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Investing in wine – an asset class for everyone

Laura Tibuleac

· 3 min read
Investing in wine – an asset class for everyone
In vino veritas

Red, white, rosé—who doesn't love wine? Europe boasts 45% of the world’s wine-growing regions, covering an impressive 3.2 million hectares. That's a tremendous amount of wine to savor, but have you considered it as an investment opportunity?

For most people, investing means buying stocks, bonds, and funds. But you may also be able to turn a profit on a nice bottle of Cabernet or Sauvignon Blanc if you know how to pick them. Here’s everything you need to know to invest in wine, even if you don’t have a wine cellar—yet.

The history of investing in wine

Since the early 1970s, wine has emerged as a significant global commodity, experiencing remarkable fluctuations in value that reflect broader economic trends. Between the early 1970s and 1972, the price of wine surged by 400%, driven by increasing global wealth and a burgeoning appreciation for fine vintages. However, this dramatic ascent was abruptly followed by a sharp decline in 1974, mirroring the era's economic volatility.

Is investing in wine for everybody?

You might believe that wine lovers and connoisseurs hold an advantage when it comes to investing in this divine elixir. Indeed, possessing knowledge and market insights can undoubtedly enhance any investment strategy. However, just as the pleasure of wine transcends backgrounds and experiences, so too does the opportunity for anyone to invest in wine.

The valuation of wine is often influenced by renowned critics and the prestige of the brand. Yet, whether you are a seasoned aficionado or a curious newcomer, you can still access the intricacies of wine investment.

A portfolio of wines as an alternative investment

Like any other alternative investment, buying wine can provide your portfolio with an excellent source of diversification. Stocks and bonds go through familiar cycles of boom and bust, but collectibles like fine wine deliver investment returns with little to no correlation to traditional assets—they may even be negatively correlated with the stock market.

Wine offers a unique source of diversification because its value is based on factors that have little relation to the performance of the economy, interest rates, corporate earnings, or conventional investor sentiment.

The value of wine responds to factors such as weather patterns, harvest yields, and vintage and consumer trends, all of which together intersect with supply and demand. Because these factors are unrelated to the overall stock market, wine investments can complement a traditional portfolio.

How to evaluate wine as an investment opportunity

A wide range of factors influence a wine’s potential to appreciate in value. Some are fundamental while others are more market-driven and related to supply and demand.

No matter the vineyard or appellation, there are a number of factors that have a significant influence on the investment potential of every wine. Follow these simple steps to make sure you’re buying investment-grade wine:

  • Pay attention to vintage - Vintage is the year in which grapes are harvested and wine is produced in a particular region. The quality of a harvest varies from year to year, with weather having the most significant impact on the grapes. A well-informed investor should be aware of the vintages that yield the best production of the wine under consideration.
  • Weigh the wine producer’s reputation - The reputation of a wine producer has a big impact on a wine’s potential for appreciation. Many of the most investable wines come from leading producers, for example, Domaine de la Romanée-Conti (DRC), Pétrus, Château Mouton Rothschild, and Château Lafite Rothschild, as well as from regions such as Burgundy and Bordeaux.
  • Understand a wine’s aging potential & longevity - Aging potential is critical for fine wine because some wines age better than others. Factors that can influence the potential to age well include the type of grape and the level of acid and tannins. You can also look at a producer’s track record of creating wines that age well.
  • Longevity varies among wines. Investment-grade wines tend to mature around 10 years after bottling, but some wines can age for extended periods, appreciating in value and quality all the while. Others will only be drinkable for a shorter period after fully mature.
  • Examine scarcity and price history - Wine scarcity drives up the value of the vintages you invest in. Take Domaine de la Romanée-Conti, for example. This vineyard is known for some of the world’s most sought-after Burgundy, yet because of its small size produces only around 450 cases annually. However, when producers are ranked by the value of aggregate sales, DRC tops the list. Meanwhile, a wine’s price history demonstrates the trend in value, with investable wines showing a steady progression upward.
  • Wine Critics - The recommendations of wine critics are taken very seriously, and critic ratings can have a strong impact on a wine’s potential to be appreciated. Robert Parker, James Suckling, and Jancis Robinson are among the most influential wine critics, so be sure to assess their published opinions on wines you’re considering.

How can you invest in Wine – introducing WineFortune

As an investment platform specializing in wine, WineFortune seamlessly blends the expertise of its in-house specialists with comprehensive data from Liv-ex, the renowned B2B marketplace for the wine trade. Utilizing an advanced algorithm, WineFortune analyzes two decades of data to identify wines with the highest growth potential, offering investors valuable insights.

WineFortune makes wine investment straightforward and accessible, eliminating the need for substantial capital. With an entry point as low as 1 euro and no hidden fees, anyone can embark on their wine investment journey. Managing your portfolio is effortless with investment subscriptions, and the secondary market provides opportunities to trade wines acquired directly from producers and contracted partners.

Moreover, WineFortune offers a unique twist: the ability to enjoy the wines you invest in. As your tastes evolve and your understanding of the industry deepens, you are not confined to your initial selections but can explore new additions to your portfolio.

As a B2B2C enterprise, WineFortune leverages an AI-driven SaaS platform to connect wineries, investors, and wholesalers, revolutionizing the wine industry. The wine market is valued at $340.23 billion in 2021 and is projected to rise to $456.76 billion by 2028, at a CAGR of 4.30% (Source: Fine Wine Investment Platform - WineFortune ).

Building on their success in their home market of Estonia, where clients have invested over €1,000,000, WineFortune is now raising a seed investment of €150,000 to fuel their angel investment initiatives. This funding will support their mission to expand their reach and solidify their position in the European market.

Join WineFortune in changing the wine industry, where technology meets tradition, and investment meets enjoyment. Explore WineFortune’s seed round on SeedBlink.

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