Continental manager found when he invested in a small winery in the Rheingau to work and run himself.

“I can’t just sit back,” says Robert Wurm, a onetime engineer at Contitech, the auto supplier’s technology unit. “I have to stay on the ball.”

And yet Wurm has come closer to realizing his dream than most of the clients in Natascha Popp’s consulting firm, which caters to career-changers and investors who want to get into the wine business.

“Our clients usually have a very clear idea of what and where they want to buy,” she says. “Usually the reality is somewhat different.”

A steal for €1 million  

Wurm was lucky to snap up a Rheingau vineyard big enough to make it worthwhile, an opportunity that only arises, on average, every seven or eight years. “Instead of Riesling in Rheingau, maybe you should choose a Pinot noir in Rheinhessen,” Popp says to clients by way of alternatives.

There are some 43,000 vineyards in Germany, but the majority are not big enough to satisfy a newcomer. Of the 16,000 bigger wineries, only about half would be suitable for an investor. And out of all those, only about four are sold each year.

Grafik

But German vineyards are bargain basement compared to those in France or Italy. Wineries in the land of Goethe and Schiller may cost as little as €1 million to €3 million ($1.1-$3.4 million), depending on the quality of the land, the condition of the outbuildings and the history of earnings. The buildings can represent 30 to 70 percent of the property value, even though the German real-estate boom of recent years has largely bypassed wineries.

In Italy, by contrast, estates can cost up to €150,000 per hectare (2.5 acres) in the Chianti Classico region, while in Montalcino, prices start at €400,000 a hectare and range up to €700,000. Finding an established label and a working business model seldom costs less than €5 million to €10 million, wine consultants say.

Leading brands, however, tend to be much more expensive. Atlas Investments of Belgium spent a nine-figure sum on the renowned Brunello label Poggio Antico in Tuscany, while US-Colombian entrepreneur Alejandro Santo Domingo paid €200 million for a 20 percent share in the iconic Bordeaux label Chateau Pétrus, valuing it at €1 billion.

Quelle: Weingut Wurm
Former auto exec Robert Wurm has made it.
(Source: Weingut Wurm)

The wine business has changed substantially in recent years. There is more competition and a greater focus on marketing – a sound sales concept, in particular, is vital. Customers are no longer loyal to any certain vineyard, says Popp, a fresh development that longtime practitioners as well as newcomers often underestimate.

An estate with vines does not a winery make

As a result, business can quickly turn sour. “A winery can stop being a lot of fun when there’s no profits,” says Popp.

Even at Germany’s lower prices, it can be hard to find that dream vineyard with a castle-like mansion and a curving gravel driveway through the vineyards. One couple — Dorothee Heimes and Ludger Neuwinger-Heimes, former CFO at auto-parts supplier Freudenberg — lucked out with a historic manor house with a spectacular view over the Saar River.

Some vineyards can be little more than a hilly patch strewn with vines that don’t produce their own wine, but simply grow grapes to deliver to other winemakers. As wine consultant Bettina Kurz warns, “an estate with vineyards is by no means a winery.”

When former Conti manager Wurm acquired Weingut Ottes, a winery near Lorch on a picture-perfect stretch of the Rhine, it comprised six hectares. He added two more hectares, renamed it Weingut Wurm, and decided to till the plot himself with a tractor. He also packs boxes for shipment, conducts tastings, inspects the grapes in the vineyard, and travels as far as Korea looking for customers. In fact, the breadth of activities is one of the things he likes about his new career.

But the engineer has learned that much of what determines the quality of wine is outside his control. It depends on the ground, the grape, the weather – in short, on nature. “Every year is different,” sighs Wurm. Still, he’s happy with his career change: “I’m still having lots of fun.”

Jürgen Röder writes a regular wine column for Handelsblatt. Anne Wiktorin covers real estate investments. Darrell Delamaide adapted this article into English for Handelsblatt Today. To contact the authors: [email protected] and [email protected]