Tag: alternative investment

Categories
Learn

The rise of wine influencers and the power of the brand: Bordeaux Diaries Part II

Chateau Pavie barrel room winery

Explore the rise of wine influencers and how Bordeaux estates balance authenticity, identity, and changing consumer expectations.

As wine criticism continues its transformation, a new force has emerged alongside traditional voices – the influencer. While formal critics retain a place of authority, many Bordeaux estates now acknowledge that digital personalities play a growing role in shaping perceptions, influencing purchases, and spreading the message of wine.

  • Influencers now shape opinions through social media, though their messaging often lies outside producers’ control.
  • Bordeaux estates are prioritising authenticity and estate identity.
  • Producers increasingly view the customer as the ultimate judge, trusting loyal drinkers over trends.

How wine influencers are shaping modern criticism

The majority of the chateaux interviewed by WineCap referred to the widespread use of social media as a tool in the wine critique space, recognising the parallel role of influencers to conventional commentary. Several also noted that quality and precision of influencer messaging was usually beyond a producer’s control, and not as accessible for them to engage with or oversee as traditional critique.  

Château Pavie, Premier Grand Cru Classé (B), Saint-Émilion

‘Robert Packer was definitely the most influential critic in the world of wine, and for Bordeaux particularly, and he’s actually done a lot of good things for Pavie, because he scored us 100 points four times in ten vintages, which is quite unique in Bordeaux,’ Olivier Gailly, commercial director at Pavie explained to WineCap. ‘Since he retired, we’ve seen more and more wine critics. Actually, almost every day we see new critics who are quite influential within his or her community or his or her country.’

Gailly described such personalities as ‘half influencer, half critic’.

‘We have to adapt. There is a lot of social media and there are influencers throughout this medium. The most important thing is to make sure they relay the right messages. They relay the truth of our terroir, of what the team is doing, and they talk through to the work we do with quality.’

Château Pape Clément, Grand Cru, Pessac-Léognan

‘The role of critics and journalists remains, but in my opinion, Parker was the best taster. I’ve never known any that were better, more precise, more honest in their decisions,’ said Bernard Magrez from Château Pape Clément. ‘Now, there are not just journalists but also influencers. There’s digital media that features a lot of short but quality programmes, with the mission to advise wine lovers.’

‘These programmes are often made by quality people, but not always,’ Magrez added. In any case, they provide the service of engaging with consumers, so they do not ‘make a mistake when choosing wine’. 

Estate identity and customer loyalty in modern wine marketing

As the wine world becomes increasingly noisy with a blend of critics, influencers, and online commentary, many producers are returning to the fundamentals: authenticity, estate identity, and customer loyalty.

Château Saint-Pierre, Fourth Growth, Saint-Julien

‘It is sometimes so difficult to handle, that we think that the main thing is to simply be proud of what we produce,’ explained owner of Château Saint-Pierre Jean Triaud to WineCap. ‘During En Primeur, there are maybe 30, 40, or even 50 people telling us they can offer influence for the wine. You get professionals, but you also get all the guys you don’t know writing online and maybe followed by, I don’t know, 100,000 people.’

Triaud said it was impossible and undesirable to produce wine that everybody liked. ‘So, we try to keep the identity of the wine and what the family wants to do.’

Château La Conseillante, Pomerol

‘Since Parker retired, the world of journalists has changed a lot. Now we do not have one journalist, we have a lot of journalists with different tastes,’ said Marielle Cazaux, general manager of Château La Conseillante. ‘So, for me, the wine has to keep its identity with all these different journalists. Before, with Parker, you had to just please one taste. Now it’s more and maybe it is a good thing’.

Château Beychevelle, Fourth Growth, Saint-Julien 

Philippe Blanc, general manager at Château Beychevelle, was adamant that the customer, and not the critic, was “king”.

‘The role of wine critics is very important but, as I am a very rude person, I said to somebody one day in London at a seminar that the most important people were the customers and not the journalists. Everybody laughed in the room, but I still believe that,’ he told WineCap. ‘Journalists are extremely important, they are knowledgeable, they are good guides but I think the best guide you can get is a customer himself. Now, if you need help, you can follow some journalists that you trust.’

With a multitude of journalists and influencers today, Blanc said he was not sure one single person took the lead. ‘I think as customers, you have to find the people you feel good with and then stick to them – but the most important thing is to open a bottle, to share it with friends and see if you like it and you give the mark you want then. It is important to feel comfortable with what you taste and not to follow somebody like you follow the shepherd’. 

Château Lynch-Bages, Fifth Growth, Pauillac

Perhaps the most direct remark about putting house identity first in today’s complex wine critique space came from Jean Charles Cazes, CEO of several properties, including Château Batailley and Château Ormes de Pez alongside Lynch-Bages.

‘We have had a consistent style and consistent practices over generations. I think it is important that you follow your style because fashions always evolve and change. If you try to follow the fashion, it will be out of date very quickly. So, we follow our own path.’

In today’s fast-moving and fragmented wine commentary landscape, the critic no longer reigns alone. Influencers bring reach and relatability, digital media expands access, and consumers themselves wield increasing influence over what succeeds. Yet amid this evolution, Bordeaux’s finest estates are charting a steady course – staying true to their identity, their terroir, and the loyal customers who bring their wines to life in glasses around the world.

See also our Bordeaux I Regional Report. 

WineCap’s independent market analysis showcases the value of portfolio diversification and the stability offered by investing in wine. 

Start your wine investment journey with WineCap’s expert guidance.

Categories
News

Bordeaux wine labels: role in wine investment?

Alongside ‘provenance’, ‘scarcity’, and ‘vintage’, another key influence on wine investment potential is ‘producer and brand reputation’. These words encompass tradition, track record, trust, and market recognition, and there’s little that more instantly communicates these features than a wine label.

WineCap spoke with prestigious Bordeaux châteaux and learned about the importance of connection to heritage behind the vast array of wine labels found in the leading wine investment region.

  • Classic châteaux images inspire confidence with age-old legacy.
  • Colour is a strong signal of recognisable brand association.
  • Historic tales showcase links to the region’s heritage.

Classic Left-bank style: Château Margaux, First Growth

One label that has barely altered over time is that of Château Margaux. Displaying an image of the house’s legendary neo-classical château, after rebranding in recent years, the label’s font harks back to the style used by the estate in the late 1800s

Philippe Bascaules, managing director, commented to WineCap on the pedigree of the overall design and the value of immediate recognition. ‘The label of the bottle of Château Margaux is very old. It was designed at the beginning of the 19th century. It’s just the image of the château, which became our logo. I think it’s probably one of the most famous wine labels.’

Regal opulence, eastern allure: Château Ducru-Beaucaillou, Second Growth

Combining Western and Eastern finesse, the label of Château Ducru-Beaucaillou displays an oblique line illustration of the majestic estate set against a luxuriant golden-hued backdrop.

‘This label was created by the Johnstons, who owned the estate at the end of the 19th century, and, except for only slight changes, it has never changed,’ Bruno Borie, co-owner and manager of the Sant-Julien château, told WineCap. ‘It has always been this beautiful yellow, orange, and gold. I think the inspiration was the Venetian Palladian palaces that were painted in this beautiful yellow colour. Also, the late 19th-century Nathaniel Johnston married Princess Mary of Caradja from Istanbul, and she was a princess from a Greek family installed in Turkey who were very close to the sultan. Mary probably introduced this beautiful yellow colour, which was eastern – Orientalism was a style that was very fashionable at the end of the 19th century.’

Borie added that the label’s hue was possibly also influenced by contemporary trade with the Far East. “I don’t know if it was the intention, but I think that they were already shipping to Asia in those days, and gold was the colour of the Chinese Emperor.”

Borie noted the prominence of the house labelling. ‘When you are in front of a shelf or when you are in a restaurant, you immediately recognise that Ducru-Beaucaillou label. It’s a unique label that you need probably half a second to find.’

On the secondary market, the wine’s value has risen 50% over the last decade.

Historic story: Château Beychevelle, Fourth Growth

Breaking from the tradition of displaying a grand Bordeaux estate on the label, Château Beychevelle features an arresting black-and-white illustration of a vessel on a river. The boat is adorned with a griffon-like figurehead that looks ahead confidently as it floats on the calm river waters. Its sail is lowered and bears a cluster of grapes, while a pennant flag flutters gracefully from the mast.

The depiction honours the estate’s 17th-century foundations, when the first Duke of Épernon – a renowned and admired French admiral – owned the Gironde River château. His presence commanded such high regard that ships sailing by on the river would lower their sails in respect. This historic tale inspired both the estate’s emblem and name Beychevelle, from the Gascon phrase ‘Bêcha vêla,’ translating as ‘lower the sails’.

‘You don’t see a building, you don’t see a chateau or a gate, which is very common on wine labels,’ managing director of the Saint-Julien house, Philippe Blanc, told WineCap. ‘You’ve got this white corner cut label with a boat, which is quite rare and is very definitely recognisable as Beychevelle. Some people think the boat is a Viking boat, but it’s not. It’s a local boat going along the River Gironde and lowering its sail to show respect to the Duke.’

Over the past 12 months, the average case price of Chateau Beychevelle has dipped in value by 7%, but in the past 10 years, it has increased by 55%.

Bold and colourful: Château Lafon-Rochet, Fourth Growth

When Saint-Estèphe producer Château Lafon-Rochet transformed the appearance of its buildings from muted grey to vivid colour, the influence extended beyond its premises to its label.

Today, featuring a striking mustard-yellow backdrop, the house’s label displays a front-facing illustration of the elegant château, with diagonal vineyard lines in the foreground adding a sense of dynamism.

‘The label’s colour was inspired by my father,’ said general manager Basile Tesseron. ‘He disliked the grey façade and experimented with painting the château yellow, green, and red – one colour per year.’

In the end, yellow came out on top. ‘In 2000, he decided that if the château would stay yellow, the label should match. It may be bold, but now it’s unmistakably ours.’

The wine investment performance of Lafon-Rochet has been equally unmistakable – up 65% over the last decade, outperforming all the First Growths.

Dignity and blossoms: Château La Conseillante

The elegant grayscale label of Pomeral house, Château La Conseillante, quietly communicates family prestige. It features a shield-shaped emblem carrying the letters “L” and “N” for founder Louis Nicolas, which is framed by intricate, stylised berries and florals.

‘The inspiration is very simple – it’s the original logo of Louis Nicolas,’ general manager Marielle Cazaux told WineCap. ‘In French, we call it the ‘armoirée’.’

The classic design of the label is further enhanced by the bottle’s violet neck foil, which, as Cazaux said, subtly mirrors the floral violet notes often found in wine’s aromas and flavours.

Château La Conseillante prices have seen an increase of 81% over the last ten years.

See also our Bordeaux I Regional Report. 

WineCap’s independent market analysis showcases the value of portfolio diversification and the stability offered by investing in wine. Speak to one of our wine investment experts and start building your portfolio. Schedule your free consultation today.

Categories
Learn

How fine wine investment attitudes differ in the UK and US

  • UK investors are moving faster than their US counterparts in handing over to a younger, tech-savvy generation, with a sharper decline in ‘very experienced’ participants.
  • US portfolios still allocate more to fine wine on average, reflecting a greater appetite for alternative assets despite similar downward trends in allocation.
  • Both markets are embracing digital tools and AI-driven insights, but the UK appears slightly ahead in integrating fine wine into a broader fintech-enabled investment strategy.

The fine wine investment market in 2025 is experiencing a paradigm shift on both sides of the Atlantic. While the United Kingdom and the United States share many overarching trends like the rise of a younger, tech-savvy investor base and the repositioning of fine wine as a strategic asset, the nuances in their trajectories highlight key cultural, financial, and strategic differences.

A shared generational shift at different paces

Both the UK and US reports depict a clear generational handover in fine wine investment. Baby boomers, once the stalwarts of the market, are selling off holdings accumulated over decades. In their place, a new cohort of Millennial and Gen Z investors is emerging – individuals who see wine less as a consumable luxury and more as a data-driven, alternative investment.

*UK

However, the pace of this transition is more pronounced in the UK. Only 32% of UK investors in 2025 are now classified as ‘very experienced’, a sharp drop from 52% in 2024. In contrast, the US market still holds a stronger base of experienced investors, with 44% falling into that category – a modest decline from 48% in 2024.

*US

This suggests that while the UK is undergoing a more aggressive generational overhaul, the US market remains slightly more anchored in legacy investor behaviors. This could reflect cultural factors, such as the USA’s longer-standing tradition of wine collection, or structural elements like the greater maturity of digital investment platforms in the UK.

Diverging portfolio allocations

In both markets, fine wine is increasingly treated as a complementary asset class rather than a core holding. This shift is evident in declining portfolio allocations. In the UK, the average portfolio allocation to fine wine has dropped from 10.8% in 2024 to 7.8% in 2025. US investors have larger allocations overall, which have still declined from 13% to 10.7% on average year-on-year.

While both reductions are linked to recent price corrections and broader diversification strategies, the US still shows a greater willingness to commit higher portions of wealth to fine wine. Notably, 40% of US investors still allocate 11–20% of their portfolio to wine, compared to 18% in the UK.

This discrepancy may be driven by different attitudes toward risk, or a reflection of the US investor’s broader enthusiasm for alternatives – including crypto, art, and collectibles – where fine wine fits comfortably into a high-yield mindset.

Technology and the new investor toolkit

One unifying force across both markets is the use of AI, data analytics, and digital platforms. The new generation of investors is not relying on intuition; they’re using dashboards, price trends, and machine learning models to inform their trades.

*UK

This transformation is blurring the line between emotional and analytical investment, enabling fine wine to shed its image as a passion-led endeavor and gain legitimacy as a financial tool. However, the UK appears slightly more mature in this regard, perhaps due to a tighter integration between fintech and alternative asset platforms.

*US

Market sentiment: recalibration, not retreat

Despite recent price softening, neither the UK nor US market is retreating. Instead, both are recalibrating. Experienced investors are taking profits, newer investors are entering at lower price points, and portfolio managers are redefining what role wine should play – most now agree it’s a diversifier, not a pillar.

Crucially, both markets anticipate that today’s corrections will lay the groundwork for tomorrow’s gains. Historically, fine wine has shown resilience and rebound capacity. The current dip may ultimately broaden participation and enhance long-term sustainability.

Two markets, one destination

The UK and US fine wine investment landscapes are converging in vision, yet diverging in pace and personality. The UK is evolving faster – more volatility-tolerant, more digitally advanced, and more dynamic in reallocating portfolios. The US, by contrast, remains a more anchored, cautiously progressive market, with higher average allocations but slower risk adoption.

Yet both markets are ultimately moving toward the same future: a fine wine investment world that is younger, smarter, more inclusive, and increasingly strategic.

As fine wine sheds its elitist past and embraces a tech-enabled future, investors on both sides of the Atlantic recognise fine wine’s growing potential.

Looking for more? See also: 

WineCap Wealth Report 2025: UK Edition

WineCap Wealth Report 2025: US Edition

Categories
Learn

What makes fine wine a great portfolio diversifier?

  • One of the key characteristics that make fine wine an attractive diversifier is its low correlation to traditional financial markets.
  • Its scarcity and tangibility further drive up its value. 
  • According to the WineCap Wealth Report 2025, 96% of UK wealth managers expect demand for fine wine to increase, a testament to its growing recognition as a valuable asset class. 

Moreover, fine wine’s value is tied to its provenance, condition, and aging potential, making it a tangible investment with intrinsic worth. Unlike cryptocurrencies or speculative stocks, which can experience extreme fluctuations based on sentiment or market cycles, fine wine benefits from an established secondary market where demand remains steady among collectors, investors, and luxury buyers.

Inflation hedge and wealth preservation

Fine wine serves as a natural hedge against inflation, protecting purchasing power when traditional assets are eroded by rising costs. As inflation increases, the prices of hard assets like fine art, real estate, and fine wine tend to appreciate, maintaining their value in real terms.

Wealth managers increasingly recommend allocating a small percentage of a portfolio to alternative assets like fine wine to safeguard against economic turbulence.

Tax efficiency for UK investors

For UK-based investors, fine wine presents a significant tax advantage over traditional investments. Unlike stocks, real estate, or business assets that are subject to Capital Gains Tax (CGT), fine wine is classified as a “wasting asset”, meaning it has an anticipated lifespan of less than 50 years.

This classification makes fine wine exempt from CGT, allowing investors to realise profits without the same tax burdens as other asset classes.

For example, a traditional investment yielding a £5,000 profit could be subject to CGT at rates of up to 24%, reducing net returns. In contrast, a fine wine investment with the same £5,000 profit would be tax-free, maximising gains for high-net-worth investors.

This tax efficiency makes fine wine particularly attractive in wealth management strategies, especially as the UK government has lowered CGT allowances and increased tax rates in recent years.

Growing institutional and HNW investor demand

The perception of fine wine as a viable financial asset is rapidly evolving. Traditionally the domain of private collectors and enthusiasts, fine wine is now being incorporated into portfolios managed by wealth advisors, family offices, and institutional investors.

According to the WineCap Wealth Report 2025, 96% of UK wealth managers expect demand for fine wine to increase, a testament to its growing recognition as a valuable asset class. 

Additionally, AI-powered investment tools are making fine wine more accessible to a broader range of investors. Fine wine companies and professionally managed portfolios allow investors to gain exposure without needing deep industry expertise.

This institutional adoption further legitimises fine wine as a serious financial instrument, enhancing its liquidity and long-term viability.

Why fine wine deserves a place in your portfolio

Incorporating fine wine into an investment portfolio provides stability, tax efficiency, inflation protection, and strong diversification benefits. Its low correlation with traditional assets makes it particularly valuable during periods of market uncertainty, while its scarcity-driven appreciation ensures long-term value retention.

For investors seeking to protect and grow wealth, fine wine remains one of the most compelling alternative investments available today.

Categories
Learn

How different bottle sizes impact your wine investment returns

Luxury fine wine labels different size bottles
  • Larger bottles have a longer shelf life, meaning that there is more time for price appreciation.
  • They are also available in smaller quantities, adding an element of rarity that drives up demand and price.
  • Champagne and Bordeaux are the regions leading the investment market for big bottles. 

When choosing a wine for investment purposes, the region, producer reputation and vintage quality are among the first things to consider. However, one factor that is often overlooked but can have a significant impact on the investment value is the bottle size.

Investing in larger wine bottle formats can enhance the longevity and quality of the wine, and lead to higher returns compared to standard bottles. Below we explore the reasons why size matters in the world of wine investment.

How bottle size affects wine investment

The science behind bottle size and wine quality is well-established. Larger bottles have a smaller surface-area-to-volume ratio, meaning less exposure to oxygen, which slows the wine’s ageing process. This slower ageing allows the wine to develop more complexity over time, preserving its character better than smaller formats.

This benefit makes large-format bottles, such as magnums and jeroboams, highly sought-after. Not only can these bottles offer superior quality, but they also come with a scarcity factor that often results in significant price premiums. The rarity of these formats adds an element of collectability, making them a lucrative investment option.

The price performance of larger bottles

Larger bottles have enjoyed a growing demand in the wine investment world. The two main regions that dominate this market segment are Champagne and Bordeaux. 

During Champagne’s recent bull run (2021-2022), secondary market trade by value of big bottles rose from 7% to 15%, which in turn impacted prices. The average value of a magnum case rose an impressive 78%. 

Magnums of Louis Roederer Cristal 2008 saw a 54% premium over standard bottles, while Dom Pérignon 2008 magnums commanded an 18% price uplift. Larger formats like Methuselahs (6 litres) of Cristal 2008 enjoyed a staggering 175% premium. 

Meanwhile, some of the most sought-after Bordeaux wines in large format include the First Growths Château Lafite Rothschild and Château Mouton Rothschild, the latter of which has highly collectible, vintage-specific artist labels.

From Burgundy, Domaine de la Romanée-Conti produces large bottle formats that make them a prime choice for high-end collectors. Other in-demand large format bottles from the rest of the world include Penfolds Grange and Opus One. 

Size options and investment opportunities

Wine bottle sizes graphic

While standard bottles are more commonly traded, investing in magnums and larger formats offers several advantages. For example, three magnums of Pétrus 1995 traded for £17,200 in July this year, yielding a 16.5% premium compared to their 75cl counterparts.

Rare formats like Balthazars and Nebuchadnezzars can fetch even higher premiums due to their scarcity, particularly for sought-after vintages and regions.

Why larger formats can lead to better returns

There are several reasons why larger bottle formats can offer better investment returns. 

Slower ageing process: Larger bottles slow down the wine’s exposure to oxygen, allowing for better preservation and longer ageing. This makes the wine more desirable over time.

Rarity and collectability: Large-format bottles are often produced in smaller quantities, adding an element of rarity that drives up demand and price.

Increased longevity: Investors can hold onto these bottles for longer periods without worrying about the wine deteriorating. This allows them to take advantage of market peaks and secure higher returns.

Visual appeal: Large-format bottles make a statement at auctions or in private collections. Their grandeur and rarity often make them more attractive to high-end buyers.

Timing is everything

Given the current market conditions, larger formats are particularly attractive. Prices for these bottles are often discounted during dips in the market, making them an affordable entry point for investors looking to capitalise on future growth. As demand for rare and collectible wines continues to rise, investing in larger formats now could pay off significantly in the long run.

If you’re looking to diversify your portfolio, now may be the time to consider going big on bottle sizes.

Categories
Learn

What factors affect fine wine prices?

Domaine Romanee de la Conti wine bottles
  • The most important factors that affect fine wine prices are production costs, climate change, market demand, and economic conditions.
  • Market demand is influenced by critic scores, rarity, producer reputation, vintage quality, and geopolitics.
  • Understanding the factors that affect fine wine prices is key to making smart investment decisions.

Fine wine is more than just a luxury product – it is an asset class, a status symbol, and for many, a serious investment. While buyers might be aware of the rising value of sought-after labels, understanding the factors that drive these prices (upwards or downwards) is key to navigating the fine wine market. 

In this article, we explore the primary factors affecting fine wine prices, including production costs, climate change, market demand, and broader economic conditions.

How production costs shape fine wine prices

At the heart of fine wine pricing are the production costs. The making of a high-end wine is a meticulous, labour-intensive process that is inevitably reflected in the price. So are the land costs, which can reach astronomic heights in famous fine wine regions like Burgundy, Napa or Bordeaux. 

For instance, the luxury conglomerate LVMH recently acquired 1.3 hectares of Grand Cru vineyards on the Côte d’Or for 15.5 million euros. The purchase includes half a hectare each in Corton-Charlemagne and Romanée-Saint-Vivant, as well as 0.3 hectares in Corton Bressandes.

Besides land costs, manual labour and vineyard management can further affect release prices. The more human intervention required – whether in the vineyard or the winemaking process – the more costs add up.

Finally, many fine wines are not ready for release for several years after production. Extended ageing means producers incur additional costs, which in turn drives up prices for wines that are stored for longer periods before hitting the market.

The impact of climate change on fine wine pricing

In many traditional wine regions, unpredictable weather patterns, such as frost, heatwaves, and hailstorms, have resulted in lower grape yields. For example, the devastating frost in Burgundy in 2021 significantly reduced production, leading to a scarcity of wines from that vintage. 

When yields are lower, the limited supply pushes prices higher, especially for in-demand producers. This scarcity effect can be seen in top wines like Domaine Leflaive or Domaine de la Romanée-Conti, where a challenging growing season can result in soaring prices.

Additionally, climate change is affecting the style of wines being produced. While some regions like Bordeaux are adapting to these new conditions, climate volatility has added another layer of unpredictability to wine prices. It has also facilitated the emergence of new wine regions, leading to a more competitive landscape.

Market demand and the rise of fine wine investment

Market demand is perhaps the most significant factor affecting fine wine prices. The most sought-after bottles usually rise in value, as quality improves over time and supply diminishes.

Producer reputation, vintage quality and scores from major critics like Robert Parker and Neal Martin play a key role here, informing buying decisions and pricing strategies. A 100-point wine often commands a significant premium to a 99-point wine. When it comes to the Bordeaux First Growths, for instance, the average difference between a 99-point and a 100-point wine is over £350 per case.

Market demand is also shaped by geopolitical factors. The global nature of wine trading platforms means that market sentiment can affect wine prices faster than ever before. Demand from China largely contributed to Bordeaux’s pricing surge in 2011, and today interest is moving towards Burgundy and Champagne.

Economic forces that influence fine wine prices

While the fine wine market generally operates with its own dynamics, macroeconomic factors such as inflation, currency fluctuations, and recessions can all have an impact.  

In times of economic downturn, discretionary spending often decreases, which can lead to short-term drops in wine prices. However, fine wine has historically shown remarkable resilience due to its tangibility, rebounding after economic dips. 

Currency fluctuations also play a role; for instance, a weaker euro might make European wines more attractive to international buyers, spurring demand and increasing prices in markets like the US or Asia.

Changes in trade policies and tariffs can also have an impact. The Trump tariffs on European wines in 2020 temporarily raised the prices of French and Italian wines in the American market. While these tariffs have been reduced, ongoing changes in trade regulations can create volatility in wine pricing, particularly for internationally traded wines.

Understanding price fluctuations within fine wine

Fine wine prices are influenced by a complex interplay of factors, from the inherent quality of the wine itself to broader market forces and economic conditions. Understanding these factors is key to making informed decisions and maximising returns on investment.

Want to learn more about fine wine investment? Download our free guide.

Categories
Learn

What is a market dip, and how can fine wine investors take advantage?

High end wine label bottles
  • A market dip is a temporary decline in prices, caused by economic or market-specific factors.
  • Buying the dip is advised when the underlying market fundamentals are favourable.
  • This is arguably the best time to invest in fine wine in a decade.

A market dip is a temporary drop in prices. This is often caused by economic or market-specific factors. In the fine wine market, these dips are less frequent and less volatile compared to traditional financial markets like stocks or bonds. While the fine wine market has been bearish three times since the turn of the century, global mainstream markets have experienced many more significant crashes. 

However, when a dip does occur, and provided that the fundamentals are strong, it can present a unique opportunity for buyers. Investors can enter the market, adjust their allocations or expand their portfolios with high-value brands and rare vintages at discounted prices. Sellers may look to liquidate their stock, offering rare and premium wines from regions like Bordeaux, Burgundy, and Champagne at more attractive prices.

Currently, the fine wine market is benefitting buyers. While the temporary drop in prices might raise concerns on the surface, those who adopt a long-term, strategic approach can reap significant rewards by buying the dip.

Buying the dip when the fundamentals are strong

According to Sir John Templeton, the best time to invest is during ‘points of maximum pessimism’. With fine wine indices down over 20% from their 2022 peaks, this moment presents one of the best opportunities to buy in the last decade.

Fine wine fundamentals remain intact: wines improve with age, and become rarer over time as bottles are consumed. The market’s appetite for older vintages is still strong, and regions like Burgundy, Bordeaux and Champagne continue to break pricing records at auction.

Fine wine indices performance 2024

Current macroeconomic environment and its impact

The global economy is currently facing several challenges – rising inflation, high interest rates, and geopolitical tensions, all of which have contributed to the recent dip in fine wine prices. 

Despite these macroeconomic factors, fine wine remains less volatile than traditional markets. During times of economic uncertainty, fine wine’s tangible nature and intrinsic value have helped it weather storms better than more speculative assets like equities or cryptocurrencies. 

Additionally, the growing demand for luxury goods continues to support the fine wine market. This demand will likely drive the next phase of growth once global economic conditions stabilise.

Historical fine wine market rebounds

Another reason for confidence is that the fine wine market has consistently rebounded after periods of economic downturn. During the 2008 global financial crisis, the Liv-ex 100 index fell by 25% but had risen over 60% by mid-2011. 

20 year performance of Liv-ex 100 and Liv-ex 1000

Similarly, Bordeaux’s peak in 2011 was followed by Burgundy’s rise, showing that demand for fine wine remains strong even if it shifts on a regional basis. This is why diversity is key. 

The market is no longer dominated solely by top Bordeaux, and spreading your allocations across key wines and vintages can balance an investment portfolio and maximise returns.

How to take advantage of the dip in the fine wine market

For investors looking to capitalise on the current market dip, the strategy is clear: buy low and hold for the long term. 

Focus on proven performers: Wines from top regions like Bordeaux, Burgundy, Italy and Champagne have historically demonstrated resilience. Investing in top vintages and estates offers a measure of security.

Take advantage of fear-driven selling: As some sellers look to exit the market prematurely, investors can acquire undervalued wines with strong growth potential.

Diversify your portfolio: Spread your investment across different regions, producers, and vintages to mitigate risk and maximise returns.

Get in touch to discuss your allocations or to start building your fine wine collection. Schedule a consultation.

Categories
Learn

How technology has democratised fine wine investment in 2024

Wine investment technology
  • Technology has democratised fine wine investment by opening new avenues and making the asset more accessible to novice investors.
  • Since last year, there has been a 32% increase in UK investor confidence in the market’s liquidity – a shift partly driven by technology.
  • 80% of UK investors believe that technology like blockchain will create more security and confidence in the sector.

In the world of fine wine, exclusivity has long defined the industry, which has historically attracted seasoned aficionados and connoisseurs with extensive resources and specialised knowledge.

In recent years, technology has democratised the sector, opening new avenues and making fine wine appeal to a more diverse investor demographic. 

According to our 2024 UK Wealth Report, technological advancements have contributed to fine wine going mainstream and thus expanding the market’s appeal to a broader audience, in particular, less experienced investors. Technology has simplified buying and selling processes, enhanced pricing transparency and improved the market’s overall liquidity.

Technology leads to an increase in investor confidence

Since last year, there has been a 32% increase in UK investor confidence in the market’s liquidity – a shift partly driven by technological advancements. In the US, this number is 14%. 

An increasing number of fine wine investors are leveraging data and technology to inform their buying and selling strategies and track the value of their portfolio.  

Online platforms, like WineTrack, have made it easier to identify investment opportunities, compare prices and critic scores and track a brand’s historic performance all in one place. Meanwhile, fine wine indices like the Liv-ex regional indices can help investors compare the performance of different regions and identify market trends.

UK Wealth Managers 2024 Statistics

Advanced technology’s role in fine wine trading

According to our survey, investors and wealth managers are increasingly receptive to new developments, like the use of blockchain technology, in the fine wine investment landscape.

80% of UK investors believe that technology like blockchain will create more security and confidence in the sector, up from 56% last year. In the US, 76% of investors recognise its benefits, up from 54% in 2023.

52% of the UK survey respondents think that blockchain will make reputable releases, such as En Primeur offers, more accessible for investors without using a third party. Still, 6% of them remain sceptical about how this would work in practice.

Meanwhile, 46% of US wealth managers think that blockchain will bring greater transparency in the supply chain, and further boost investor confidence.

As a growing number of new investors consider fine wine for its unique benefits diversifying traditional portfolios, technological innovations continue to redefine their overall experience and industry standards. 

From blockchain contributing to supply chain transparency to online wine investment platforms shaping decision-making, these technological advancements are evening out the playing field by creating new opportunities in the market and appealing to a broader audience. 

For those interested in exploring this trend further, WineCap’s 2024 Wealth Report offers an in-depth look into the top motivations for investing in fine wine, the trends shaping the market, and investor sentiment.

Download your complimentary copy here. 

WineCap’s independent market analysis showcases the value of portfolio diversification and the stability offered by investing in wine. Speak to one of our wine investment experts and start building your portfolio. Schedule your free consultation today.

Categories
News

The growing importance of sustainability in fine wine investment

  • Sustainability is a major factor influencing investor decisions in the UK.
  • Fine wine producers are embracing sustainable viticulture techniques aimed at reducing their carbon footprint and making a social impact.
  • Fine wine is a forward-thinking sustainable investment choice.

Sustainability is a major factor influencing investor decisions in the UK. Fine wine producers are increasingly embracing sustainable viticulture techniques aimed at reducing their carbon footprint, making fine wine a forward-thinking investment choice.

The evolving landscape of fine wine investment

In recent years, the landscape of fine wine investment has undergone significant changes. Beyond the traditional allure of rarity and prestige, a new motivation is influencing investor decisions in the UK: sustainability.

This shift reflects a broader global trend where environmental, social, and governance (ESG) factors are increasingly shaping investment strategies across various asset classes, including fine wine. Investors are now looking at the environmental impact of their investments, and fine wine is emerging as a preferred choice for those who prioritise sustainability.

UK investors prioritise sustainability

Historically, investing in fine wine has mostly been driven by passion, financial gains, and the status of owning rare vintages from a select few vineyards. 

However, as society becomes more conscious of sustainability issues, there has been increased global demand for sustainable and impactful investing. Fine wine is ideally positioned to benefit from this shift.

Recent research conducted for our 2024 UK Wealth Report found that sustainability has emerged as the most important factor influencing the preferences of both seasoned and novice investors in the fine wine market. 

UK investor motivations 2024

Our 2023 survey found that 56% of investors are attracted to fine wine because it is a sustainable asset class with a low carbon footprint. In 2024, this positive investor sentiment towards fine wine has increased in the UK, with 68% of the survey respondents citing sustainability as their top motivation to invest in fine wine. 

UK investors increasingly recognise the benefits of ethical alignment, accessibility, and financial viability that fine wine brings as an asset.

The benefits of sustainable investing

One of the most compelling selling points of fine wine investment lies in its low-carbon benefits. Many fine wine producers are embracing sustainable viticulture techniques aimed at reducing carbon footprints, as outlined in our Fine Wine Sustainability Report.

Vineyards leading the charge are implementing methods to preserve old vines, adapt to climate change, mitigate environmental impact, and promote biodiversity. These sustainable practices not only benefit the environment but also enhance the quality and longevity of the wine, making it an even more attractive investment.

The expanding appeal of sustainable investing is expected to grow, driven by environmentally conscious investors seeking resilient assets that offer both financial security and ethical value. This trend not only enhances the market appeal of fine wine but also reinforces its status as a forward-thinking investment choice.

A deeper dive into the changing fine wine investment attitudes

For those interested in exploring this trend further, WineCap’s 2024 Wealth Report offers an in-depth look into the top motivations for investing in fine wine, the trends shaping the landscape in the UK, and investor sentiment.

This comprehensive report provides valuable insights for both current and prospective investors, highlighting the growing importance of sustainability in the fine wine market.

Download a complimentary copy of WineCap’s 2024 Wealth Report to gain a deeper understanding of this evolving market and the role of sustainability in shaping its future.

WineCap’s independent market analysis showcases the value of portfolio diversification and the stability offered by investing in wine. Speak to one of our wine investment experts and start building your portfolio. Schedule your free consultation today.

Categories
Report

WineCap Wealth Report 2024: US Edition

WineCap US Wealth Report 2024

In an era of economic uncertainty and shifting investment trends, alternative assets are gaining unprecedented traction. The 2024 WineCap Wealth Report (US edition) offers a comprehensive analysis of the fine wine market, uncovering key trends that highlight its burgeoning appeal. As fine wine transitions from a passion asset to a mainstream investment, the report explores the demographic shifts, technological advancements, and the factors driving demand. 

Methodology and demographic

In April 2024, WineCap surveyed 50 US-based full-time wealth and investment managers to gauge their views and sentiments towards fine wine investment. The respondents included 35 wealth managers, eight financial intermediaries/advisers, and seven independent financial advisers. The research was conducted via an online questionnaire. For annual comparisons, the report takes into account responses from a similar survey conducted in April 2023.

Key findings

  • Changing demographics: One in three high-net-worth individuals (HNWIs) in the US now invests in fine wine. While some begin as collectors, the majority are experienced investors drawn to fine wine for its stability. 
  • Rising demand for collectibles: Fine wine emerged as the leading collectible asset. According to our survey, 84% of US wealth managers anticipate an increase in demand over the next year.
  • Enhanced market liquidity: There has been a 14% increase in investor confidence regarding market liquidity, driven by advanced technology that enhances the trading experience and security.
  • Stability: 74% of respondents see fine wine’s stability through different market environments as the top reason to invest in it.
  • Universal value: 92% of US wealth managers recognize the benefits of fine wine being an asset of universal value, not pegged to USD.
  • Diversity: Survey respondents indicated that greater awareness of fine wine’s role in diversifying traditional portfolios could attract more clients.

The 2024 WineCap Wealth Report underscores the growing sophistication and accessibility of fine wine as an investment. As new generations of investors seek diversification and stability away from traditional financial markets, fine wine emerges not only as a stable asset but also as a leader in the collectibles market. 

The integration of advanced technology, the expanding appeal of sustainable investing, and the strategic adjustments in response to economic conditions highlight fine wine’s unique position in the investment landscape.

Download your complimentary copy of the 2024 WineCap Wealth Report and discover how fine wine can enhance your investment portfolio.

Please fill in the form below to download your complimentary copy of the report.