Investing in wine : how to do it ?

investing in wine

At the end of 2018, two Romanée-Conti bottles were auctionned off for over a million dollars, making them the most expensive wine bottles in the world. This extraordinary amount of money is partly explained by their rarity : only 600 bottles of this cru and vintage were produced. But it also illustrates perfectly the potential of collection bottles as investments. These investments perform exceptionally well and the market price continues to rise. However, investing in a cellar isn't simple and it is strongly ill advised to rush without a good understanding of the wine market. Au-droit-de-bouchon offers you some helpful advice for a good start.

 

A long-term investment

 

Before investing, you should make sure you have the right storage conditions for your bottles. A secured wine cellar is ideal in order to control the hydrometry and temperature.

 

You should also focus on long-keeping wines since it can't be a short-term investment : it is best to plan for at least 5 to 10 years. A strong knowledge of « apogée » (the ideal period for cru tasting) is key, many wines lose their flavor after a number of years.

 

Learn to recognize good deals

 

In order to identify the best opportunities, it is important to study specialised press and guides as well as wine market analysis which are issued by brokers and experts, they may draw your attention to rising appellations and regions. You might then be able to spot a still unknown domaine and predict certain price hikes. These informations will give you an indication of your performances (potential gains).
You will have to diversify your acquisitions and purchase from various appellations, price ranges and vintages in order to spread risks.

 

Start with safe investments to spread risks

 

Even as a hobby, investing is not without risks. Gains are never garantied and it is best to limit the financial proportion you wish to devote to it to about 5%.

 

It may be best to start with safe investments and first buy collection bottles which are worth more than a thousand euros. Exceptional wines are often rare and worth way more, they are also most likely to get better with time. Down the road, you will find it easier to take a chance on « nuggets ».

 

Recognize increasing values

 

The first wine investors started with great Bordeaux and Bourgogne wines. However, the high demand for these crus led to much higher prices. Great Bourgogne wines in particular, such as Romanée-Conti, are still greatly appreciated. Therefore, wine lovers now look for more affordable appellations. Over the past few years, a growing interest for a much more environmentally friendly production appeared and vineyards from Jura and Beaujolais managed to hold their own particularly well. Italian, spanish and portugese wines also generate more and more interest.