SteelStorage

September 2007 - FOR most casual wine drinkers, opening a bottle of wine for personal consumption involves nothing more complicated than grabbing a bottle from a wine rack in the living room or rummaging through the kitchen refrigerator. Some might even have a built-in wine fridge, where the temperature and humidity are more carefully controlled. Those with the space and the inclination will go the way of the purpose-built home cellar, but only the really serious collectors make use of a professional wine storage facility.

FOR most casual wine drinkers, opening a bottle of wine for personal consumption involves nothing more complicated than grabbing a bottle from a wine rack in the living room or rummaging through the kitchen refrigerator. Some might even have a built-in wine fridge, where the temperature and humidity are more carefully controlled. Those with the space and the inclination will go the way of the purpose-built home cellar, but only the really serious collectors make use of a professional wine storage facility.

Previously, only wine industry professionals such as distributors and retailers were in need of proper off-premise storage for their inventory of wines but in recent years, a small but growing number of private consumers - typically high net worth individuals with a passion for fine wines - have built up collections at a rate far greater than their ability to drink it or store it at home.

That's where some local wine professionals have detected a niche market for wine storage facilities targeting private individuals. Apart from major logistics companies with access to both bonded and non-bonded cold storage warehouses, a handful of small companies now offer something akin to bespoke wine storage services for private customers. There are also some notable differences in the way these companies operate.

Thanks to a variety of favourable factors, Singapore has the potential to become the wine hub of South-east Asia, according to The Business Times wine columnist NK Yong. These factors include a mature wine market, a highly conducive tax structure (import duty is a flat $9 per litre of wine compared to 37 per cent of the cost per bottle in Hong Kong and 240 per cent in Thailand) and the suitable infrastructure to receive and store the wines.

'People can store their wines with confidence,' says Dr Yong, who, as both wine distributor and individual collector, makes use of professional storage services. 'Originally, wine companies had some extra storage space, so they capitalised by renting it out to existing clients. Now that they are running out of space at home, more individuals are using these storage facilities - it all points to the increasing number of wine collectors in Singapore.'

Singapore has the ability to cater to the regional market in much the same way that London caters to collectors in Europe and elsewhere, says Dr Yong. 'In London, you don't need refrigeration because of underground cellars and here the costs are higher because of the added cost of refrigeration - it is still a niche market but it's a very important service.'

Wine merchant Emil Teo says temperature and humidity control are vital for proper storage. 'In Singapore, it is very important to have proper storage containers, otherwise the wine arrives in a less than ideal condition,' says MrTeo, executive director of Taste of Tradition, which encompasses a wine distribution business called Taste, a retail business called BoozeWine Storage Business.

Mr Teo adds that his company's wines are kept at a constant 12 degrees Centigrade from the time they leave the winery to the moment they are delivered to the client's doorstep here. 'No other companies do it at 12 degrees because it's expensive,' he says. Relative humidity is kept at 75 per cent.

A proper cold storage room with space for about 5,000 cases costs about $250,000 to build, which means those rare wines will be well looked after. For long-term storage, professional facilities are best, says Mr Teo. 'Private clients don't want to age their wines at home - ageing it professionally is much cheaper than doing it at home.'

While the Cellar Solution operates a conventional storage facility, meaning that clients have to make pick up and delivery requests with company staff, another local distributor, Richfield Brands & Services, has adopted a novel way to service their customers - essentially by getting them to do it themselves.

Richfield has devised an individual locker system where customers have direct access to their wines, but they also have to secure the wines themselves. Each customer is provided with a smart card and personal code to gain access to the main facility, and he has to secure his own storage space. 'The greatest thing is that it takes away from us the responsibility of receiving the wine,' says Alan Wong, a director of Richfield.

'Most wine collectors have more wine than they can conceivably drink in their lifetimes,' says KC Toh, another director of Richfield. 'Even if they build facilities at home, it's a matter of time before they run out of space. They buy their wines when young, so they have to keep it for quite some time. In some instances, they simply don't want their wives to know.'

The cost of storage is a few dollars per case per year, depending on the total number of cases. According to Mr Wong, some Singapore-based collectors store wines in a dozen or more locations all over the world. A big-time collector might have perhaps 10,000 or more cases in stock at any one time.

Visiting winemakers are also happy to note that their products are kept in optimum conditions. 'This is a unique chance for wine lovers to build up stocks of good wine under perfect conditions,' says Rowald Hepp, winemaker at Riesling producer Schloss Vollrads near Frankfurt. 'That's always the challenge: to find a good wine, store it the right way, and then drink it.'

Most estimates place the number of serious wine collectors in Singapore at around several hundred, but not more than a thousand. Several of the companies BT spoke to had about a hundred private clients each, although of course some customers may store at more than one facility.

'We've had a big jump in individual accounts in the past two years,' says Fong Kwok Wah, general manger of Toll Zenecon, a logistics firm that owns a large commercial storage facility. 'Our facilities are clean and bright, have motion detectors and closed circuit cameras and devices that monitor changes in temperature. We represent mainly distributors and retailers but we are also like private bankers to individuals.'

In September, there will be one more new player in the market when Wine Bond starts business. According to general manager Jeffrey Low, the company will cater only to private clients, providing a variety of services, including helping to import wines that customers have bought overseas and providing an online inventory service. 'We will be like a personal sommelier,' says Mr Low.

'Buying a good bottle of wine is just the beginning - good long-term storage will keep it in optimum condition.' He adds: 'Great wines take 10 or 15 years to mature and a lot of people have the money to buy but no time to look after wines. We send out alerts on when to drink the wines, their current market value. We want to be like the equivalent of London in Europe - Singapore as the central wine trading point for this part of the world.'