Investors raise a glass to English vineyards

An explosion of interest in English wine has seen almost £500m invested in UK vineyards and wineries, suggest estimates from consultants Strutt & Parker.

Analysts say some £480m of  capital investment was ploughed into the sector between 2018 and 2022. The total is based on land purchased for use as a vineyard, the cost of establishing and developing vines, and setting up wineries.

There are now over 900 vineyards in the UK, covering some 4000ha (10,000 acres). Some 12m bottles of wine were produced in 2022.

Although this area is dwarfed by production in traditional wine-growing countries, the UK is growing faster than any of the top 25 wine-producing nations. British wines won 143 medals at the recent Decanter World Wine Awards 2023, cementing the growing reputation of English wine on the world stage.

Astounding surge

“Our analysis shows how astounding the surge in investment in the sector has been in recent years – coming remarkably close to £500m,” says Nick Watson, Strutt & Parker head of viticulture.

“Interest in the British wine sector is as strong as we can remember, Over the past 12 months, the number of calls we have received from people interested in either buying a vineyard or establishing a new one has tripled.”

Strutt & Parker was one of the first agents with access to specialist vineyard mapping software able to identify land suitable for growing vines.  High-profile established global brands which have invested in the UK over recent years include such as Taittinger, Pommery and Freixenet.

But Mr Watson said most investors in the sector tended to be people with successful business careers who were looking for a change in direction. “They view a vineyard as an investment which they hope will be financially sustainable, but also enjoyable,” he said.

Deep pockets

Mr Watson says the price of land suitable for vines typically ranges from £16-20,000/acre, while established vineyards can sell for more than £35,000/planted acre.

“It is an investment that requires deep pockets – the upfront costs of establishing a vineyard are significant and it takes five years before the vines reach full productivity, so cash flow needs careful planning.

“Yet despite the challenges, there seems to be no shortage of people seeking land on which to establish vines. .

Sense of optimism

“The continued success of English sparkling wines on the international stage has put the sector on the map. Sales are on the rise and there is a real sense of optimism about the future.”

The best sites have free-draining soils, gentle south-facing slopes that are not susceptible to strong winds and late frosts, are less than 100m above sea level and where average temperature and sunshine hours are highest.

Very little land suitable for establishing vines comes onto the open market. Instead,  buyers usually need to approach landowners of suitable sites and negotiate with them to sell, often by offering a premium.

Land values on the rise for planting vines

Arable land values in south-east England – where growing vines is most established for climatic reasons – have risen over the past 12 months to about £10,000-12,000/acre, so the value of ground suitable for vines has also risen and now often sells for £16,000-£20,000/acre.

But buyers are also increasingly looking to Norfolk, Suffolk and Essex. These counties have untapped potential for planting vines – but share many of the same characteristics as east and west Sussex, Kent, Surrey and Hampshire.

Where buyers are only looking for a small plot of say 10-12 acres, which is the minimum size required for anyone looking to establish a vineyard as a viable business, then prices can rise as high as £25,000/acre.

Rising temperatures

Climate change is projected to impact the UK wine sector by 2040, with growing season temperatures expected to rise. This could present opportunities for more red wine production and the growth of white wine varieties such as Sauvignon Blanc, Semillon, and Riesling.

Large new areas in the UK could also become more suitable for viticulture, including Cambridgeshire, Oxfordshire, Berkshire, the East Midlands, the Severn Valley, southwest England and south Wales.