Why I chose to invest in Chapel Down

Winemaking in England dates back to the Romans. When the Emperor Claudius invaded one of the many legacies he brought was the vine, and the knowledge of how to transform its fruit into wine. It is likely that the wine the Romans drank bears little resemblance to what we know as wine today. It was probably most similar to what we know as Orange Wine or pét nat wines.

The British wine industry has really been experiencing a growth since the 1970s, but this has accelerated since the early 90s. Arguably the onset of the impact of global warming has only served to improve the prospects for English wine. England sits between the 50th and 55th parallels right at the extremes of where traditionally wine has been successfully grown internationally.

The increase in temperatures have supported conditions where certain varieties of grapes can now grow and thrive. Such are the prospects for English wine, that the likes of Tattinger, Pommery, and Moët have all been buying up land and vineyards in the South of England. This is likely as they contemplate how to mitigate the impact rising temperatures in Champagne. England is a space where they see there is likely a lot of potential growth in the next few years. There are estimates that production of English is set to multiply 5x by 2040 from where it was in 2018.

While I like the prospects of the industry as a whole, there are few at scale producers. Most of the production is focused on my favourite type of vineyard – the small family owned producer. I support small producers through turning up to tastings, paying for tours and buying bottles. I’ve been doing this for the last 15 years or so.

But I am English and I love wine, and frankly, I want to see the industry develop further. If only so I can buy a bottle of Bacchus without a second mortgage in the not too distant future! I am pretty confident small vineyard owners will always have a place within that ecosystem. And I’ll continue to support them in the ways I can.

I love champagne too, and I think its amazing that big champagne houses are taking up such an interest in our emerging viticulture. However, Chapel Down are producing wines which in blind tastings are coming out at least as favourably as the champagne giants. Not bad for a operation which sells less than 1.5M bottles a year!

So I’m English, I love Sparkling wine, and I want to support the English wine industry to grow. Looking around there are relatively few options for someone who is not (yet) a multi-millionaire to invest in English wine. Buying a vineyard is probably going to be beyond my investing budget. Plus I want to remain appropriately diversified as an investor.

So I could pour my money into the champagne producers who are buying up the South East. Or I could invest in one of the bigger players in the English market. I could be wrong, but my sense is the LVMH aren’t exactly short of cash. And last time I checked Pommery and Tattinger we doing alright as well. And at least from my research, there are only two stock market traded English wine firms (or at least there were at the time I made my investment).

I really like the way that Chapel Down engage with the public. They have a great vine to wine package. When I get around to it, this might allow me to get some bottles of wine with my own unique label made from grapes I have a hand in harvesting. They also have a range of benefits for investors which include free tours, discounted purchases, etc… I like the idea that they want to look after their shareholders. But they also involve them in the business with regular visits and hopefully also being customers. This to me makes a lot more sense than paying me a few percentage points in dividends every few months.

Their shares are very affordable, and in the UK can be held within an investment ISA if you are looking for tax efficiency. At the time of writing you can buy a whole share for the princely sum of £0.78p. So you can become a shareholder for less than £1, and is something which could be built up over time.

But, for me the clincher was, they just make really good wine. Their rose has just won a Decanter Award at the time of writing, so its not just me that thinks that. And as an investment its easy to get behind any brand that makes quality products. In my opinion, they are a company focused on growth, but also focused on maintaining quality. So I’m hoping my modest investment helps them grow their business, and continue making great wine.

In publishing this post, I want to make clear, I am explaining why investing in Chapel Down was the right decision for me. Clearly any investment is a personal decision. Investing comes with risks which should be fully considered prior to taking that decision. Professional financial advice sought as appropriate. Because it has been right for me, does not mean its going to be right for anyone else.

No information on this site constitutes, or shall be deemed to constitute, an invitation or recommendation to invest or otherwise deal in the Company’s shares or any other securities of the Company. Nor does the information constitute an offer to sell or a solicitation of an offer to buy any such shares or securities. For the purpose of the UK Financial Services and Markets Act 2000, nothing contained in this site is a ‘financial promotion’ nor does any statement constitute investment advice.