Investing in fine wine is back in fashion. Following a couple of relatively lean years outside of top-flight red Burgundy, the latter months of 2020 have seen a resurgence in interest from collectors and investors. According to Liv-Ex, the 100 index is up 4% and, owing to a surge of trading since the summer, that figure may yet rise further. Compare that to the performance of the FTSE 100 – down nearly 17% on the year – and fine wine as an investment has rarely looked so good.
Unlike previous surges, however, this year’s charge seems not to have been solely due to a frenzy in the Burgundy and Bordeaux markets. Demand for stocks of wines from these regions in great vintages such as 2015, 2010, 2009 and 2005 has soared but there’s also been plenty of buyers for top wines from the Rhône, Australia, Spain, the US, and prestige cuvee Champagne.
The ravages of COVID, Brexit uncertainty and an expected and potentially prolonged global economic slowdown, have all forced investors to look beyond the stock and property markets and fine wine is once again flavour of the month.
The big question is will this continue into 2021 and if so, which wines are worth putting your money into? Well, while we’re wine merchants and not financial planners we can offer you the benefit of our advice in terms of what we’re looking to buy in 2021 based on the current market and what we’re seeing sell.
The following five properties are ones we feel will do well in 2021 and beyond. While they are all wildly different in terms of style, region and price, the one thing they have in common is that they are physical and by extension becoming rarer as they are drunk. We may be wrong of course and in another 12 months we may have a stock of wine that’s worth less than it is today. Something tells us though that won’t be the case.
Before we get to the list, we should say we’ve deliberately omitted Domaine de la Romanee Conti. While DRC has been a long-term star of the market and the saleroom, its price has become so high – the average on WineSearcher is now an eye-watering £15,000 a bottle ex-VAT – that it seems too much of a risk. Burgundy prices have softened (slightly) in 2020 and with many saying the Burgundy bubble will burst in 2021, we’ve steered clear of this peerless wine.
So, here goes…
Since Latour pulled out of the en-primeur market its wines have seen further price rises. The château is releasing its wines much later and at higher prices that the market seems keen to pay. Older wines from great vintages such as the awesome, 100-point 1982 have risen sharply and look like they have more to give. Always impeccably made and long lived, wines like the 1996, 2000, 2005 and 2009 would all be worth considering.
Arguably the greatest of all Champagne houses, Krug’s marketing is almost as good as their wines. The rebranding of their non-vintage – sorry, their multi-vintage – as a numbered edition was a stroke of genius. Their vintage wines are always sublime and collectable and have done very well in terms of appreciation of late. The 1990, available a decade ago for £140 a bottle, is now closer to £550 and other leading historical vintages such 1989 and 1996 are doing well too. Perhaps the wine we’re most intrigued by is the Clos de Mesnil. This single vineyard cru which is planted entirely with chardonnay has been in Krug’s hands since the early 1970s and while it’s never been cheap – I was selling the 1986 in 1994 for £125 (Dom Perignon was £60) of late its started to fly. The introduction of its partner and opposite, the blanc de noir Clos d’Ambonnay at around £1800 a bottle has made Mesnil look cheap and interest has surged.
Australia’s most famous wine, this icon has always been sought-after but has rarely hit the investment heights it arguably deserved. Production isn’t that small and as a category very few, if any, Australian wines have been seen as a good buy for returns. Even the 100-point 2008 took some time to fly, but as the market has opened up so this incredible wine has begun to be seen as a contender. Like Lafite a decade or so ago, its surge is much to do with demand from the Chinese. While this could be its making it could also be its downfall. The Chinese are fickle collectors – as holders of large stocks of Lafite in 2008 will tell you – and with Australian-Chinese relations currently frosty and getting colder, it could be vulnerable.
Always expensive, always a darling of the sale room, recent vintages of Petrus have taken this exquisite wine into a whole new realm. Aside from a rocky period between 1979-1984, Petrus has consistently produced wines that confirm its status as the King of Pomerol. Older vintages are now incredibly highly sought after. Increasingly rare gems like the 1989, 1990, 1995,1998, 1999, 2000 and 2005 are changing hands for sums that even this great property is unaccustomed to. The ‘challenging’ 2017 vintage will cost you around £2,500 a bottle and superstars like 2015, 2016 and 2018 far more. The vineyard’s size and the winemaking talent on hand makes one believe that this could be another golden age for Petrus.
Established by Antinori, owned by Frescobaldi, Masseto is modern Italian wine royalty. 100% Merlot, like Petrus it exudes opulence, structure and off-the-charts aromatics and complexity. For a time, it was in the shadow of other super Tuscans such as Sassicaia, but now – in terms of price – it is way out in front. Plaudits including Robert Parker, Stephen Spurrier and James Suckling have sent demand soaring and you’ll be lucky to find a bottle for under £400. As with Grange, Masseto has benefited from the general rise in demand for fine wines and with recent vintages being largely successful and historic vintages rare, its another one to consider.
If we had one piece of advice to give to anyone who’s considering investing or collecting wines, it’s this: Buy wines that are physical. Volatility is still a problem for en-primeur at the top end and with older stocks becoming rarer so now is the time to buy.
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