For investors looking to diversify their portfolio, wine offers an asset class comparable to art, cars, and jewelry. However, it’s obviously the most delicious thing to collect (what other asset class can you enjoy with white truffle tagliolini?) If you do it right, wine can pay serious returns! Read on for the tools and tricks to set yourself up for wine collecting success.
Wine is a living thing, which means it needs to be properly cared for to perform at its best. The first step to caring for your wine is to have proper storage space. Wine storage vessels can range from 10 bottle fridges to entire rooms, but the most critical thing is to keep your wines in a cool, dark environment with a temperature of about 55 degrees and approximately 70% humidity. If you don’t want to invest in home storage, there are numerous professional wine storage facilities that can take care of all the hard work for you. It’s also important to figure out how much room you need. As a rule of thumb- you will always need more room than you think because once you acquire the “wine collecting bug” it’s hard going back. Make sure to also leave extra room in your cellar for new regions and styles of wine as your tastes may change. At first, juicy California Zinfandels may make your taste buds dance. However, as your tastes evolve you may find yourself gravitating towards earthy Italian reds or ethereal Burgundies.
Balance and variety are also key when building a wine collection. You want to ensure that you always have wine that is ready to drink. After all, life is short, and a delicious bottle of wine can turn a terrible day into a spectacular one. You also want to have a collection of age worthy wines with a drinking window of at least 10+ years (especially if you are interested in collecting as an investment). Some high-end, expensive wines, especially from California, can be very tempting to open when they are young because they can be pretty darn pleasurable. However, quality wines are made to age and patience will surely be rewarded with additional cellar time. Fine wines from old world regions such as Bordeaux and Burgundy generally always need at least 3-5 years before they can be opened and enjoyed. With patience, these varietals can really go the distance of 20, 30 and sometimes even 50 years.
When sourcing wines, you want to make sure that you are buying either directly from the wine estate or reputable merchants. Certain reputable wine merchants, such as Wally’s, receive direct allocations from the vineyards and importers on release. This means that their clients receive priority access to allocations that would otherwise be impossible to acquire. Wally’s also has a deep inventory of rare, library vintages that are always exciting for collectors to purchase. Signing up for winery direct mailing lists is also a good idea to ensure perfect provenance. However, keep in mind, that sometimes it can take 10 years or more to receive an allocation from wineries such as Colgin, Sine Qua Non, or Screaming Eagle. Buying at auction is another avenue to go. Some of the rarest wines in the world can only be acquired at wine auctions. Famed auction houses such as Christie’s conduct both live & online auctions around the world and throughout the year.Wine Auctions in the U.S. have continued to grow at 6% year on year, bringing its revenue share to 56%-it’s highest ever.
For the best investments, collect wines that have a truly global secondary demand. For example, first growth Bordeaux (Chateau Lafite Rothschild, Chateau Mouton Rothschild, Chateau Margaux, Chateau Latour, Chateau Haut Brion) as well as top Right Bank Bordeaux (Chateau Cheval Blanc and Chateau Petrus) have provided sound returns for centuries. The top burgundies (Domaine de la Romanee Conti, Leroy, and Rousseau) have performed well over the past twenty-five years. California producers such as Screaming Eagle, Colgin, Harlan Estate, and Scarecrow, are also becoming more valuable each year.You want to focus on buying the best vintages from top producers, which will further improve the wine’s worth and will give you confidence that what you are buying is truly stellar.Examples of top vintages are 1990 and 2005 in Burgundy, 1982, 2000, 2009, 2010, 2015 in Bordeaux and 1994, 2007, 2013 in California.
Here are just a few examples of how your wine can appreciate over time:
1982 Chateau Mouton Rothschild:
Average Release Price: $32.50 (1985)
Current Retail Price: $2,400.00 per bottle
Return on Investment: 7,385%
Average Release Price: $900.00 (1993)
Current Retail Price: $19,000.00
Return on Investment: 2111%
1994 Harlan Estate
Average Release Price: $100.00 (1997)
Current Retail Price: $1,200.00
Return on Investment: 1200%
2000 Petrus Pomerol:
Average Release Price: $400.00 (2003)
Current Retail Price: $6,000.00
Return on Investment: 1500%
2007 Screaming Eagle:
Average Release Price: $750.00 (2010)
Current Retail Price: $4,500.00
Return on Investment: 600%
Most importantly, collecting wine should never feel intimidating or overwhelming. Instead, it should be a fun joyful hobby that opens your eyes to the world! There are few pleasures in life and drinking great wine is certainly one of them.
For consignment or auction inquiries, please contact our Rare Wine Specialist, Katherine Levy.
The Christie's-Wally's Spring Online Auction, THE MASTERS OF TERROIR, is happening right now until April 9th! The auction is comprised of an assembly of the finest producers of the rarest terroir found on the Côte d’Or. This assortment’s center point rests on the remarkable allocations acquired of the much heralded 2005 Burgundy harvest. This collection is fresh-to-market and represents this collector’s first time at auction. Click here to bid & browse lots now.