There are a few ways to answer does all Wine go up in value because there is no single answer. Some bottles of Wine are known as investment-grade Wine – these have a higher likelihood of increasing in price. The vast majority of bottles produced in the world are not suitable for investment. To identify wine investment opportunities, it’s vital to know the top factors that drive wine prices.
The Top Factors That Shape Wine Prices
Buying Wine as an investment is a relatively high risk—concerns around wine authenticity, wine storage, and other issues impact prices. Unlike public stocks or investing in office buildings that produce a consistent cash flow, Wine does not produce dividends, interest, or other cash.
Instead, your potential return is purely based on price appreciation. In a way, Wine investing is like investing in gold or other physical assets. Making money from Wine is possible, but only when you have substantial knowledge about Wine. Specifically, there are a few ways to invest.
Factor 1: Supply of Wine
The question of supply critically impacts the price you pay for wines. Typically, good weather and a smoothly functioning economy mean that wineries can produce a higher volume of Wine. However, weather conditions are not always good! Climate change is starting to impact wine producers in many regions, leading to supply shortages.
Food supply, especially for cash crops like Wine, is also impacted by other cost factors. For example, the 2022 war in Europe has impacted the global fertilizer supply. In that case, money in assets like Wine may show a better return as the supply of Wine falls for some time.
Factor 2: Demand For Wine
Demand is the second factor that influences the price of this type of asset. There are two several ways to look at the demand for Wine. First, you can look at consumer and restaurant demand for Wine – these buyers account for the lion’s share of wine sales.
Demand for investment-grade wines is a bit different than the consumer market. It is influenced by brokers’ buying and selling activity, actions on a wine investing platform, and auctions. Finally, reviews and recommendations by those respected in the wine industry (e.g., Robert Parker historically had an influence) have an effect.
Factor 3: Inflation Impact
In inflationary times, the cost of everything goes up. Wine producers must pay more for labor, materials, shipping, marketing, and more. High inflation can lead to higher wine prices. Inflation tends to impact every primary asset class, so don’t rely on inflation. Instead, inflation is more likely to impact retail sales, and the average price consumers pay.
Three Ways To Invest In Wine
There are several ways to invest in Wine, depending on your goals and how much you’re investing. In real estate, it’s possible to invest in assets directly (e.g., buy entire office complexes). Alternatively, you can buy fractional shares in real estate through mutual funds, exchange-traded funds, and other vehicles.
1 Invest in Wine Companies Through The Stock Market
This option is the simplest way to get started. In essence, you buy shares through stock brokers in wine or alcohol companies. Some well-known wine stocks include Conselletation Brands (NYSE: STZ), the Duckhorn Portfolio (NYSE: NAPA), and Vintage Wine Estates (NASDAQ: VWE).
The advantage of investing in a wine stock is buying part of a company. You are likely to benefit if the company makes more profit or pays a dividend. The downside is that you don’t get a wine collection.
2 Direct Wine Investment
Direct wine investment means buying bottles, storing them, and selling them for a profit. For example, you might buy a case of white wines with a good history at auctions. Unlike art for sale, Wine usually has a shorter life of up to 30 years. Some scarce wines, like those profiled in the Billionaire’s Vinegar, are bought and sold when they are over 100 years old.
Direct wine investment is high risk and high reward. The advantage is that you may be able to discover wines at a great price or in places that other people aren’t looking for. The disadvantage is that you will have to pay additional costs for wine shipping, storage, and research. Unlike stocks, there is no simple share price you can reference to see the value of your wine investment.
3 Wine Investment Broker or Platform
Working with a broker, advisor, or platform with specialized information on wine investment is a time-efficient option for high-net-worth investors. Assuming you have a significant amount of money to invest, an advisor can help you. They know how to access wine collections, private sales, estate sales, auctions, wineries, and other places to find Wine.
Is Wine A Good Long-Term Investment?
For the vast majority of people, the answer is no.
Investing in high-quality stocks, bonds, and real estate has a better track record of producing proceeds for investors. Specifically, non-accredited investors (i.e., net worth over $1 million and an income over $200,000) should stay away from Wine as an investment. Buy wine to enjoy it instead. Get started with this guide to populate white wine varieties: Chardonnay vs Sauvignon Blanc vs Chenin Blanc.
Who exactly should invest in wine, then? Wine investment is best left to those with substantial investment holdings in traditional assets. Why? The answer to does all wine go up in value is no. Only a small fraction of wines, about 1% of global production, have a meaningful chance of appreciating in price.
High net worth investors, especially if you are already a wine connoisseurs, may be able to earn a positive return by investing in wine. Use the following tips to start your wine-investing research.
- Study the wine market carefully.
Several resources are available, like the Wine Market Journal and data from a wine investment platform like Vinovest. In addition, take a close look at market volatility over the years. Spend enough time looking at the data, and you’ll find hundreds of opportunities if you’re patient.
Taking the time to identify specific individual assets (i.e., underpriced wine bottles likely to increase in Wine) is one method. Another option for people is to arrange a diversified, long-term-oriented investment portfolio of wines. You can buy an index fund on significant stock exchanges to hold many investments. Specialized wine brokers can help you find multiple wines to buy to reduce risk.
- Start with expensive Wine.
Buying an expensive wine from a well-regarded producer in Bordeaux gives you a higher chance of making a good return. What if you are looking for high-risk investment opportunities? Buying Wine from lesser-known productions is an option. In this case, you’re betting that the Wine will become popular. It may work, but there is a high chance of losing all your money.
- Professional storage setup
Investors wishing to see their assets (i.e., investment-grade wine bottles) daily will need high-quality wine storage. The lowest risk setup will include stable humidity and temperature. In addition, these types of assets also need to avoid sunlight and vibration, which can damage the wine. You can work with a third party to assist with this process like vint’s climate-controlled storage partner
Are you wondering how just much a single wine bottle sells for? Take a look at my guide to the most expensive bottle of wine. Don’t assume every bottle you come across will sell for a high price though!
The answer to does all Wine go up in value is no. Only a tiny percentage of the world’s wine production has investment potential. Certain wine regions like Bordeaux and Burgundy in France tend to have an excellent reputation. Indeed, many build their entire wine collection around high-end French wines. In contrast, bargain wine is unlikely to appreciate.