Investment
A Guide to Investing in Wine
By Lewis Chester DipWSET, co-founder and CEO, Liquid Icons
Investment
By Lewis Chester DipWSET, co-founder and CEO, Liquid Icons
The real beginnings of fine-wine investing can be traced to 1966, and auction house Christie’s recruitment of the late British wine legend Michael Broadbent to run a new fine-wine auction department. Bottled wines began to change hands at very high prices, making younger, top-quality wines more valuable as long-term investments. And as the saying goes: “The rest is history…”
A shortcut route is to go to a well-known wine merchant and open an account. The merchant will not have access to all the wines you might want, however, and you’ll need to earn their respect to avoid being sold lesser stock.
Alternatively, you could start bidding at wine auctions, which can be very expensive. World-record prices are regularly achieved, and the houses only really specialize in selling back vintage rather than new vintage.
What about En Primeur wine futures, which involves a promise to deliver, in a couple of years’ time, the latest, yet-to-be-bottled vintage? Bordeaux futures have been around since the 1800s and there is a campaign for Burgundy wines in the UK every January.
Bordeaux has clear benefits if you choose to go it alone. Go for the investment-grade wines among the big five First Growths of the Left Bank: Château Haut-Brion, Château Lafite Rothschild, Château Latour, Château Margaux and Château Mouton Rothschild.
Diversifying with wines from Burgundy, Champagne, Italy and California will ensure that you don’t overexpose yourself to one part of the market.
Burgundy is the most sought-after and highest-returning fine-wine region in the world today. Based on a pyramid structure: the Grand Crus at the top, then the Premier Crus, the village wines and, finally, the regional wines. Unlike Bordeaux, you’re just as likely to make good returns with white wines as you are red. The blue-chip domaines include the holy trinity of Domaine de la Romanée-Conti, Domaine Leroy and Domaine Armand Rousseau.
Prestige Cuvées such as Krug Clos du Mesnil and Clos d’Ambonnay, Dom Perignon P2 and P3, Salon and Cristal have the potential for long-term price appreciation. As for Grower Champagnes, consider Jacques Selosse, Pierre Péters, Agrapart & Fils and Bérèche.
Over on the US West Coast, limit your selection to a few names: Screaming Eagle, Harlan, Dominus, Opus One, Colgin Cellar, Sine Qua Non and Ridge Vineyards.
Serious collectors-in-the-making should also consider bottle format. Wines in magnums always age better (less oxygen per liter gets into the bottle) and they are rarer—especially when it comes to Grand Crus Burgundy wines.
How you store your wines is every bit as important as what you invest in. Light, humidity, temperature, vibration—all are factors in how the wine will age.
Packaging also impacts the perception of provenance. Most Bordeaux wines come in original wooden cases, whereas most Burgundy cases come in original carton cases.
You might end up thinking that you would have been better off putting your hard-earned cash into that S&P 500 tracker fund. Here’s the heart of the matter: Investment in wine should be a labor of love — a passion investment with abundant emotional returns.
A search for the perfect glass of wine at 40,000 feet inspired a Wine Program that offers the finest wines that taste the best at altitude.
A search for the perfect glass of wine at 40,000 feet inspired a Wine Program that offers the finest wines that taste the best at altitude.
