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Hey 👋🏼,

OK, so this is an investment guide close to my heart/mouth, as my absolute drink of choice is a medium-bodied with a hint of ripe cherry red wine. And more recently, in fact as of summer ‘24, I am obsessed with a nice chilled red wine. 

But my drinking habits to one side, wine as an alternative asset choice has really gained momentum over the last decade. 

So let’s uncover how it all works.

I’m going to cover:

• Why invest in wine
• The wine market in numbers
• How to invest in wine

Why invest in wine

Investing in fine wine is gaining traction as a serious alternative asset class due to its consistent returns and low volatility compared to traditional investments like stocks and real estate. Over the past two years, fine wine has outperformed gold and crude oil, with some wines seeing significant price increases. 

This growth is driven by the limited supply of high-quality wine and the growing global demand, particularly from emerging markets like Asia and Latin America.

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The wine market in numbers

The wine investment market in 2024 is starting to show signs of stabilization and possible recovery after a period of correction. Over the last 12-18 months, wine prices dropped by about 20%, which is creating a good opportunity for investors looking to get in. Recent data suggests that the market may be hitting its bottom, with more trading activity and slower price declines across different regions. Prior to this bump time for wine, the longer-term historical view has been a positive story…

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The Liv-ex 100, which tracks the most traded fine wines globally, has performed well, with an 8% year-on-year growth rate as of 2024. Regional trends are mixed—Burgundy and Rhône have remained fairly strong, with slight declines of just -1.03% and -0.89% respectively in Q3 2024. On the other hand, Bordeaux has faced more challenges, with a -4.40% drop in the same period. Italy has been one of the more stable regions, with the Liv-ex Italy 100 benchmark showing a -2.1% decline in H1 2024, outperforming the broader Liv-ex 1000 (-6.3%).

Looking ahead, the wine investment scene presents potential for long-term investors. 

With interest rates expected to decrease and wine prices showing signs of stabilization, the market could be primed for growth.

Fine wine has historically provided average annual returns of 10% since 1988, with a well-rounded wine portfolio showing positive returns every 5-year period between 2004 and 2024, averaging 8.76% annualized returns. Given the ongoing global economic uncertainties, fine wine remains a solid option for diversifying your portfolio, offering low correlation with traditional assets and steady long-term growth potential.

• Bordeaux: Iconic vintages (2000, 2005, 2010) delivered annual growth rates of 8-10%.
• Burgundy: Continued to dominate performance metrics, with top producers leading the market.
• Champagne: Saw significant growth, contributing to record sales in emerging markets.
• Napa Valley: Cult wines achieved annual growth rates of 10-12%5.
• Italy: The most stable region, with the Liv-ex Italy 100 benchmark recording a -2.1% movement in H1 2024, outperforming the broader Liv-ex 1000 (-6.3%)

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How to invest in wine

There are lots of ways to invest in wine, and the best option depends on your budget, goals, and how hands-on you want to be. Let’s break down some of the most popular ways I’ve found to get started.

Investing in Wine Bottles

Who it’s best for: If you're a wine enthusiast with the time, interest, and money to research individual bottles and store them properly, this could be a great fit.

Pros:

✅ You have full control over your wine collection

✅ You can find good deals if you know where to look

Cons:

❌ Requires proper storage, like a wine cellar

❌ You’ll need in-depth knowledge to make smart investments

Buying individual bottles of wine is one of the most common ways people get into wine investing.

You can find these wines through secondary markets and auctions. While it’s possible to grab some investment-grade wine for under $30 on sites like WineBid, you’ll likely need thousands of dollars if you want to focus on wines that could increase in value.

Once you’ve made your purchase, storage is key. You’ll need a cellar to keep your bottles away from sunlight and maintain the right temperature. It's also a good idea to check into home insurance that covers wine.

How to invest: You can buy and sell wine on auction sites like WineBid, Sotheby’s, and Christie’s. If you want to sell later, keep in mind that auction houses usually take a commission. In some cases, you can buy directly from producers, though this requires more planning.

Investing in Wine Futures

Who it’s best for: This option is perfect for those who want to buy wine at its first release and are comfortable with a bit of uncertainty on whether its value will grow. Plus, you need the space to store wine properly.

Pros:

✅ You get early access to wines before they’re bottled

✅ You can own the wine right from its release

Cons:

❌ You’ll have to wait at least 18 months before receiving your wine

❌ You’re responsible for storing it and managing any potential risks

Wine futures (or “en primeur”) allow you to buy wine before it’s even bottled. You’re basically betting on a wine’s future value, but the process can open doors to rare vintages. You’ll often find options like Bordeaux offered this way.

The catch? You’ll likely have to wait between 18 months and 3 years before receiving your bottles, so it's a longer-term play. You can often buy wine futures for under $200, but they could appreciate significantly by the time they reach your hands. Just remember, you’ll need proper storage once the wine arrives.

How to invest: You can purchase wine futures through sites like Sotheby’s, Wine.com, and Total Wine.

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Investing in Wine Stocks

Who it’s best for: If you want exposure to the wine industry without the hassle of managing bottles, this could be the right choice.

Pros:

✅ It’s easy to access with smaller amounts of money

✅ No need to store the wine yourself

Cons:

❌ The appreciation might not match that of an actual bottle

❌ It’s a more abstract investment since you don’t own physical wine

Rather than buying bottles, you can invest in wine stocks. This lets you tap into the wine market by buying shares in companies that produce or sell wine. It’s a more passive way to invest—just buy shares and wait for the company to succeed.

Here are a few stocks to consider:

• Constellation Brands, Inc. (STZ): A distributor of wine, spirits, and beer
• Duckhorn Portfolio, Inc. (NAPA): A producer of wines under popular brands like Duckhorn Vineyards and Decoy
• Willamette Valley Vineyards, Inc. (WVVI): A major Pinot Noir producer in Oregon

You can also invest in wine-focused ETFs like the Wine Source Fund or Vini Sileo Vineyard Fund, though keep in mind that these funds can tie up your capital for years.

Pro tip: Broaden your approach by considering food and beverage ETFs, which include wine companies. For example, check out the AdvisorShares Restaurant ETF (EATZ) or the AdvisorShares Vice ETF (VICE).

How to invest: You can buy shares of wine stocks or ETFs through any app that supports individual shares, like Robinhood or Stash. These apps also allow you to buy fractional shares, so you don’t need to invest a large amount all at once.

Investing in Wine through a Dedicated Platform

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Who it’s best for: If you’re new to wine investing and want to get your feet wet without worrying about storage or deep knowledge, platforms like Vinovest might be a good fit.

Pros:

✅ You can access a wine portfolio with a relatively small investment

✅ No need to store the wine yourself

Cons:

❌ Annual management fees can be over 2%

❌ Depending on the platform, you might not get to choose which bottles you invest in

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Platforms like Vinovest let you invest in wine without the hassle of storing it.

They handle the curation and storage for you, which makes it a great option if you want to start building your portfolio with wine but don’t have the expertise or space to store it. You can start investing with as little as $1,000, and experts will manage your collection.

How to invest: To get started with Vinovest or a similar platform, sign up, deposit at least $1,000, and answer a quick questionnaire. The platform will build your wine portfolio for you, and you can buy or sell bottles whenever you want.

Hope this was a useful guide!

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Jason

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DISCLAIMER: None of this is financial advice. Finbrain is strictly for educational purposes.

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