Fine Wine as an Investment

What is Fine Wine Investment?

When it comes to the definition of fine wine, it is one that is difficult to capture in a few sentences. This is due to the subjective nature of perceptions that wine quality is viewed through. It is a term that comes infused with the aromas of finery and money and as such makes for an area ripe for investment. Buying fine wine as an investment is something that has grown in popularity since the 1980s and is becoming an asset of more interest to investors

Is Fine Wine a Good Investment?

Fine wine investment is something that doesn’t immediately spring to mind when you’re looking for a way to store and grow your money. However, it is in fact an asset that has been compared to gold as an investment. Whether fine wine is a better investment than gold is completely dependable upon the rate of gold and the wine you choose to invest in. The answer in some cases (excuse the pun) is yes, while some vintages can let their owners down, but it investing in fine wine is regarded a relatively low risk investment practice.  An investment in fine wine is something that can be pleasurable and help keep your money safe when it is done right. It is as an asset that has only seen growth since the 1990s and is a luxury that has seen a lot of technological progression. Globalisation has played a part in the popularity of fine wine that arose in the 1990s and technological advancements in the processes of fine wine, from the growing process and bottling, to storage and tasting. Certain companies such as Berry Bros and Rudd have even created online trading posts where in which customers can buy and sell fine wines through the Berry Bros bonded warehouse. All these modern elements have progressed the fine art of fine wine investment into a higher tier of appreciation. What gives fine wine its value is really the time and care that has to be implemented into the process for the final asset to reach its potential wealth.

When to Invest

Timing is everything when it comes to fine and rare wines. The years in which the grape harvest was at its finest should become ingrained within your mind, as you approach the idea of what bottle of vintage you want to invest in. For example Berry Bros & Rudd has rated Red Bordeaux wines from 2005 and 2010 to be some of the best wines to keep hold of. There are stages within the wine making process that can make for a better time of investment. All investments are gambles regardless of the guarantees you or others may have persuaded yourself of and should only be made at a time that you feel financially comfortable.

The En Primeur Advantage?

Of course you can invest in a wine long before it’s even reached the bottle. In the period after the harvest and before the wine becomes bottled, producers offer their wine at a lower price than when it has been bottled. This also allows the producer a chance to increase their flow of capital as well and for the consumer, as well as the lower price, it also offers them a chance to acquire vintages that may only be available in lower quantities. This method of purchasing a vintage while it still remains in its barrel is called En Primeur or “future wines”. Purchasing the wine En Primeur, you’ll not see it until the process of maturing has been completed, which can take up to 2 – 3 years. The world acclaimed wine critic Robert Parker has stated that “the en primeurs market – except in a great, great vintage – is largely moribund, it is largely dead, for now,”. To clarify, this is a quote taken in relation to that of Bordeaux primeur wines. The En Primeur 2015 dates were between March and April and so have passed us by this year in any case.

Wines to Invest In

European fine wines have long held investors eyes for their quality and status. Among these, renowned wines from Bordeaux fine wines have long been a preference of choice for fine wine collectors, with vintages from Burgundy also attracting some attention. Berry Bros has created some fine wine charts which depicts some of these more renowned wines and their increases in value over the years.

The Mouton Rothschild 2000 vintage is a wine that has become iconic within the wine investment industry, with its recognisable Augsburg Ram label so intricately woven onto the bottle in gold enamel. You can look for a bottle’s authenticity by finding the Chateau Mouton Rothschild name on the bottom. It’s a wine that’s value has been observed by Berry Bros and Rudd to yet reach its prime.

Burgundy is becoming more identifiable as a region that is producing wines worth the investment. One particular wine from Burgundy to feature on the Berry Bros fine wine chart is the 1999 Armand Rousseau, which accordingly to their chart, has gained a 700% increase in value.

The important thing to remember when you’re investing in fine wine is to select a wine that you truly appreciate and that you enjoy. Maybe not so much that you crack it open, but that’s a different kind of investment all together.

About the Author:

Adam is a freelance writer that focuses on luxury asset trends for Borro Private Finance.