Wine Investment Adviser Q2 Report

Launched in June, Wine Track makes it easy to identify the right, undervalued wines to buy and sell across the global market at the right time writes Christian Leeming

 
It collates and analyses Liv-ex and Wine-Searcher data, along with over 400,000 wine prices a day collected independently from 250 leading wine merchants across the globe. It monitors over 75,000 investment-grade wines from 1990 to the present day, helping you navigate fine wine markets with confidence.

It’s Q2 2022 review shows that at the top end, Burgundy and the Rhône led the market with wines from several major deliverings, highlighting the breadth of the wine investment market.

Here is a summary; click below for the full report:
 

Executive Summary

 
Welcome to our Q2 report, examining the trends that shaped the fine wine market over the past three
months. We’ve taken a closer look at how inflation and the possibility of recession have impacted fine wine, the success of the 2021 Bordeaux En Primeur campaign, the top-performing regions and the most in-demand wines. Our key findings include:
 
• Fine wine proved itself as a stable investment in the second quarter of the year,
which was characterised by exacerbated economic pressure. Prices continued their
steady ascent and even outperformed safe haven assets like gold.
• The best-performing wines were blue-chip labels, hinting at increased caution in the
current economic situation.
• Bordeaux’s trade share went up 3% and the 2021 Bordeaux En Primeur campaign
stimulated interest in previous vintages.
• Wine Track, our newest tool, launched in June. It helps you track wines’ price
performance over any given period.
• Burgundy and the Rhône experienced the biggest price rises.
 

The Fine Wine Trends that Shaped the Market

 
Fine wine proved itself as a stable investment in the second quarter of the year, which was
characterised by exacerbated economic pressure. Sharply rising labour costs, energy prices and interest rates have driven inflation higher on a global scale. The wine industry itself has felt the impact, with the cost of bottles, labels and wood up over 25%¹ and limited supply of materials. Meanwhile, Nomura economists suggested² that the US economy will likely fall into a recession by the end of 2022 as the Federal Reserve raises rates to tame prices.

Despite deteriorating global growth outlook, fine wine has been resisting inflation and recession³ fears, due to its inherent tangibility and scarcity. Burgundian wines, in particular, delivered impressive returns this quarter. The leading fine wine indices made upward moves, although smaller than this time last year.

The Fine Wine 100 index rose 0.7% for four months in a row. Its cautious rise reflected the current
economic landscape and the narrowing focus of buyers. Many turned to blue-chip labels that are
proven winners in an investment portfolio.

The Fine Wine 1000 index consistently outperformed the 100 index, showing that diversity is key to the market’s ability to weather the deteriorating economic situation. Burgundy was the best-performing region, with prices for its top wines rising 8%. On the secondary market, it enjoyed unseen levels of demand mid-June. Typically sitting at about 25%, its weekly market share increased to over 38%.

While Burgundy continued to break secondary market records, the prevailing theme of the quarter was
Bordeaux, with the launch of its 2021 vintage. For the first time since the start of the Covid-19 pandemic, merchants and journalists returned to the region for the annual En Primeur tastings.

Critic reports suggested that 2021 was better quality than expected, with excellent dry and sweet whites. Many including Jane Anson, Neal Martin, Antonio Galloni and Lisa Perrotti-Brown MW gave some of their highest scores to dry Bordeaux whites. Indeed, it was the whites that saw the biggest price increases on last year, backed up by critical acclaim and tiny volumes.

In general, the pricing of the new releases was in line with the 2020 vintage – just 1% lower on average.
Some châteaux released at up to 15% discounts, while others at up to a 15% premium. But the new
vintage was met with lower global demand; partly due to the irregularity of the campaign, interrupted by industry events like ProWein and London Wine Fair and the availability of older vintages like 2014 offering more value.

The First Growths and their second wines, Châteaux Lafleur, Calon Ségur, Les Carmes Haut-Brion, Ausone and Cheval Blanc were among 2021’s biggest vintage successes.

The next release campaign in early September will see many more new names join La Place de
Bordeaux, including a first from New Zealand – Craggy Range – and the second Champagne label, Le
Clos Lanson. The third quarter will also further test the robustness of the fine wine market.

¹ _{Vinous.com/articles/2021-bordeaux-en-primeur-back-to-classicism-may-2022}
² _{Bloomberg.com/news/articles/2022-06-20/us-recession-this-year-is-now-more-likely-than-not-nomura-says}
³ _{WineCap.com/learn/wine-investment-market}
 
Download the full Q2 2022 report and Q3 outlook here >