Five Companies Turning Wine into an Asset Class

Political upheaval in the UK might be turning people to the bottle for different reasons, but fine wine is an increasingly attractive prospect to investors.

Wine, as an asset class, increased by 9% in 2018, according to the Knight Frank Luxury Investment Index, with a ten-year increase of 147%. A single bottle of La Romanée-Conti 1945 sold for US$558,000 at Sotheby’s – its upper estimate was US$32,000 – and Knight Frank’s Burgundy investment was up 33% in 2018, with Grands Crus from Raveneau, Romanée-Conti, Roumier and Rousseau leading the charge.

According to a Zion Market Research report, the global wine market was valued at approximately US$302.02 billion in 2017 and is expected to generate revenue of around US$423.59 billion by the end of 2023, growing by just under 6% in the coming five years,

Interestingly, whilst Western European wine consumption fell by 5% between 2010-17, e-commerce increased by 66%, according to Rabobank, highlighting that digital technology is bringing new players into the market.

These companies are all innovators, using different strategies not only to guide wealthy collectors, but also in some cases trying to appeal to everyday investors who may not have previously considered wine as an investment opportunity:

Cru: Cru believe in the power of data to help investors make the right decisions in the wine market. Chief Executive Jeremy Howard’s background is in Convertible Bonds Trading & Analysis with Deutsche Bank and Goldman Sachs, and it is that financial expertise which he is using to democratise the industry. The business brings the world of fine wine together under a state-of-the-art digital platform through which clients can build their portfolio.

Liv-ex: Founded in 2000 by stockbrokers James Miles and Justin Gibbs, who wanted to make fine wine trading more transparent, efficient and safe. Liv-ex’s online market provides trading, data and settlement services to wine merchants across the globe.  Transparency is the buzzword, with Liv-ex emphasising their commitment to creating an online space that helps over 400 merchants worldwide use data and insights to make the right decisions for their customers and grow their businesses.

Aston Lovell: Aston Lovell style themselves as the Fine Wine Platform, and similar to Maecenas in the art world, they are using their online platform to make the wine market more readily accessible to investors. The numbers are attractive to entry-level investors, with Aston Lovell happy for clients to invest from as little as a few hundred pounds, though the recommendation is to start from £3,000 for the best chance of a return. They emphasise the role of a personalised account manager as crucial in guiding investors through an intimidating market.

Berry Brothers: Trading from the same shop on St James’ street since 1698, Berry Bros. & Rudd has aged to perfection as the oldest wine and spirit merchant in the United Kingdom. They operate at the top end of the market, and Berry has its own unique trading platform, BBX, which is a fine wine marketplace offering the most exclusive vintages to private individuals. It’s not just history that is on Berry Bros. & Rudd’s sign, they also have a strong international presence, with offices in Japan, Singapore and Hong Kong.

Cult Wines: Cult Wines put the ball into the investor’s court with their Fine Wine Investment Guide, which anybody can register to download from their website. This empowering of investors looking to make an entry into the market is a different approach, and an intriguing way to make the key industry information accessible. Chairman Philip Gearing spent twenty years in investment banking, so is another leading figure who has translated their business nous to the fine wine investment world.

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