If you are a savvy investor on the look for alternative investment assets, then investment wines could be a lucrative option for you.
Choosing the right vineyard and province is highly important when it comes to investment wines, no matter if you’re making a small investment to diversify your portfolio or planning to create a whole cellar. Not all wines are suitable for an investment, in fact around 90% of the wine sold by retail outlets is meant to be drunk within 5 years.
The wine investment market makes up about 0.1% of the global wine market with the leading wine regions being Bordeaux and Burgundy. Fine wines can usually be purchased only by specialised wine retailers who have an established relationship with top winemakers and supply a carefully curated selection of wines.
So how can you spot a good investment wine and profit from collecting wine? In this article we will look at some of the leading wine regions and top investment wines on the market.
Is Collecting Wine Profitable?
Collecting wine is not only a hobby for many enthusiasts, but it can also be a great way to add some diversity to your portfolio and secure a good profit. As your investment wine approaches peak maturity, its value will start to soar.
One of the big reasons investment wine is so profitable is the fact that the wine market operates independently of the stock market, which means that even if the stock market is down the price of a fine wine will continue to rise as it ages.
Historically, wine has seen an annual return on investment of 10.6% over the past 15 years, which is partially due to the increased global demand for wine. In 2021 investment wines performed better than some of the major stocks with the Liv-ex 100 index seeing an increase of 23%.
If you want to dip into the wine market and make a low-risk investment that is almost guaranteed to see a good return, now is the time to start your investment wine collection.
What Wines Will Increase in Value?
As we have already mentioned, not all wines can be bought as an investment. It’s hard to predict which wines will go up in value as there are multiple factors affecting the wine market.
Different environmental and economic factors can affect the price of wine such as draughts, torrential rains, the COVID-19 pandemic or the current war in Ukraine.
A good place to start when looking for the best wines for investment is the Liv-ex Power 100 list which features the top 100 fine wine labels on the secondary market.
Previously the list has been widely dominated by Bordeaux and Burgundy wines, however, since 2016 the number of Italian, Rhone Valley and New World wines has steadily increased.
Which are the Best Wines to Invest in 2022?
So which are the best wines to invest in 2022? As expected Bordeaux and Burgundy wines remain a great investment, however, Champagne and different New World appellations have seen a big growth in value. Here are the wine regions wine investors should be looking at this year:
Champagne Investment Wines
Champagne is by far the most luxurious sparkling wine, which made its way up the charts as a leading investment wine in 2021. In the first quarter of 2022 this luxurious sparkling investment wine showed a steady growth of 9.55% and is predicted to outperform the previous leader – Bordeaux.
The brands you should be looking for if you want to invest in Champagne are Dom Pérignon, Krug and Louis Roederer. Champagne is a great option for beginner investors as it provides wide accessibility and steady returns.
Burgundy Investment Wines
The driving factor when it comes to the value of Burgundy wines is rarity. Fine Burgundy Grand Cru is made in very limited quantities and is often eagerly snapped up by investors.
A few of the best Burgundy wines to invest in include Grand Cru producers such as Leroy, Armand Rousseau, Roanee Coni and many more.
Bordeaux Investment Wines
Traditionally, the best Bordeaux investment wines are first-growth red blends, which have an established reputation for their unmatched quality and potential for growth in the secondary wine market.
Some of the renowned Left Bank winemakers include Latour and Lafite Rothschild, which are widely popular for their outstanding Cabernet Sauvignon based blends. Right Bank vineyards such as Le Pin and Lafleur on the other hand are mostly known for their fantastic Merlot.
Rhone Valley Investment Wines
While Rhone Valley has few wines that are capable of competing with premium Burgundy or Bordeaux wines, there are still a number of wines from this region which can help diversify your portfolio.
Great examples from the Rhone Valley include vintage Châteauneuf-du-Pape (particularly from Chateau Rayas), Hermitage La Chapelle or Hermitage Vin de Paille.
Italian Investment Wines
The best Italian investment wines come predominantly from the regions of Tuscany or Piedmont.
Traditionally, most of the trade is produced by critically acclaimed Tuscan wines like Ornellia or Sassicia, but due to the large demand more and more Italian wine makers are entering the secondary wine market.
A couple of the traditionals that can make a lucrative addition to the portfolio of any savvy investor include Brunellos or Vino Nobile.
Representatives of the Piedmont region in the fine wine market are Nebbiolo-based wine, primarily Barolos.
New World Investment Wines
If you are interested in expanding your wine portfolio into New World investment wines, you should be looking at Napa Valley, California in America as well as Australia and New Zealand.
Napa Valley’s Cabernet Sauvignon wines dominate the fine wine market with some of the leading vineyards including names like Caymus, Kapcsandy Family and Screaming Eagle.
The biggest Australian winemakers known for producing investment-grade fine wines include Mount Mary, Torbreck and Penfolds.
Investment wine is a great alternative that offers excellent returns. You have to be careful when selecting wines to buy for your collection with only a small fraction of the wine market being classed as suitable for investment, however, picking the right bottle could get you great profit.
So what are you waiting for? Start growing your wine investment portfolio today!
