HomeUKDemand for British vineyards triples in a year as interest in English...

Demand for British vineyards triples in a year as interest in English wine increases

The explosive interest in winemaking in the United Kingdom has stoked interest in a relatively new type of property for the country: British wine estates.

According to winegrowing experts at Knight Frank, Britain is currently the fastest growing wine region in the world. Across the South East of England, demand for vineyards and undeveloped land suitable for viticulture is increasing at an exponential rate, from international producers to hobby oenophiles.

This summer, California-based wine giant Jackson Family Wines, owner of the flagship Kendall-Jackson brand, became the first major still wine producer to invest in the English wine sector. The American company, which owns more than 40 wineries in the United States, Australia, South Africa, Chile, France and Italy, will initially produce sparkling wine at a contract winery facility in Kent, but has also acquired 65 acres of land in Essex. where he plans to plant chardonnay and pinot noir vines with a view to producing super premium still and sparkling wines.

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“Generally, it has been existing wineries looking to expand their vineyard acreage, but we have seen some pretty big new entrants recently,” said Ed Mansel Lewis, head of viticulture at Knight Frank, who negotiated the purchase of Jackson Family Wines. “Most people make premium sparkling wine, but these are the first people to make bottles of still wine over £60 ($75) in the UK”

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So far, the property trade does not necessarily compare to the classic French vineyard sale that includes a chateau surrounded by its own vines, said viticulture expert Will Banham, director of property and agricultural agency at Strutt and Parker.

“But buyers are starting to broaden their searches to include large rural properties alongside land suitable for planting, “with a view to creating something that is more like the British version of a wine estate,” he said. “It’s relatively new to the market that we are just starting to see in the last six to 12 months.

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A flourishing industry

Wine has been grown commercially in Britain since the 1960s, but for decades most producers grew German grape varieties, which are adapted to a cool climate. This changed in the 2000s, when the first English sparkling wines began to win awards and attract international attention. Growth in the sector began to accelerate significantly from 2015, when Champagne Taittinger purchased 171 acres of land in Kent to launch its premium English sparkling wine brand Domaine Evremond.

“After the 2015 purchase, suddenly everyone thought, ‘Well, if the French are doing it, then it must be good,’” Lewis said.

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The market for land suitable for growing vines has developed “very quickly”, Banham said, with inquiries about purchasing or establishing a vineyard tripling in the last year.

When the purchase of Champagne Taittinger occurred in 2015, “we were selling good quality agricultural land at a slight premium to agricultural value,” he said. “Standard agricultural land was worth £8,000 per acre and land for a vineyard could have been worth £12,000 per acre. “Now, we are at a point where standard agricultural land might have risen slightly to £10,000 per acre, but land suitable for vines is probably more expensive at £16,000 to £20,000 per acre.”

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The price of establishing a vineyard has also increased in recent years, due to the rising cost of labor and materials. He put the cost of planting and establishing land at £15,000 per acre, with a wait of between five and eight years to start seeing a return on investment.

This means that while many established vineyards are seeking suitable greenfield land to expand their operations, some new market entrants prefer to purchase established vineyards. Although to date very few have changed owners, “more are starting to be sold,” he said. “A fairly high proportion are sold off-market because the sellers tend to be quite private.”

Amid growing demand, prices have also increased for established vineyards. “For quite a long time, £25,000 to £30,000 an acre was the norm for a good vineyard, but now £35,000 to £40,000 is not out of the question for a really decent acre of vineyard land,” he said Chris Spofforth. , estate and estate director and head of viticulture at Savills.

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As demand continues to expand, so does the range of buyers.

“You can hardly name a country, or at least a continent, that has not spoken to us,” he said. “We have South Africans arriving, and now Americans are arriving. There has actually been some significant investment from the Far East in recent weeks, so there is a lot going on from abroad.

But most of the demand, especially for small and medium-scale investments, still comes from fellow Britons.

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Climate change is contributing to the boom

As farmers and landowners become more aware of the value of land suitable for wine production, deals are increasingly being made outside the market. What this means for buyers looking for a vineyard is that patience and a good agent are key. The best places for viticulture are located less than 100 meters above sea level, with free-draining soils, gentle slopes facing south, with average temperatures and high hours of sunshine and sheltered from strong winds and late frosts.

“If what people want is the classic minimum of 15 to 20 acres on chalk, then clearly they are largely restricted to north and south Kent and Surrey and east and west Sussex, and there will always be a limited amount of that land that will be available for purchase, whether on the open market or privately,” Banham said.

But as climate change raises temperatures in Britain, the market is evolving.

“What you’ll find is that demand for land will start to expand further out into the southeast,” Spofforth said. “Certainly East Anglia is very popular. Essex has been popular for a while, but that’s growing in Suffolk, Norfolk and places like that. “There is absolutely no reason why Oxfordshire and Berkshire should not become increasingly popular, and there are grapes and brands that are moving further west and into Wales.”

Strutt and Parker’s 2023 Summer Viticulture Report projections predicted that by 2040 the 10 existing wine counties in England are expected to almost triple to 27, including Cambridgeshire, Oxfordshire, Berkshire, East Midlands, Severn Valley, South West England and South Wales.

The importance of placemaking

Demand for a vineyard with a true farmhouse at its center is likely to grow as winemakers seek direct-to-consumer sales, aided by a restaurant or bed and breakfast.

Investments in vineyards and wineries in the UK have amounted to almost £480m over the past five years, Strutt and Parker’s 2023 report estimates. There are currently more than 900 vineyards in the UK, up 80% in the last five years and almost triple the number 20 years ago. As new businesses proliferate, a nascent trend is beginning to emerge in which vineyards look for ways to sell directly to consumers, maximizing their profits per bottle.

“When you look at that £480m figure, much of it is made up of land purchases, vineyard establishment, new vineyards and significant acreage that has come into productive life and has been planted in the last three “What people are aware of is the need to have a viable route to market,” Banham said.

Direct-to-consumer sales accounted for just 19% of wine sales in 2022, according to the Wines of Great Britain report. As the industry grows, vineyard buyers are beginning to look not just for land but for properties suitable for setting up a café, restaurant or tasting rooms to complement bottle sales, Lewis said. “It should be part of every wine producer’s strategy to encourage people to come to their winery, so I think we should see people focusing on the quality of the place where they make and market their wine.”

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