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Fine wine vs crypto? History, volatility and market returns

Bitcoin cyrpto currency versus fine wine as an asset
  • Fine wine offers steady, long-term growth with controlled price fluctuations, while Bitcoin’s extreme volatility presents both high-risk and high-reward opportunities.
  • Fine wine’s centuries-old market is supported by scarcity, provenance, and established ecosystems, contrasting Bitcoin’s shorter, speculation-driven history.
  • Fine wine appeals to risk-averse investors seeking diversification, while Bitcoin caters to those pursuing rapid investments.

Bitcoin has recently captured investment interest as it surged past the $100,000 (£80,000) benchmark for the first time in December last year, up from $45,000 (£36,000) at the beginning of 2024. With its meteoric rise fuelled by regulatory approvals for cryptocurrency exchange-traded funds and mostly the results of the US presidential election, Bitcoin demonstrated its ability to deliver unparalleled gains. Yet, crypto remains a high-risk asset defined by dramatic volatility. From its genesis in 2009, Bitcoin has seen multiple boom-and-bust cycles, with price swings of over 50% in both directions within a single year not uncommon. 

By contrast, fine wine represents a markedly different asset class, appealing to those who prioritise stability and long-term appreciation. The fine wine market has a storied history spanning centuries, with values driven by scarcity, provenance, and global demand rather than speculative hype. While prices in the fine wine market can fluctuate, they tend to avoid the extreme volatility seen in cryptocurrencies. Instead, they enjoy steady growth that outpaces inflation and provides a reliable hedge against economic uncertainty.

Volatility

Bitcoin’s price chart tells a story of rapid ascents and precipitous falls. For example, its 2017 bull run saw prices climb from £800 ($1,000) to nearly £16,000 ($20,000) only to crash to £2,400 ($3,000) the following year. Similar patterns occurred in 2021 and again in 2024, leaving investors questioning when the next downturn might strike.

Fine wine, on the other hand, avoids such dramatic shifts. Prices typically rise or fall within a controlled range, supported by consistent demand from collectors and investors worldwide.

Historical context

Cryptocurrencies are a product of the digital age, with Bitcoin gaining widespread attention only over the past decade. Its rise has been driven by speculative interest, technological innovation, and the allure of decentralisation. However, its short history leaves it vulnerable to regulatory uncertainties, technological disruptions, and shifting investor sentiment.

Fine wine, conversely, boasts a legacy that stretches back centuries. Iconic regions like Bordeaux, Burgundy, and Tuscany have long been synonymous with quality and value. Investments in fine wine are supported by an established ecosystem of producers, merchants, and auction houses. This historical grounding provides a level of security that new asset classes like cryptocurrency struggle to match.

Market performance

One of the defining features of fine wine as an investment is the importance of regional performance. For instance, Burgundy has risen 550% on average over the last twenty years, with some wines achieving returns of over 1,500%. 

The world of fine wine has its own higher risk and higher return investments but it also offers a range of reliable long-term performers. This is why building a fine wine portfolio requires expertise and careful curation. A well-diversified portfolio includes big brands but also undervalued wines and vintages from a variety of regions which can see their value rise based on demand, critic scores, age or other intrinsic factors. 

Liquidity: fast vs steady

Liquidity is another key difference between fine wine and crypto. Bitcoin can be bought and sold 24/7 on global exchanges, making it one of the most liquid investments available. However, this liquidity can exacerbate price swings, with significant moves often triggered by news events or changes in market sentiment.

Fine wine, while less liquid, offers a more controlled market environment. Secondary sales typically occur through investment companies and trading platforms, with prices reflecting a stable and growing investor base. This slower pace can be an advantage for investors seeking to avoid speculative bubbles.

Diversification and portfolio strategy

In today’s investment landscape, fine wine and cryptocurrency appeal to very different investor profiles. Bitcoin caters to those seeking high-risk, high-reward opportunities, while fine wine offers steady, long-term growth and diversification. Incorporating both into a portfolio can provide balance, but the emphasis should align with an investor’s risk tolerance and financial goals.

Fine wine also underscores the importance of expertise. A portfolio focused on iconic regions and proven vintages can deliver strong returns, with minimal exposure to the broader market’s ups and downs. As seen in the market of 2024, the best-performing wines relied on deep knowledge of regional trends and intrinsic dynamics.

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 evolution of Bordeaux’s vineyard prices: what’s behind the price tag?

Pauillac Bordeaux vineyards
  • Vineyard prices in Pauillac have risen over 700% in the last 30 years.  
  • Sauternes has faced a 90% decline during the same period. 
  • Pomerol has significantly outpaced Saint-Émilion, partly due to its compact size and luxury appeal.

The American Association of Wine Economists has released data on the evolution of Bordeaux vineyard prices from 1991 to 2023. Over this period, Bordeaux has become the centrepiece of a thriving, regulated wine investment market.

Global demand for Bordeaux wines has fueled remarkable growth, with top estates achieving iconic status as luxury brands. A 2011 valuation revealed that over 50 of Bordeaux’s leading châteaux belong to the €50 million club, with a combined market value exceeding €15 billion.

In the past two decades, Bordeaux fine wine prices have risen by an average of 200%, accompanied by significant increases in vineyard prices in its most sought-after appellations.

This article delves into the shifting dynamics of Bordeaux’s wine industry, examining their impact on vineyard prices and the contrasting trajectories of key sub-regions like Pauillac, Sauternes, Pomerol, and Saint-Émilion.

American Association of Wine Economists Bordeaux vineyard prices

Pauillac’s extraordinary growth

Pauillac’s vineyard prices have experienced extraordinary growth over the past three decades, surging by 700.6% from €374,700 per hectare in 1991 to €3 million in 2023. The region is home to the First Growths Lafite Rothschild, Latour, and Mouton Rothschild.

When compared to other regions, Pauillac’s relatively small size – spanning approximately 1,200 hectares under vine – is a key factor contributing to its high vineyard prices. This limited vineyard area, combined with the prestige of its châteaux, creates a scarcity effect that drives up demand and valuation. Despite its compact footprint, Pauillac has managed to consistently dominate the fine wine market.

The rise of Pauillac aligns with the global increase in demand for fine Bordeaux wines, particularly during the 2000s and early 2010s, when new markets like China became major consumers. However, this growth has slowed in recent years. This could stem from market saturation, with collectors shifting their attention to other Bordeaux appellations or entirely different regions such as Burgundy and Champagne. 

The decline of Sauternes

In stark contrast to Pauillac, Sauternes has suffered a decline, losing nearly 90% of its vineyard value since 1991. Once valued at €293,000 per hectare – higher than Saint-Émilion at the time – Sauternes vineyards are now priced at around €30,000 per hectare, according to AAWE. This fall can largely be attributed to waning consumer interest in sweet wines.

The production costs associated with Sauternes, which involve the labour-intensive process of harvesting botrytised (noble rot) grapes further compound the issue. While top producers like Château d’Yquem continue to uphold the region’s reputation, the broader market for Sauternes is facing challenges due to changing consumer preferences.

Pomerol and Saint-Émilion: a tale of two trajectories

Pomerol and Saint-Émilion present an interesting comparison, with Pomerol emerging as a high-growth luxury niche and Saint-Émilion maintaining steady performance. From 1991 to 2023, Pomerol vineyard prices rose by 213.4%, reaching €2 million per hectare, while Saint-Émilion saw only a modest 14.7% increase to €300,000 per hectare. These differences can be explained by several key factors.

  1. Size and scale

Saint-Émilion spans a vast 5,400 hectares, compared to Pomerol’s much smaller 800 hectares. This sheer scale means Saint-Émilion includes a wide range of producers, from elite châteaux like Cheval Blanc and Ausone to lesser-known estates producing more affordable wines. In contrast, Pomerol’s compact size results in a higher concentration of prestigious vineyards, with fewer smaller players to dilute its overall market perception.

  1. Classification systems

Saint-Émilion’s classification system – updated every decade – categorises its estates into tiers such as Premier Grand Cru Classé A and B, and Grand Cru Classé. However, the frequent use of the “Grand Cru” designation (applied to over 60% of the region’s wines) might work against it, and partly diminish the exclusivity of this title.

Conversely, Pomerol lacks any formal classification system, allowing individual estates like Pétrus and Le Pin to dominate through their reputations alone. This lack of stratification has paradoxically bolstered the region’s image as a luxury appellation. Its reputation as a source of small-production, Merlot-dominant wines has further cemented its status as a ‘cult’ appellation among collectors and investors. 

  1. Smaller players and price dilution

Saint-Émilion’s large number of smaller, lesser-known producers contributes to its lower average vineyard price. These producers often operate outside the Grand Cru Classé system, pulling down the overall valuation of the region. In Pomerol, the scarcity of vineyards and the dominance of high-profile estates create a ‘halo effect’ that supports consistently high valuations, even for lesser-known properties.

Implications for the wine investment market

The contrasting trajectories of Bordeaux’s appellations highlight the complexity of the fine wine investment market. Pauillac’s recent plateau demonstrates that even the most prestigious regions are not immune to market saturation, while Pomerol’s steady growth underscores the enduring appeal of scarcity and exclusivity. In contrast, Sauternes illustrates the vulnerability of regions reliant on shifting consumer preferences. However, renewed efforts by producers to embrace sustainability, innovation, and rebranding may help revive interest in sweet wines and mitigate some of these challenges.

Despite fluctuations, Bordeaux’s iconic estates and global reputation remain a cornerstone of the fine wine market. For investors and collectors, navigating the nuanced landscape of vineyard prices and evolving market dynamics will be crucial to securing long-term success in this ever-changing industry.

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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Older vintages dominate 2024’s best-performing wines

Domaine Pegau wine bottle
  • The biggest price risers in 2024 reveal a strong preference for older vintages.
  • The best-performing wine came from the Rhône, having risen 80.5% in value year-to-date.
  • Tuscany, Ribera del Duero, Bordeaux and Sauternes also featured in the rankings.

The biggest price risers in 2024 reveal a strong preference for older vintages, underlining the importance of time in achieving wine investment returns.  

The Rhône leads performance

Although Rhône prices declined 9.9% on average this year, the region gave rise to some of the best-performing wines.

Domaine Pegau Châteauneuf-du-Pape Cuvée Réservée Rouge 2013 led the charge with an impressive 80.5% rise. Other regional standouts, including Clos des Papes Châteauneuf-du-Pape Rouge 2014 (61.2%) and Château de Beaucastel Rouge 2013 (31.1%), highlighted the enduring demand for Châteauneuf-du-Pape from highly rated mature vintages.

Highlights from Spain and Italy

While the Rhône claims several top spots, other regions also showcase the profitability of mature vintages. From Spain, the 2010 Vega Sicilia Unico achieved a notable 24.9% increase. Known for its high quality and limited production, Vega Sicilia continues to represent Spanish winemaking at its finest, cementing its status as a blue-chip investment wine.

Italy made a strong appearance with the 2014 Fontodi Flaccianello delle Pieve, which has risen 6.8% in value. This Tuscan gem, crafted from 100% Sangiovese, reflects the growing international appeal of Italy’s finest wines. Collectors are increasingly drawn to Italy not only for its iconic producers but also for its remarkable balance of accessibility and age-worthiness.

Top performing wines of 2024

Bordeaux’s resilience

No fine wine discussion is complete without Bordeaux, and 2024 is no exception. While price growth among Bordeaux wines in this dataset may be more modest, the region’s consistency remains its hallmark. The 2013 Ducru-Beaucaillou saw a solid 19.2% increase, while the 2012 Chateau L’Eglise-Clinet also featured among the top performers. 

Two Château Rieussec vintages, the 2015 and 2014, reflected Sauternes’ consistent market performance, although the category is often overlooked.

The allure of maturity

The unifying thread across these top-performing wines is their maturity. Each wine has benefited from time in the bottle, allowing its market value to increase. Mature vintages offer an enticing combination of drinking pleasure and investment potential, a dual appeal that drives demand among collectors and investors alike.

This preference for older wines reflects a broader trend within the fine wine market: a growing appreciation for provenance and readiness to drink. As global markets for fine wine continue to mature, buyers are prioritising wines with a proven track record, both in terms of quality and price appreciation.

What this means for investors

The list of the best-performing wines of 2024 shows the importance of patience and long-term approach when it comes to investing. Additionally, diversification across regions and styles can help mitigate risk and enhance returns.

The performance of these wines provides a clear takeaway: older vintages remain at the forefront of the fine wine market. 

For more read our latest report “Opportunities in uncertainty: the 2024 fine wine market and 2025 outlook”.

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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Report – Opportunities in uncertainty: the 2024 fine wine market and 2025 outlook

Executive summary

  • Q4 was marked by political developments, changing economic policies, and geopolitical events, including the re-election of President Trump.
  • The strengthened US dollar boosted fine wine demand across the pond.
  • Fine wine prices fell 11% across major regions in 2024, reflecting a continued market correction. 
  • Italy was the most resilient fine wine region, while Burgundy experienced the biggest adjustment.
  • Rhône wines dominated the list of the best performing wines in 2024, with Domaine Pegau Cuvée Réservée Rouge 2013 leading (80.5%).
  • Older vintages (2010-2014) performed well, reflecting the market’s preference for mature, proven wines, while new releases struggled when not priced correctly.
  • Optimism for market recovery is focused on premium regions like Piedmont, Champagne, and Burgundy.
  • Economic uncertainties and mixed performance in Bordeaux are expected to persist, but continued interest in fine wine signals resilience and potential for long-term growth.

Q4 in context: political and economic drivers

It has been an eventful quarter, marked by political developments, changing economic policies, and geopolitical events. The re-election of President Donald Trump in November prompted a rapid response in global markets. US equities reacted positively to the outcome, as investors anticipated business-friendly policies and potential fiscal stimulus, particularly benefiting sectors like manufacturing and technology. However, concerns over increased tariffs created uncertainties for multinational corporations.

Rising US Treasury yields, driven by expectations of future interest rate hikes, attracted capital inflows, strengthening the US dollar. While this reinforced investor confidence in U.S. economic policies, it also raised concerns about higher borrowing costs and their potential drag on economic growth. Emerging market currencies faced downward pressure as fears of US trade measures and capital outflows grew.

In late November, a US-France-brokered ceasefire between Israel and Hezbollah took effect, reducing immediate geopolitical risks after over a year of hostilities. Despite the agreement, markets remained cautious, keeping a close watch for potential disruptions to the fragile stability.

Markets in 2024: the year that was

Bitcoin made headlines this month by surpassing the $100,000 mark for the first time, peaking at an all-time high of $104,000 on Coinbase. The surge was fuelled by growing investor optimism around a favourable regulatory environment under President-elect Donald Trump, who has signalled support for cryptocurrencies through key appointments and policy proposals.

Equity markets have also enjoyed a strong year, bolstered by a resilient US economy and easing inflation pressures. These conditions have allowed central banks to pause or slow rate hikes. Strong corporate earnings, particularly in the technology and AI sectors, have further propelled the S&P 500’s stellar performance.

The global energy market in 2024 has experienced notable fluctuations. Concerns over a potential global economic slowdown, driven by weak demand from China and other developed economies, have weighed on crude oil prices. While OPEC’s production cuts have provided some price support, they have not been sufficient to fully offset the impact of declining demand.

Meanwhile, gold has reaffirmed its role as a safe-haven asset in 2024. Persistent geopolitical tensions, inflation concerns, and financial market volatility have driven demand for the precious metal, supporting its strong performance throughout the year.

Market performance in 2024

*Current values: 06/12/2024

The fine wine market in 2024

The fine wine market in 2024 continued its downward trajectory from 2023, with broad declines across major indices. The Liv-ex 100 has fallen 9.2% year-to-date, while the Liv-ex 50, which tracks First Growth Bordeaux, is down 10.9%.

Despite these overall declines, the market showcased notable regional disparities and emerging opportunities. Examined at more length in the following section, Italy has been a beacon of resilience, while ‘overheated’ regions like Burgundy have readjusted.    

Notably, prices did not fall because of lower demand for fine wine. Market activity remained high, with the number of fine wine trades in 2024 surpassing 2023 by 7.9%. 

Regional fine wine performance

Regional fine wine indices performance in 2024

The fine wine market saw mixed performances as the year drew to a close. Italy stood out as the most resilient region, with prices falling 6% – a fraction of the 11.1% average decline in the Liv-ex 1000 index. High-scoring releases buoyed Italy’s secondary market, while diverse offerings such as Antinori Brunello di Montalcino Vigna Ferrovia Riserva (38%) underscored the country’s stability and value. Italy’s growing influence was evident in the 2024 Power 100 rankings, where it claimed 22 spots – nine more than last year – closing the gap on Burgundy and Bordeaux in terms of investor interest and price performance.

Burgundy has faced the greatest readjustment among all regions, with prices declining by 14.4% year-to-date. This correction followed years of meteoric growth and reflects a market adjustment as prices recalibrate. The decline has created opportunities for investors to acquire rare and prestigious labels at more accessible prices. Burgundy’s reputation as a cornerstone of fine wine investment remains intact despite this year’s setbacks, with long-term demand likely to persist.

Champagne also experienced a challenging year, with prices falling 9.8%. However, the region showed signs of stabilisation toward the end of the year. Older vintages led this recovery, with labels such as Taittinger Brut Millesime up 29%, signalling enduring interest in high-quality, aged Champagne. 

Bordeaux, the largest and most liquid fine wine region, saw an 11.3% decline. Liquidity remains Bordeaux’s strength, but it no longer guarantees safety in today’s market. Recent vintages in particular have struggled, with many trading below their release prices. 

California wines fell 8.6% but showed positive momentum in November. The region’s growing presence in the fine wine investment space has been driven by the rising popularity of brands like Dominus, Joseph Phelps, and Promontory.

Spanish wine also benefitted from surging US demand, with Vega Sicilia Unico taking the top spot as the most powerful fine wine brand in 2024. Two other Spanish wines also made the rankings – Dominio de Pingus and R. Lopez de Heredia – a testament to Spain’s growing investment potential.  

The best-performing wines in 2024

Top-performing wines of 2024

The Rhône dominated this year’s top-performing wines, claiming four of the ten spots on the list. Domaine de Pegau Cuvee Reservee Rouge 2013 led the charge with an impressive 80.5% rise. Other regional standouts, including Clos des Papes Châteauneuf-du-Pape Rouge 2014 (61.2%) and Château de Beaucastel Rouge 2013 (31.1%), highlighted the enduring demand for Châteauneuf-du-Pape from highly rated, older vintages.

Beyond the Rhône, Spain’s Vega Sicilia Unico 2010 (24.9%) showcased the strength of Ribera del Duero as a rising force in the wine investment market. Vega Sicilia also ranked as the most powerful wine brand in the 2024 Power 100 rankings. 

Bordeaux and Sauternes also featured. Château Rieussec took two spots with its 2015 (10%) and 2014 (7.2%) vintages. Meanwhile, Ducru-Beaucaillou 2013 (19.2%) and Château L’Eglise-Clinet 2012 (3.9%) showed that Bordeaux’s established names have continued to attract investment interest where there has been value on offer.

A clear trend this year was the strong performance of older vintages, with wines from 2010 to 2014 dominating the list. Only two ‘younger’ vintages, 2015 and 2019, appeared on the list and no new releases. This aligns with a broader preference for mature wines, which offer proven track records and immediate drinkability.

2024 takeaways

The market downturn has presented opportunities to acquire premium wines at more accessible price points, offering a chance to diversify portfolios with an asset known for its historically strong long-term performance.

For another year, Bordeaux En Primeur struggled to attract significant interest with the release of the 2023 vintage, especially for wines where older proven vintages offered better value. Economic uncertainty further highlighted the appeal of the classics. Iconic Bordeaux vintages – such as 2000, 2005, and 2009 – and Italy’s Super Tuscans stood out as stable investment options. These wines offered a combination of historical performance and consistent demand, reinforcing their status as cornerstone assets in fine wine portfolios.

Declining prices also brought rare and prestigious wines back into circulation, offering investors the chance to secure assets that were previously inaccessible. This period allowed for strategic acquisitions of iconic labels at attractive price points, setting the stage for potential long-term gains as the market stabilises.

Below the surface of the downturn, 2024 presented great buying opportunities, making it a pivotal year for investors, whether looking to enter the market or enhance their existing portfolios.  

2025 market outlook

The 2025 fine wine market outlook is cautiously positive, driven by optimism for premium regions such as Piedmont, Champagne, and Burgundy. Insights from the 2024 Golden Vines Report show that 64% of industry professionals anticipate market growth, particularly for high-end Italian wines like Barolo and Barbaresco, which are increasingly viewed as alternatives to Burgundy.

Key trends include rising demand for sustainability and terroir-driven wines. According to the report, Piedmont (20%) leads in growth potential, followed by Champagne (17%), Burgundy (14%) and Tuscany (12%), while Bordeaux faces mixed prospects, with 27% of the respondents expecting further declines. Challenges like economic pressures and geopolitical uncertainties persist but continued strong fine wine demand signals resilience in the market.

Fine wine remains the most popular collectible celebrated for its diversification benefits, sustainability and stability through different market environments.

Stay tuned for our 2025 Wealth Report, which will examine wealth and investment managers’ views and sentiments towards fine wine early next year.

See also – WineCap Wealth Report 2024: UK Edition

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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Mouton Rothschild: 2022 label and market performance

Mouton Rothschild 2022 wine bottle label
  • The 2022 Mouton Rothschild label has been revealed. 
  • Mouton Rothschild is the best performing First Growth over the last decade. 
  • The wine has also outperformed the Liv-ex 100 and Bordeaux 500 indices.

Unveiling the 2022 label

Bordeaux First Growth Château Mouton Rothschild revealed its 2022 label design on December 1st.  Created by French artist Gérard Garouste, the original artwork commemorates the 100th anniversary of Baron Philippe de Rothschild’s leadership at the family estate. 

The label showcases the château’s iconic front wall and a grapevine, elegantly framed by a portrait of Philippe de Rothschild and a ram, his signature emblem.

The tradition of artist-designed labels began in 1945, when Baron Philippe de Rothschild marked the end of World War II with a special artwork featuring a ‘V’ for victory, designed by Philippe Jullian.

As previously explored, this practice has significantly enhanced Mouton Rothschild’s collectability, and the wine’s value has typically risen in the month following the label reveal. 

Mouton Rothschild 2022 wine bottle label

Mouton Rothschild: ahead of the pack

While the artist designed labels alone are not the key drivers of Mouton Rothschild’s investment performance, the wine does lead the way among its peers. It is the best performing First Growth over the last decade. 

Mouton Rothschild prices have risen 50.3%, compared to 42.3% for Margaux and 36.9% for Haut-Brion. Both Lafite Rothschild and Latour have increased by close to 30% over the same period.

Bordeaux First Growths Wine chart

From the market’s low in June 2014 to its peak in September 2022, Mouton Rothschild recorded a 76% increase. It was the first First Growth to recover from the correction following the China-driven wine boom. 

During the recent market downturn, Mouton Rothschild has exhibited relative resilience. Prices have fallen 13.8% since its peak. Only Haut-Brion has seen a smaller decline of 13.1%. The biggest faller has been Lafite Rothschild, down 22.8% since September 2022. 

Mouton Rothschild and the broader market

Mouton Rothschild is also nicely positioned in the broader wine investment market. It has outperformed the industry benchmark, the Liv-ex 100 index, which is up 40.9% over ten years. It has also fared better than the Liv-ex 50 (17.5%), which tracks the price movements of the First Growths, and the broader Bordeaux 500 index (27.8%).

Mouton Rothschild performance

Mouton Rothschild has demonstrated consistent strength in the fine wine market, supported by its established history and strategic positioning. The estate’s practice of commissioning artist-designed labels has enhanced its collectability, strengthened by its reputation for quality.

The release of the 2022 label marks another milestone in the estate’s history. Mouton Rothschild’s performance, both in terms of relative resilience during market downturns and long-term growth, highlights its role as a reliable component in a well-diversified wine investment portfolio.

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 wine investment regions in 2024

Super Tuscan wine region Italy
  • Italy’s market performance has been the most resilient across all fine wine regions.
  • Burgundy prices have fallen the most in the last year. 
  • Champagne is showing consistent signs of recovery.  

The market downturn has affected all fine wine regions, arguably making it a great time to invest while prices are low. Today we take a deep dive into the performance of individual regions – identifying the most resilient markets, the best opportunities, and the regions offering the greatest value.

Italy: the most resilient market

Prices for Italian wine have fallen 4.1% in the past year – less than all other fine wine regions. By comparison, fine wine prices have fallen 11.6% on average, according to the Liv-ex 1000 index. 

Italy’s secondary market has been stimulated by high-scoring releases, like Sassicaia and Ornellaia 2021. Beyond the Super Tuscans, which are some of the most liquid wines, the country continues to offer diversity, stable performance and relative value. 

Some of the best-performing wine brands in the last year are Italian – all with an average price under £1,300 per 12×75, like Antinori Brunello di Montalcino Vigna Ferrovia Riserva (£1,267, +38%).

Other examples under £1,000 per case include Le Chiuse Brunello di Montalcino (+28%), Gaja Rossj-Bass (+27%), and Speri Amarone della Valpolicella Classico Monte Sant Urbano (+25%).

Regional wine indices chart

Burgundy takes a hit

Burgundy’s meteoric rise over the past two decades made it a beacon for collectors, but its steep growth left it vulnerable to corrections. In the past year, Burgundy prices have fallen 14.7%, making it the hardest-hit region. This downturn has released more stock into the market, creating opportunities for investors to access wines in a region often defined by scarcity and exclusivity.

Wines experiencing the largest declines include include Domaine Jacques Prieur Meursault Santenots Premier Cru (-41%), Domaine Arnoux-Lachaux Nuits-Saint-Georges (-35%), and Domaine Rene Engel Clos de Vougeot Grand Cru (-28%). For new entrants, these price drops offer a rare chance to acquire prestigious labels at relatively lower costs.

Champagne: on the road to recovery

Champagne has changed its trajectory over the last year: from a fast faller like Burgundy to more consistency and stability. While prices are down 10.6% on average, the dips over the last few months have been smaller than 0.6%. The index also rose in February and August this year, driven by steady demand. 

Some of the region’s most popular labels have become more accessible for buyers like Dom Perignon Rose (-14%), Philipponnat Clos des Goisses (-13%) and Krug Clos du Mesnil (-12%).

Meanwhile, the best performers have been Taittinger Brut Millesime (+29%) and Ruinart Dom Ruinart Blanc de Blancs (+28%), which has largely been driven by older vintages such as the 1995, 1996 and 1998.

The fine wine market in 2024 reflects a unique moment of transition. Italy’s resilience, Burgundy’s price corrections, and Champagne’s recovery illustrate a diverse set of opportunities for investors. With prices across the board at lower levels, this could be an ideal time to diversify portfolios with high-quality wines from these regions, anticipating long-term growth as the market stabilises.

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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How to build a diversified fine wine portfolio

Fine wine investment portfolio
  • A diversified wine portfolio spreads the risk across different wines and regions.
  • Each wine region has its own unique characteristics, and its performance is largely influenced by its own market dynamics.
  • Investors can also diversify their portfolio by vintages, including older wines for stability and new releases for growth potential. 

Fine wine is a popular investment for those seeking diversification and long-term growth. However, like any investment, building a successful fine wine portfolio requires strategic planning and a thorough understanding of the market.

This article explores key strategies for creating a balanced, diversified fine wine portfolio, and why it is important to include a variety of regions, brands and vintages.

Why diversification is key

As renowned economist Harry Markowitz put it, ‘diversification is the only free lunch in finance’. 

Diversification is fundamental to risk management in any portfolio, and fine wine investment is no exception. A diversified wine portfolio helps to reduce the impact of volatility, allowing investors to maximise returns by spreading risk.

While some wines may deliver higher returns, others can contribute to portfolio stability, as different regions tend to perform in cycles. This is why building a balanced fine wine portfolio requires selecting wines from a variety of regions, vintages, and holding periods. 

Diversifying by regions

Wine regions around the world offer unique characteristics, each with its own market dynamics. Including wines from multiple regions can help balance and strengthen an investment portfolio. 

Some primary regions to consider include:

Bordeaux: Bordeaux is undoubtedly the leader in the fine wine investment landscape, taking close to 40% of the market by value. The First Growths are its most liquid wines. In general, the classified growths are a staple in investment portfolios due to their established reputation and consistent performance.

Burgundy: Burgundy, driven by scarcity and rarity, is an investors’ paradise that has been trending in the last decade. Prices for its top Pinot Noir and Chardonnay have reached stratospheric highs and the region consistently breaks auction records.

Champagne: A market that attracts both drinkers and collectors, Champagne has enjoyed rising popularity as an investment in the last five years, thanks to strong brand recognition, liquidity and stable performance.

Italy: Italy continues to provide a mix of value, growth potential, and great quality. Its two pillars, Tuscany and Piedmont, are often included in investment portfolios for their balancing act – if Tuscany provides stability, top Barolo and Barbaresco tend to deliver impressive returns. 

California: Top Napa wines are among the most expensive in the market, while also boasting some of the highest critic scores, particularly from the New World. 

Emerging investment regions: As the market broadens, wines from other well-established regions are gaining traction in the investment world. Germany, Australia, and South America are some of the countries bringing a new level of diversity that can sometimes lead to higher returns.

Choosing vintages strategically

A well-diversified investment portfolio focuses on a range of vintages, as well as labels.

While older vintages offer stability and a more predictable market performance, younger vintages have a greater growth potential as they mature.

Older prime vintages: ‘On’ vintages, specific to each region, like Bordeaux’s 2000 or 2005, tend to have stable pricing due to their high quality and reputation. Including these in your portfolio can provide a foundation of reliability.

Younger vintages: Wines from recent years with high-quality (such as Bordeaux 2019) can offer growth potential over the long-term. As these wines age, their value often appreciates, providing long-term returns for investors willing to hold them.

Off-vintages: Investing in lesser-known or ‘off’ vintages can be worthwhile, particularly if the producer has a strong reputation. These wines are often priced lower but can perform well over time. Typically though not always they have a shorter holding period.

At the end, it is always a question of quality and value for money. 

Balancing short-term and long-term holdings

Fine wines vary in their optimal holding periods. Some wines reach peak quality and market value sooner, while others require decades of ageing. Creating a mix of wines with different holding periods allows for both short-term liquidity and long-term growth.

Short-term hold wines: These are typically wines from lesser-known producers, high-demand recent vintages or off vintages bought during periods of market correction.  These wines can be sold within a few years for a quick return.

Long-term hold wines: Wines from top producers, especially those known for longevity, are best held for 10+ years. For example, a Château Lafite Rothschild or Domaine de la Romanée-Conti can offer three figure returns if held over decades.

Active management for maximising portfolio success

Diversification is just one piece of the puzzle. Regular monitoring and occassional adjustments are essential for maximising returns in a fine wine portfolio.

Market conditions and wine values change over time, so staying informed and making adjustments ensures your portfolio remains aligned with your financial goals. Using tools like Wine Track or consulting with a wine investment advisor can provide valuable insights for rebalancing and enhancing your investment strategy.

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 correction: top wines 20% below their peak

Left Bank Bordeaux vineyards
  • Top Bordeaux labels are now approximately 20% below their peaks achieved during the last decade.
  • Lafite Rothschild has been the hardest hit, driven lower by classic vintages such as 2018, 2009 and 2000. 
  • The recent fall in prices has brought many labels back to levels not seen in years.

As recently explored, the fine wine market has been on a downward trend, but what does this mean for individual labels? Today, we turn to Bordeaux’s top names, examining the recent performance of some of the most investable wines in the world.

Bordeaux after the peak

Top Bordeaux labels are now approximately 20% below their peaks, achieved during the last decade. 

Bordeaux wine indices

The First Growths, which often serve as the barometers of the fine wine market, had been riding high, with September 2022 marking a peak in pricing for Lafite Rothschild, Mouton Rothschild and Margaux. 

However, since then, the landscape has changed dramatically. Lafite Rothschild, once the shining star, has fallen by 28.6%, the most severe decline among the top names. Margaux and Mouton Rothschild have also taken significant hits, falling by 17.1% and 17.5%, respectively.

On the Right Bank, the situation is no different. Petrus, which peaked in December 2022, has since dropped by 21.4%, while Le Pin, which reached its high in February 2023, has declined by 20.3%. These losses have brought prices to levels last seen several years ago.

First Growths peaked in September 2022, since then:

  • Lafite is down 28.6% 
  • Mouton is down 17.5% 
  • Margaux is down 17.1% 

On the Right Bank:

  • Petrus is down 21.4% since its December 2022 peak
  • Le Pin is down 20.3% since its February 2023 peak

The Lafite fall: a deep dive

Lafite Rothschild – the second most-searched-for wine on Wine-Searcher – has seen the steepest decline since its peak, with prices plummeting 28.6% on average.

Which vintages have contributed to its fall over the last two years? The 2018 (WA 100 points) has been the hardest hit, down 35.9%. The wine was originally released at levels akin to the brand’s bull years, due to high critic scores, but failed to offer the best investment value. The recent price adjustment has made it a more attractive proposition. 

Older vintages that have had more time to grow have similarly fallen in value by over 30%. The classic 2009 Lafite, which boasts 99+ points from Robert Parker himself, is down 31.1% over the last two years. 

The millenial vintage, with a drinking window that extends well into the 2050s, is currently 32.6% below its peak. 

Lafite Rothschild wine vintages performance

Buying levels: back to the square one

The recent fall in prices has brought many labels back to levels not seen in years. Lafite, for example, has returned to its 2016 pricing levels, while Margaux and Mouton are back to 2020. On the Right Bank, Petrus and Le Pin have both returned to their 2021 levels.

While this might raise concerns on the surface, it presents a compelling opportunity. The scale of the correction suggests that Bordeaux wines, while still highly valued, may have been oversold in the last 18 months. 

For those looking to enter or expand their portfolios, this could represent a chance to acquire top-tier wines at a significant discount before prices start to rise again.

As with previous corrections, price declines are often followed by periods of recovery. For wealth managers and clients with a long-term investment horizon, the current situation may be seen as a momentary blip in an otherwise upward trajectory.

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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French wine production falls in 2024: Investment implications

Maison Louis Latour wine harvest
  • The 2024 French wine harvest is shaping up to be one of the smallest of the century so far.
  • Burgundy’s 2024 vintage is estimated to be 25% lower than 2023, with scarcity being a key price driver for the region’s wines.
  • Bordeaux is also facing declines, reaching its lowest volume since 2017. 

The 2024 French wine harvest is shaping up to be one of the smallest of the century so far, with regions like Burgundy and Bordeaux hit particularly hard by adverse weather conditions. According to forecasts from France’s Agreste statistics unit, overall national production may decline by up to 18%, with mildew, poor fruit set, and frost reducing output in key regions. 

What are the implications for the secondary market, especially considering the recent market downturn? This article explores how smaller volumes in 2024 could impact prices in Burgundy and Bordeaux, drawing on learnings from past vintages.

Scarcity in Burgundy

The 2024 vintage in Burgundy is being described as one of the most challenging in the past 50 years, according to Florent Latour from Maison Louis Latour. The Bureau Interprofessionnel des Vins de Bourgogne (BIVB) estimates harvest yields to be up to 25% lower than in 2023. The region has faced intense mildew pressure and adverse weather during flowering, resulting in poor fruit set.

Historically, supply constraints in Burgundy have driven price increases in the secondary market, as scarcity heightens demand among collectors. For example, the 2021 vintage, severely impacted by frost, saw a surge in auction prices for marquee producers like Domaine de la Romanée-Conti and Armand Rousseau. The same pattern could play out in 2024, as the prospect of another small vintage heightens the allure of top Burgundian wines.

However, this vintage presents complexities. While the scarcity narrative could support price gains, the current economic downturn might temper buying enthusiasm. Additionally, the challenging growing season could lead to quality variation across producers, making selectivity crucial for those looking to invest. 

Bordeaux market implications

In 2024, Bordeaux is reportedly facing a 10% decline, reaching its lowest volume since 2017. The Conseil Interprofessionnel du Vin de Bordeaux (CIVB) has described the 2024 harvest as “historically low,” with output expected to fall below the already reduced 3.8 million hectoliters of 2023. This is due to a combination of adverse weather conditions, including downy mildew and rain during harvest, as well as a reduction in vineyard areas through a government-supported grubbing-up plan.

Despite the challenges, smaller harvests can still support price stability for Bordeaux’s top-tier wines. In 2024, the scarcity of high-quality offerings might provide an opportunity for investment-grade wines, particularly from classified growths. Investors seeking value could focus on estates with a strong track record of producing excellent wines in challenging years. Yet, the broader market downturn might limit the extent of price recovery, especially for mid-tier labels that lack the same scarcity appeal as Burgundy.

Learning from past vintages

Looking back at smaller harvests like 2017 and 2021 gives an insight into what to expect from 2024. Both years saw production levels dip below 40 million hectolitres due to extreme weather events, leading to temporary price spikes in Burgundy’s secondary market. The 2017 vintage, for instance, saw price rises for top Burgundy wines, driven by fears of limited availability. In 2021, the impact of frost once again drove auction interest, with investors flocking to secure allocations. 

However, the 2024 market environment is different. With inflation and economic uncertainties weighing on consumer confidence, investors may be more selective, focusing on wines that promise both rarity and quality. Burgundy’s high starting prices could limit the scope of further price increases, while Bordeaux’s historically low output might stabilise prices for premium labels without igniting a full-fledged price surge.

The market environment

The 2024 vintage may not replicate the price exuberance of past short harvests, but it represents a moment of adjustment in the wine investment market. For Burgundy and Bordeaux, the interplay between reduced volumes, economic pressures, and strategic opportunities will shape the outlook. The true impact will become clearer once the wines are made, critics taste them, and the release prices are set, providing a more concrete sense of quality and investment potential.

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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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.