Tag: fine wine investment

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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.

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The best of Dom Pérignon: top vintages and investment opportunities

  • Dom Pérignon is one of the most popular wine brands in the world, resonating with drinkers, collectors and investors.
  • This week saw the latest Dom Pérignon vintage release – the 2015. 
  • Dom Pérignon prices have risen on average 90% in the last decade.

Dom Pérignon is one of the most popular wine brands in the world. It consistently ranks in Wine-Searcher’s top five most searched-for wines, and its label resonates with drinkers, collectors and investors alike.

Latest vintage release: Dom Pérignon 2015

This week saw the latest vintage release from the renowned Champagne house – Dom Pérignon 2015, with a recommended retail price of £1,750 per 12×75 case. The wine boasts 96 points from Antonio Galloni (Vinous) who said that it ‘shows terrific energy’ and ‘is a fine showing in a vintage that has proven to be tricky’.

Brief history of Dom Pérignon

Dom Pérignon is named after a Benedictine monk, Dom Pierre Pérignon (1638–1715). As a cellar master at the Abbey of Hautvillers in the Champagne region of France, he significantly contributed to the quality and production methods of Champagne, such as blending grapes from different vineyards and improving clarity. Moët & Chandon introduced the Dom Pérignon brand as its prestige cuvée in the 20th century, with the first vintage released in 1921. Since then, the wine has become synonymous with luxury and celebration.

Dom Pérignon investment performance

Dom Pérignon has been one of the most popular Champagne brands for investment for a reason. On average, prices have risen 90% over the last decade. The Dom Pérignon index hit an all-time high in November 2022 (up 136% since June 2014). Prices have since come off their peak making now an opportune time to buy, given the overall upward trend. 

Dom Perignon index

The average Dom Pérignon price per case is £2,260, making it more affordable than other popular investment-grade Champagnes like Krug, Louis Roederer Cristal, Pol Roger Sir Winston Churchill, Bollinger RD and Philipponnat Clos des Goisses, all the while providing similar returns.

The highest-scoring Dom Pérignon vintages 

The highest-scoring Dom Pérignon vintage from Galloni is the 2008 (98+), which he describes as ‘magnificent’ and a ‘Champagne that plays in three dimensions’.

The 2004 (‘one of my favourite Dom Pérignons’) and 2002 (‘speaks to opulence and intensity’) boast 98-points from the critic. Up next with 97-points is 2012, which he called ‘a dynamic Champagne endowed with tremendous character’, and the ‘beautifully balanced, harmonious’ 2006. 

From Wine Advocate, the top-scoring Dom Pérignon vintages include 1996 (98 pts), 1961 (97 pts), and several vintages scoring 96 points, such as 2008, 2002, 2006, 1976, 1990, 1982, and 2012.

The best value Dom Pérignon on the market today

Dom Perignon prices

The 2004 and 2012 Dom Pérignon vintages are two of the most popular, not least because they offer great value in the context of other vintages. They are two of the most affordable on the market today, while also boasting high scores. The 2004 further benefits from additional time in bottle; however, these earlier vintages are often harder to source than the new releases.

Regardless of the vintage of choice, and whether for investment or collecting, Dom Pérignon remains the pinnacle of the Champagne world. Its strong branding, outstanding quality and investment performance make it a top choice for wine enthusiasts and investors alike.

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.

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The rising demand for collectibles

Fine wine collectible
  • The impending largest intergenerational wealth handover is driving the expansion of the collectibles market.
  • Demand is rising among younger investors looking to diversify their portfolios with assets that offer uncorrelated market returns. 
  • Fine wine is the most popular collectible among UK investors, followed by luxury handbags and jewellery. 

From luxury handbags to fine wine and whisky, the collectibles market is expanding and attracting rising demand from investors that is set to continue. 

This shift is driven by the onset of the largest intergenerational wealth handover in history and a growing appetite among younger investors to diversify their portfolios with assets that offer uncorrelated market returns. 

The evolution of the collectibles market

The allure of collectibles as investments is not a recent phenomenon. Historically, items like fine art, rare coins, and vintage wines have been appreciated for their aesthetic and cultural value. During periods of economic uncertainty, tangible assets like these often retained their value better than traditional financial instruments. For example, during the Great Depression, art and rare coins rose in price, providing a hedge against financial market volatility.

In the post-World War II era, the collectibles market began to gain more structure and legitimacy. Auction houses such as Sotheby’s and Christie’s played pivotal roles in establishing benchmarks for the value of fine art and antiques. The rise of specialised indices, such as the Mei Moses Art Index, helped quantify returns on art investments, further opening the market.

The collectibles market has further evolved in recent years with the help of technology. Technological advancements have democratised access to market information and trading platforms, making it easier for investors to track market trends and make informed decisions. Indices like Wine Track help prospective investors see the average price of a wine, critic scores and investment returns over different time periods for free and at a glance. 

A testament to the rising demand is the expansion of the market. According to investment bank Nomura, the art and collectibles category is now larger than private assets ($1.6 trillion) and more than twice the size of private debt markets ($0.8 trillion). 

The most wanted collectibles for portfolio diversification

Among collectibles, fine wine is king. 92% of UK wealth managers anticipate demand to increase in the next year. Compared to other luxury assets, the fine wine market is more established and less volatile, offering increased liquidity and price transparency.

The second most popular collectible in 2024 is luxury handbags, with 86% of wealth managers expecting demand to rise further. As recently explored, interest in handbags as an investment has grown in line with rising prices in the primary market. For instance, the price of the Chanel medium classic flap bag is up close to 553% since 2005, and 4,809% since 1955.

Jewellery is the third most popular collectible in 2024 for 84% of wealth managers, followed by coins (82%). The fifth spot is shared by watches and rare whisky at 78%.

When it comes to the latter, fine wine investment companies are already capitalising on this trend by branching out into spirits. While its secondary market is still in the early stages of its development, rare whisky has already set pricing records.

Earlier this year, a 30-year-old bottle of The Emerald Isle by The Craft Irish Whiskey Co. sold for a staggering $2.8 million, breaking the world record for the most expensive bottle ever sold. The previous record was held by a 1926 Macallan bottle priced at $2.7 million. These figures dwarf the record for the most expensive fine wine ever auctioned, the 1995 Domaine de la Romanée-Conti Grand Cru, which fetched $558,000. 

Collectibles vs mainstream investments

The rise in demand for collectibles comes at a time when traditional investments, like stocks and bonds, are facing heightened volatility and lower returns. Collectibles offer a unique proposition: they are not directly correlated with financial markets, providing a hedge against market downturns.

Moreover, collectibles have an intrinsic value tied to their rarity, cultural significance, and aesthetic appeal, which can appreciate over time independently of market conditions.

The stability and growth potential of these assets make them attractive alternatives to traditional investment avenues, and investors are increasingly perceptive of these benefits.

As the market for collectibles continues to evolve, clients are likely to find new and exciting opportunities in this dynamic sector.

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.

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Piedmont on the move: rising stars under £1,000 a case

Piedmont Italy Fine Wine
  • Italy is the best-performing fine wine region year-to-date. 
  • Some Italian brands have recorded positive movement as high as 15% in the last six months.
  • Piedmont’s edge in the fine wine market can be attributed to historical significance, limited production, and an increase in global appreciation. 

Amid economic fluctuations and changing market trends, the wine investment landscape has seen varied performances across regions. However, Italy, and particularly the Piedmont, has stood out for its robustness and resilience, outperforming other regions in maintaining and even enhancing its investment appeal.

Italy’s performance in a bearish market

The Liv-ex Italy 100 sub-index, which tracks the price performance of the top 100 Italian wines, has shown resilience in the current bearish market. While the broader Liv-ex 1000 index, representing a wider range of global wines, has experienced a decline of 5.2% year-to-date, the Italy 100 sub-index has seen a relatively minor decrease of 1.7%. 

This indicates a sustained interest in Italian wines, despite broader market uncertainties. Some Italian brands have even recorded positive movement in the last six months as high as 15%.

The rising stars of Piedmont

A significant contribution to this trend comes from the Piedmont, specifically Barolo and Barbaresco. 

Produttori del Barbaresco, a renowned cooperative known for its high-quality production, has seen impressive gains across a range of its wines. The Rabaja Riserva has risen 15% since the start of the year. The wine has an average case price of £968 per 12×75, and a Wine Track critic score of 94 points. 

From the same producer, the more affordable Ovello Riserva is up 9%, while the Montestefano Riserva is up 8%. 

From Barolo, Cascina Fontana has shown consistent returns. It has appreciated 6% in the last six months and a remarkable 105% over the last decade. The wine’s affordability at £665 average price per case makes it a value-driven choice for investors.

Meanwhile, Elio Grasso’s Barolo Gavarini Chiniera has increased 4% in the past six months and an impressive 110% in the last decade. 

Why Italy, and why now?

The resilience of the Italian wine market, particularly in premium segments like Barolo and Barbaresco, can be attributed to several factors such as historical significance, quality, limited production, and growing global appreciation for the value on offer.

Wines from Piedmont are steeped in history and are globally recognised for their quality and complexity, attracting both connoisseurs and investors.

The limited production and exclusivity of certain labels ensure their demand remains high, even in less favourable economic conditions. While these wines are highly sought-after, the brands above continue to offer value – all being under £1,000 a case despite recent gains.

Finally, Italian wines continue to see growing appreciation in key markets such as the UK, USA and Asia, broadening the investor base.

As we navigate through fluctuating markets, Italy, especially Piedmont, holds firm, demonstrating potential for growth. For investors, Barolo and Barbaresco represent stability, quality, and a legacy that stands resilient against the tides of economic change.

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.

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Bordeaux En Primeur 2023: under pressure

Château Beychevelle Bordeaux 2023 En Primeur
  • Bordeaux 2023 largely met trade expectations for reduced pricing but only some releases have stood out as offering fantastic value. 
  • Price cuts slowed towards the end of the campaign, from 27.4% average discount in week one, to 23.3% in week four.  
  • Bordeaux’s ability to adapt does not only matter for its short-term sales but also for its long-term relevance in a highly competitive market.

Over the last month, our news coverage centered around the ongoing Bordeaux 2023 En Primeur campaign, examining critic scores and the investment potential of the new releases. 

Prior to the start of the campaign, Bordeaux châteaux faced considerable pressure from the trade to reduce release prices. Price cuts of around 30% were expected. In some cases, these expectations were met, with reductions of up to 40%. 

Now that the campaign is coming to a close, we weigh its success, considering the current state of Bordeaux’s investment market. 

En Primeur 2023 – back in vogue?

Critics of En Primeur contend that the system no longer meets buyer expectations, and the 2023 vintage wanted to rise to the challenge of defying the norm.

Partially it did. Wines like Lafite Rothschild, Carruades de Lafite, Mouton Rothschild, Petit Mouton, Beychevelle, Cheval Blanc and Haut-Brion delivered value and were met with high demand. 

Liv-ex reported immediate trades on its exchange for some of the releases. A developing secondary market is a positive sign for investors, although both Lafite Rothschild and Mouton Rothschild 2023 changed hands below their opening levels. 

According to Liv-ex, ‘it is clear there continues to be a market for Bordeaux En Primeur at the right price. What that price is, is perhaps less clear and will not always be agreed upon’.

The En Primeur golden rule  

For investors, an En Primeur release needs to be the most affordable wine among vintages with comparable scores to make sense. Where that isn’t the case, one should be cautious when buying. 

‘Our golden rule is the En Primeur price is the cheapest you can get. You can’t get anything cheaper. Generally speaking, it’s reasonably successful, not to say 100% successful, and then the price goes up.’ – Philippe Blanc, Château Beychevelle

‘En Primeur should be forever the lowest price you can find in your bottle. If you purchase later, it’s going to be more difficult to find and it’s going to be more expensive.’ – Pierre-Olivier Clouet, Château Cheval Blanc

The price decrease trajectory

The average price reduction among the top wines released in the first week of the campaign was 27.4%, going as low as 40% discount on the previous year.

In the fourth week of the campaign, this trajectory of offers slowed down. The average discount was reduced to 23.2%, the most significant being Château La Fleur-Pétrus 2023, down 33.6%, and the least significant, Beychevelle (-11.1%).

However, even though Beychevelle has seen one of the smallest discounts, it has still been one of the best value releases this campaign.

Beychevelle En Primeur 2023 Prices

The Bordeaux market slowdown

The pressure to reduce release pricing was largely owing to the current market environment. 

Over the past two years, Bordeaux prices are down 12%. Over the past five years, Bordeaux is one of the slowest growing markets, up 2.1%, considerably lagging behind Burgundy (25.2%), Italy (31.2%) and Champagne (45.5%). 

The market for top Bordeaux has suffered the most. First Growth prices are down 17.3% in the last two years, and 3.7% in the last five years.

Bordeaux En Primeur 2023 Prices

The region is also losing market share to its contenders. In 2023, Bordeaux accounted for 40% of the trade by value on Liv-ex compared to 60% in 2018.

This is further exacerbated by slowing demand. Liv-ex noted that today ‘there is more than three times as much Bordeaux for sale than the fine wine market is looking to absorb’.

The need to adapt

The 2023 En Primeur campaign has unfolded under the shadow of mounting pressure for Bordeaux to realign with market demands. The campaign highlighted the critical balance Bordeaux must maintain: offering wines at attractive prices for everyone in the chain. 

Successful examples from this year’s campaign, where price cuts coincided with high demand, underscore the potential for Bordeaux to adapt. However, the slower reduction rates towards the campaign’s end and varied responses from buyers reflect the ongoing debate about the optimal pricing strategy.

Ultimately, as Bordeaux grapples with these challenges, the 2023 En Primeur has underscored the importance of responsiveness to market dynamics. The region’s ability to adjust will not only determine its short-term sales but also its long-term relevance in a highly competitive and ever-evolving global wine market.

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. 

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WineCap’s Head of Content named in Harpers Wine & Spirit 30 under 30

Harper's Wine and Spirit 30 under 30 2024

Harpers Wine & Spirit‘s prestigious 30 under 30 list has been unveiled, showcasing the top talents in the UK wine trade. We are delighted to announce that our Head of Content, Desislava Lyapova, has been included in the rankings. 

The publication received over 100 nominations, ‘with each prospective star deserving recognition’ for their leadership, commitment, communication, innovation, and sustainability initiatives. Jo Gilbert of Harpers noted the industry’s challenges, highlighting the importance of the passion and talent that the nominees bring to their roles.

The judging panel is comprised of esteemed industry figures such as Katy Keating (Flint Wines), Kim Wilson (North South Wines), Michael Saunders (Coterie Holdings), Miles Beale (WSTA), Rachel Webster (WSET), Regine Lee MW (Indigo Wine), and Jo Gilbert (Harpers Wine & Spirit). To make the shortlist, the judges convened over two days in separate groups, with scores averaged out. 

Desislava Lyapova stood out as the only wine investment specialist on this year’s list. During her tenure at WineCap, Lyapova has significantly boosted subscriber numbers through her PR efforts and comprehensive research reports, including those focusing on wealth management in the UK and US.

Desislava Lyapova Harper's Wine and Spirit 30 under 30

On the announcement, Alexander Westgarth, CEO of WineCap, congratulated Lyapova on her achievement:

‘I want to give a huge congratulations to all the winners of the Harpers Wine & Spirit 30 under 30, especially our very own Desislava Lyapova. 

Desi has made a transformational impact at WineCap over the past two years. I can’t imagine anyone else who could have helped us achieve what she has. We are extremely proud to have Desi as a key member of our team.’

Before joining WineCap, Lyapova honed her skills as a Senior Writer at Liv-ex, the global marketplace for the wine trade. At WineCap, she has been pivotal in shaping the editorial direction, producing our Quarterly and Regional reports, leading En Primeur campaigns, and managing freelance and in-house teams, all the while enriching the content of the Academy and News sections.

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Bordeaux 2023 En Primeur: an overview of the current campaign

Cos d'estournel bordeaux wines
  • Three weeks into the Bordeaux 2023 En Primeur campaign, we examine the pricing trends of the releases so far.
  • In many cases, the current price cuts have highlighted the steady ascent of En Primeur release pricing in recent years.
  • The Bordeaux 2023 vintage is characterised by diverse critic scores and some high achievers.

This year’s Bordeaux En Primeur campaign kicked off early and rapidly gained momentum. The first 2023 releases landed in the last week of April, shortly after trade professionals had returned from the region and before the publication of most critic reports.

Pricing, as always, remained a central issue. Questions arose about whether châteaux would consider the current market conditions, whether anticipated price reductions would drive interest, and ultimately, whether the Bordeaux 2023 vintage would prove a worthy investment.

Three weeks into the campaign, several major châteaux, including First Growths like Haut-Brion, Mouton Rothschild, and Lafite Rothschild, have already launched their 2023 wines.

With most critic assessments now available and pricing trends becoming clearer, we delve into the details of the campaign so far.

Noteworthy releases

Château Léoville-Las Cases’ 2023 release marked a promising start to this year’s En Primeur. On April 30th, the wine was offered at a 40% discount on the previous year’s release. However, some older vintages still presented better value.

The first ‘great value’ release came from Château Lafite Rothschild in the same week. Its second wine, Carruades de Lafite, represented the lowest priced offering from the estate on the market today, playing on En Primeur’s original premise.

Similarly, Mouton Rothschild and Petit Mouton presented attractive opportunities for investors, released at 34.6% and 25.1% discounts on last year’s offerings respectively.

As a result, Liv-ex reported that both Château Lafite Rothschild 2023 and Château Mouton Rothschild 2023 have made their way onto the secondary market – although they have traded below their original release prices.

In many cases, the current price cuts have highlighted the steady ascent of En Primeur release pricing in recent years.

The average price cuts so far have been 21.5% compared to last year, with reductions ranging from 40% to none. Despite these cuts, many older vintages remain more affordable and often boast similar or better ratings, including those from 2019, 2017, and 2014.

Diverse scores and high achievers

The Bordeaux 2023 vintage has received a wide array of scores from leading critics, demonstrating a spectrum of quality across various appellations and estates.

Château Margaux consistently received high acclaim, with scores of 97-100 from both Antonio Galloni and William Kelley, and 99-100 from James Suckling. Neal Martin rated it as his second- highest wine of the vintage.

Another high achiever, Le Pin, received top marks with a perfect 100 from Peter Moser of Falstaff and 99-100 from Suckling. Château Montrose is also noteworthy, with a barrel range of 97-100 from Kelley and 99-100 from Suckling.

The critical consensus indicates a preference for wines from the Left Bank, which are noted to have fared better overall. The vintage is characterised by wines that lean towards a classic style, marked by their freshness and moderate alcohol content.

Despite the mixed nature of the vintage, there are several standout wines that show considerable promise. These wines are not only great for adding to a collection due to their potential to appreciate in value, but they also offer the kind of quality that makes them worth seeking out for those looking to enjoy fine wines in the years to come.

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.

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Risk tolerance in investing: the role of fine wine

  • Risk in investing refers to the potential for higher long-term rewards but also the possibility of losses.
  • High-risk investments can provide significant returns, but they also come with increased potential for losses.
  • Fine wine can be a low-risk investment with high growth potential and a hedge against inflation.

Understanding risk in investing

In the context of investing, risk signifies the potential variability of returns. It reflects the likelihood that the actual return on an investment may deviate from its expected return, which could mean either losing money or making more than anticipated.

Risk is usually calculated using statistical measures such as standard deviation and variance, which represent the degree to which an investment’s returns can vary from its average return. Greater variability implies higher risk and vice versa.

What does risk tolerance really mean?

Contrary to popular belief, risk tolerance is not about being an adrenaline junkie or being willing to lose all your money. It’s about your ability to endure potential losses in your investment portfolio without panicking or making rash decisions.

Risk tolerance depends on various factors, including your financial capacity to absorb losses, your investment goals, your time horizon (the length of time you plan to keep your money invested), and your emotional comfort with uncertainty and potential loss.

In long-term investments, it can actually be riskier for your wealth to invest solely in traditionally “low-risk” assets. This is because these assets may not provide the growth needed to achieve your investment goals, especially after accounting for inflation.

High-risk investments: high return or high loss?

High-risk investments experience significant price volatility, such as equities, commodities, high-yield bonds, and currencies. These usually have the potential to generate substantial returns; however, they can also lead to significant losses, including the entire amount invested in some cases.

While high-risk investments can be a part of a diversified portfolio, it is crucial to only invest money that you can afford to lose in these types of assets. And, most importantly, these investments should align with your risk tolerance.

Fine wine: a low-risk asset with high growth potential

Fine wine presents an intriguing investment prospect, particularly for those with a lower risk tolerance. As a tangible, finite asset, fine wine tends to appreciate with time and offers a level of stability that is often appealing to risk-averse investors.

Moreover, fine wine has shown high growth potential, with certain wines appreciating significantly over time. Some of the best investments in the last five years have been Prieure Roch Vosne-Romanee Le Clos Goillotte (588%), Egly-Ouriet Brut Millesime Grand Cru (340%) and various wines from Domaine Leroy and Domaine Arnoux-Lachaux. Similarly, the fine wine regions that have seen the highest return on average in the last semi-decade have been Champagne (69.9%) and Burgundy (35.5%).

Our Wine Track tool allows you to explore the best performing wines over different time frames, the price point upon which they are available, and their average critic score.

Understanding risk and your personal risk tolerance is essential in making sound investment decisions. Whether it’s high-risk or low-risk assets, or a combination of both, the key is to align your investments with your personal risk tolerance and financial goals. With its unique attributes, fine wine offers an exciting avenue for those seeking lower-risk investments with substantial potential returns.

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.

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The role of technology in fine wine investment: From blockchain to AI

tech and wine
  • Technology has revolutionised various aspects of the wine trade, from ensuring provenance to streamlining valuations.
  • From blockchain to AI and data analytics, these advancements can improve transparency and efficiency.
  • Wine investment tools like Wine Track help investors spot opportunities and discover relative value.

In the rapidly evolving landscape of fine wine investment, technology has emerged as a transformative force, revolutionising various aspects of the industry. From verifying provenance to streamlining valuation processes, advancements such as blockchain and artificial intelligence (AI) have played a crucial role.

This article explores the impact of technology on fine wine investment, delving into blockchain-based provenance verification, AI-driven wine valuation, and digital marketplaces that are shaping the industry’s future.

Blockchain-based provenance verification

One of the significant challenges in the fine wine market is verifying the authenticity and provenance of bottles. Counterfeit wines can undermine investor confidence and erode market trust.

However, blockchain technology has emerged as a powerful tool to address this issue. By creating a decentralised and immutable ledger, blockchain allows for the transparent recording of a wine’s journey from vineyard to consumer.

Each transaction and transfer of ownership can be documented, ensuring a reliable and verifiable record of a wine’s provenance. This technology provides investors with greater confidence in the authenticity and quality of their investments.

However, applying blockchain to tangible assets like wine has some complexities. Unlike virtual transactions, the wine trade involves physical goods with unique characteristics and specific storage requirements. Bottles can be removed from cases, stored improperly, and tax status may vary, posing challenges for a fully distributed ledger system. Despite the existing challenges, blockchain holds significant potential in creating a more secure and trustworthy wine trade ecosystem.

AI-driven wine valuation

Accurate and reliable wine valuation is essential for investors seeking to make informed decisions. AI-powered tools and algorithms are transforming the wine valuation process, leveraging vast amounts of data to generate precise and timely assessments.

By analyzing factors such as vintage, producer, critic ratings, market trends, and historical sales data, AI algorithms can provide sophisticated valuation models. These models offer investors insights into the potential appreciation or depreciation of specific wines, enabling more informed investment strategies.

Digital marketplaces

Digital marketplaces have disrupted traditional fine wine trading by providing a platform that connects buyers and sellers in a transparent and efficient manner. These platforms leverage technology to facilitate secure transactions, streamline logistics, and expand the reach of the market.

Online marketplaces allow investors to access a global network of fine wines, enabling diversification and providing a more extensive selection to choose from. Additionally, these platforms often offer tools for researching wines, comparing prices, and tracking market trends, empowering investors with valuable information to make informed investment decisions.

Fine wine investment tools

One free tool that helps investors is Wine Track. Wine Track is a comprehensive fine wine index that enables investors to identify investment grade wines, spot trends and wine investment opportunities.

The tool uses daily wine price data from multiple sources, tracking over 75,000 investment grade wines. It indexes the prices of multiple vintages of a given wine, and aggregates critics’ scores, to provide a clear overview of a wine’s investment track record.

The tool also highlights the best and worst performing wines over different time periods, and includes a ‘price per point’, which is a clear indicator of relative value to help investing in wine.

Wine Track

Data analytics for market insights

Data analytics has become crucial in fine wine investment, offering investors valuable insights into market trends and patterns. By analyzing vast amounts of data from multiple sources, including auction results, critic ratings, and global demand patterns, investors can gain a deeper understanding of market dynamics.

Data-driven insights enable investors to identify emerging investment opportunities, track the performance of specific wines or regions, and make informed decisions based on historical market trends.

Technology has significantly influenced the landscape of fine wine investment, providing investors with enhanced transparency, efficiency, and analytical capabilities. Digital traceability ensures wines reach the right hands, while AI-driven wine valuation leverages data analytics to generate accurate and timely assessments, guiding investment decisions. As the wine trade continues to adapt the latest technology, investors will be able to navigate the market with greater efficiency and confidence.

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.

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Banking failures and the fine wine market: Performance during economic uncertainty

Banking crisis
  • The US banking crisis has been the biggest since the 2008 financial crisis and has created uncertainty in mainstream markets.
  • Revisiting key moments in the history of fine wine investment offers valuable insight into the future of the market.
  • A key difference between fine wine and equities during the last financial crisis was the speed of recovery.
  • The fine wine market is braced for challenges due to its diversity as the performance of different wines and vintages can balance a portfolio.

The recent banking failures have been the biggest since the 2008 financial crisis. Since the beginning of March, regulators have shut down three mid-size US banks – Silicon Valley Bank, Signature Bank and First Republic. In Europe, Swiss giant Credit Suisse was rescued in an emergency deal with rival UBS, which purchased it at a fraction of its closing market value. UBS itself suffered losses during the acquisition – it slid 13% before making a recovery.

While the news echoes the last financial crisis, governments have been providing reassurance that this is not history repeating itself. The current turmoil is partly down to the sharp increase in interest rates, which was aimed to curb inflation.

Still, the banking collapse has had an immediate effect on investor confidence and mainstream markets. European bank shares remain volatile, while US stock markets opened flat this week. Alternative assets and safe havens such as gold and treasuries have enjoyed a boost, as investors have been considering low-risk assets to put their money.

Reflecting on how the fine wine market has performed during previous challenging macroeconomic events could offer valuable insights into what to expect in the current uncertain environment.

The fine wine market during the 2008 financial crisis

Like other markets, fine wine experiences cycles.

fine wine performance

During the previous financial crisis, the fine wine market suffered a downturn, but it fared better than some other traditional investments such as equities and real estate. Between June 2008 and June 2009, the Liv-ex 100 index, which was heavily weighted towards wines from Bordeaux, fell 18.8%.  Meanwhile, the broader Liv-ex 1000 index, which includes greater number of wines from other regions, dipped 7.4%.

The Knight Frank Luxury Investment Index, which tracks the performance of luxury assets including fine wine, recorded similar figures, with the value of investment-grade wine declining 15% in 2008. By comparison, the S&P 500, a benchmark index of US equities, fell over 37% the same year.

A key difference between fine wine and equities during the financial crisis was the speed of recovery. While the stock market took several years to recover to its pre-crisis levels, the fine wine market turned bullish relatively quickly. By the end of 2009, investment-grade wine had returned to its pre-crisis levels, and by 2010, it had surpassed its previous peak.

Moreover, the performance of fine wine during the financial crisis varied between different regions and vintages. While the Bordeaux market was hit particularly hard, Burgundy and the Rhône performed relatively well.

The fine wine market – braced for challenges

The fine wine market of today looks very different from the shape it had fifteen years ago. There are more investable wines than at any other point in history. If Bordeaux accounted for 90% of the market in 2008, today its share sits at 35%, due to the emergence and the proven investment potential of wines outside this dominant French region.

The diversity of this portfolio diversifier has helped it get through swiftly through other more recent challenges, such as Donald Trump’s 25% tariffs on most European wines, and the Covid-19 pandemic.

For instance, Italy and Champagne, which were exempt from the US tariffs, enjoyed steady price appreciation in 2019, while Burgundy suffered. Throughout and after the pandemic, Burgundy and Champagne turned into the top-performing regions.

California also enjoyed rising prices in 2021, and its index hit an all-time high in September last year.

Bordeaux has been moving quietly and steadily, and its relatively mild performance over the last five years has turned it into a region that can offer value for money, especially in ‘off’ vintages.

regional fine wine investment

Factors influencing the performance of fine wine

The fine wine market is different from other markets and operates with its own dynamics, such as rarity and exclusivity. Its unique characteristics make it less vulnerable to market shocks and economic downturns than financial markets.

Indeed, its historic performance has shown very low correlation to mainstream markets. As a tangible good that cannot be traded as quickly as stocks, fine wine is generally insulated from rapid price changes.

In general, prices move based on supply and demand, critics’ scores, vintage quality, age and brand appeal. Find out more about fine wine investment here, or explore the performance of individual brands on Wine Track.

 

WineCap’s 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.