Where Will the Smart Wine Money Go in 2017?

Every wine buff knows that Burgundy and Bordeaux are both very popular wines. What only the experts know is that Burgundy has been statistically outperforming Bordeaux for the last number of years, at least until recent months.

Let’s Look at the Numbers

The beginning of 2012 was also the start of a 50% rise for Burgundy wines that continued until at least 2016. During the same period Bordeaux wines fell by almost 20%. This was after the Bordeaux bubble that happened from 2009 to 2012 suddenly burst, and hailed the slow and steady decline. In January 2016, everything drastically changed.
Wine consumption
Although the market indicators showed a dismal performance from Bordeaux, it continued to remain popular, and this popularity finally started showing up in the numbers. In the months between January and September of 2016 all indices increased by at least 10%, finally showing excellent growth potential. After years of declining numbers, Bordeaux is once again on the upward trajectory. While Burgundy is also showing growth, two Bordeaux indices are paving the way. First Growths are up by 13.5% and the Bordeaux Medoc Classed Growth index rose by 16.5%. It is not only Bordeaux that is shooting up. Blue Chip Burgundies have also risen by 11.3%.

The Battle of the Bottle

If there was a competition between the two, all bets would certainly be placed on Bordeaux being resuscitated. It is also interesting to note that despite the numbers of the past few years, Bordeaux continues to be well-loved and well-chosen, time after time.

Predictions for the Next Year or Two

All the signs are there. The rapid improvement of Bordeaux in recent months heralds a time of increased interest in an already eminent brand, and prices may well rise even more dramatically than Burgundy prices have in the past few years. This doesn’t mean that Burgundy will succumb to a rapid rise and crash cycle the way that Bordeaux has. Like Bordeaux, even when short-term investments may be slightly affected, other factors, like reduced yields the past year, will drastically push up release prices in the coming years. Fine wine investors can rest assured that both the Bs remain relatively safe investment options.

Whites for the cellar

Riesling Grapes
Riesling Grapes (source: Wikipedia)

When we talk about wine investment we seldom mention white wines, and least of all dry whites – it is true that dessert wines can age majestically but their dry counterparts are not known to age particularly well. This is largely due to the fact that red wines are high in tannins, which help them to age, and white wines have significantly less tannin. However there are a few exceptions among dry whites that deserve a bit of time in the cellar in order to fully reach their potential.

The best white Burgundy

The best Chardonnay in the world comes from Burgundy and while the grape is not known for wines destined for the cellar, the sheer complexity of the top white Burgundies can take a few years to emerge. The best wines from top producers will benefit from cellaring in order to become rich, deep, and complex. Continue reading

In search of DRC

DRC-LaTache-Labels (Wikipedia)In spite of the global popularity of Bordeaux, a wine from Burgundy has eclipsed the first growths for the second time in a row to top Sotheby’s rankings in 2014. Although wines from Bordeaux dominated the overall sales as usual, it was a lot of 114 wines from Domaine de la Romanée-Conti, known as DRC, that hit the headlines with a record-breaking HK$12.5 million when it was sold in Hong Kong last year, which is equivalent to US$1.6 million.

Legendary status

For many of even the most avid wine collectors DRC will remain an elusive wine – Burgundy’s entire production is tiny compared to the phenomenal annual output of Bordeaux, and so it is no surprise that the wines of this legendary estate have achieved something of a legendary status. So, what’s so special about them? Continue reading

Discovering the Rhône Valley

At the end of a challenging year across France’s wine regions, it’s great to hear that the Rhône valley has had a larger harvest than 2013, and early signs are that the 2014 wines will be ones to watch. One of the Rhône’s most renowned producers, Michel Chapoutier, has remarked that lower temperatures have contributed to the creation of wines that will demonstrate the individual character of the wines within each appellation.

Household names

Rhône valley 2014 vintage will be a good year?
Rhône valley 2014 vintage will be a good year? (source: Wikipedia)

Historically the Rhône has lagged behind Bordeaux and Burgundy in terms of the global popularity of its top wines but as prices have soared in both rival regions, many savvy investors as well as drinkers have turned their attention to the Rhône. Some of the appellations have become household names, widely associated with quality – wines like Châteauneuf-du-Pape can be found in any British wine merchant or even supermarket. Quality is generally high but there is great variation between wines and vintages, with 13 permitted grape varieties within the appellation. Grenache is often the dominant grape in the top wines from Châteauneuf-du-Pape. Continue reading

Cautious optimism for 2014 Bordeaux vintage

It has been a tough year in Bordeaux, and on the back of negative press surrounding the lacklustre en primeur campaign for the 2013s, much sympathy has been felt for growers this year. As July brought unseasonably cold conditions, and August brought extensive rain, it seemed like nothing could salvage 2014.

The Indian summer that saved Bordeaux

Chateau Mouton-Rothschild
Chateau Mouton-Rothschild

But a bright, sunny September has done just that, and far from being a salvage operation, it is starting to look like 2014 could be rather a good vintage. As the Merlot grapes are being picked, it has become apparent that they are in impeccable condition. Very little sorting has been required indicating exceptional quality, and this is a good sign for the Cabernet grapes that will remain on the vines a little longer before they are picked. In 2013, the inconsistency in quality of the grapes required an immense effort to sort them in order to achieve the precision required at this crucial point in the harvest. Chateau Mouton-Rothschild reportedly required almost 700 pickers in one day. Additionally, the quantity of grapes in 2014 is large – which is great news for growers since 2013’s harvest was relatively small. Another small harvest could have caused substantial problems in supplying the market. Continue reading

A Toast to Burgundy

iStock_000016005088XSmallLo and behold, it’s the fine Burgundy’s turn to share in the investment limelight and its investors are joining in the general euphoria resulting from the strong wine performances in 2013. According to the Liv-ex 100 index, the fine wine market has shown healthy gains in four consecutive months of this year and now stands at 8.7 percent higher than November 2012. A collector of market data, Cellar Watch is pinning much of that rise on renewed interest in Burgundy. Some of those top sellers were the Pape Clement 2010, which gained 45% in value and Pichon Baron 2004, whose value increased nearly 20%. On top of that, Bordeaux is still holding up its end of the market with gains of 6.8%. The race will be closely watched to see if Burgundy, which is enjoying prices that exceed £2,000 per bottle, can sustain its growth and keep up with the more traditional Bordeaux that is typically included in financial portfolios.

Trustworthy as a Stable Investment

Although the Baroness Rothschild would like to remind us that wine is intended for consumption, it has also shown itself to be a profitable investment. While it’s a fact that some wine collectors buy fancy vintage to show off their social status, this is nothing new. In fact, different grades of wine were matched with guests at Roman banquets and served according to their social status. Today, the majority of those who buy bottles or cases of wines from the best estates do so for investment purposes. They are usually bought through a wine merchant or fund and sent straight to professional storage centers. Investment in fine wine tends to stand steady even throughout recession and can add a safe diversification when mixed in with stocks and more traditional investments. Even with fluctuations in the market, a case of fine French wine that could have been picked up for £4,000 a few years back will now cost closer to £8,000.