Investment Pourfection: appreciation of wine

July 31, 2023

The practice of investing in wine as an asset class began in the late 20th century, around the 1980s and 1990s. This was when the global economy was expanding, and wealth accumulation increased, leading to growing interest in alternative investments. Fine wines, particularly those from the Bordeaux region, gained attention as a store of value that could appreciate over time. The launch of the Liv-ex Fine Wine 100 Index in 2004, which tracks the price movement of 100 of the most sought-after fine wines, legitimized wine as an investable asset class.

Historically, wine investors were typically affluent individuals with high disposable incomes, usually from developed nations in Europe and North America. These individuals had a strong appreciation for fine wines, not only for their potential returns but also for their cultural and aesthetic values. They were typically middle-aged or older, as these age groups tend to have the necessary disposable income and the patience required for this type of long-term investment.

However, over the years, the demographics of wine investors have started to shift. The rise of digital platforms and globalized markets has made wine investing more accessible, attracting younger and more geographically diverse investors. Asia, particularly China and Hong Kong, has seen a surge in interest in wine investing over the last couple of decades.

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In terms of psychographics, wine investors tend to be individuals who appreciate the finer things in life, are willing to take calculated risks, and have a long-term investment horizon. They typically value experiences, enjoy learning about different cultures and histories, and have a deep appreciation for quality and craftsmanship.

Over the years, there’s been a democratization of wine investing, largely due to technological advancements and global market accessibility. As mentioned, younger investors and those from emerging markets are becoming more involved in wine investment.

Also, there’s been a diversification in the types of wines being invested in. While Bordeaux wines dominated the investment landscape initially, interest has spread to wines from regions like Burgundy, Champagne, Italy, and even California.

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Sustainability and ethical practices have also started to play a more significant role in wine investing. With the rise of ESG (Environmental, Social, and Governance) investing, some investors now consider a vineyard’s sustainability practices and the environmental impact of wine production when making investment decisions.

Additionally, as global wealth increases, the demand for alternative investments, including fine wine, is expected to continue growing. However, as with any investment, it’s essential for potential collectors to conduct thorough research and consider seeking advice from experts in the field. Have a look at our marketplace, and contact us for any support in your investment journey.

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