A Safe & Lucrative Investment
Prices have increased astronomically in the past year, especially for luxury items like champagne. This is according to the Liv-ex Fine Wine 100 Index, which tracks the prices of the world’s most sought-after wines. Pedro Bento of wine.je, an online wine marketplace, gives advice on how to make the most of this investment sector.
2021 was a banner year for champagne, but it came at the expense of European wine producers, who were buffeted by a perfect storm of poor climatic conditions that yielded an extremely low grape harvest. In 2021, production was only slightly above the historically small yield of 2017. Volume also fell by 4% compared to 2020 (which was already below average) and was 7% lower than the 20-year average.
In addition to the concerns about production, the effects of the pandemic also delivered the perfect storm of increased buying power from accumulated savings coupled with supply constraints. This resulted in 2021 setting new records for the secondary wine market with fine wines outperforming both the FTSE 100 and gold. Champagne was the most traded region and delivered the highest increased value, which saw champagne prices rising by 30% in the last year.
As the wine market continues to grow and change, collectors are becoming increasingly attracted to the champagne sector. Thanks to its scarcity, ageing potential, and unrivalled prestige among sparkling wines, champagne forms a safe and lucrative investment. And whilst resilient demand and supply constraints are driving the current rally, the best back-vintage champagnes should continue to deliver impressive returns.
The market also wants big bottles. A 1996 Dom Perignon Rose Gold Methuselah sold for $49,000 in 2021. Sought-after bottles include Salon, Le Mesnil, Dom Perignon 2012, Taittinger, Comtes de Champagne Blanc de Blancs 2011 and Louis Roederer Cristal.
Just after Christmas, I went to see a dear friend who has an impressive collection of aged wines in his cellar but makes the common mistake of stockpiling and not having regular assessments to check what needs drinking or selling. After I told him that the most elegant white burgundy that he had for years had now passed its prime and would be unfortunately undrinkable, he turned to a case of six bottles of Krug Clos Du Mesnil 1996 that he bought at his previous address in France and asked me if that would have gone the same way.
I told him that one bottle of their most expensive champagne would be worth more than £2,500. He was surprised... and kindly opened one for us to try. It was delicious, the best I ever tasted of that vintage. 2021 delivered great conditions for champagne investors and many will be celebrating. Next time, I would suggest using one of their cheaper bottles, because the experience is more about the company and the ambiance than it is about the drink itself.
Fine Wine Storage Recommendations Maintain a consistent temperature: Wine is temperature sensitive, so fluctuations can cause problems. The ideal temperature to store wine is 12-13 degrees centigrade, however, a degree or two either side is still OK. Consistency is key. Don’t let it get too cold; a garage may be cool in the summer, but your wines could freeze in the winter.
You’ll want to carefully control the lighting situation to best preserve your wine. Ultraviolet light is not good for fine wine; in fact, it’s the reason most red wine comes in coloured bottles. It’s like sunglasses for wine! Even artificial lights can fade labels and influence the temperature, so it’s best to store wines in the dark. If you need to turn on the lights, don’t leave them on for too long.
Wine should always be stored lying down, as this keeps the liquid in contact with the cork and prevents it from drying out. The cork itself must also be kept moist, so some degree of humidity is required. In addition, storing wine horizontally is much more space-efficient than keeping it upright. If your wine came in a wooden box, it’s best to keep it in there.
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