Investing in wine is often a dream for enthusiasts. As it happens, these investments can also turn out to be extremely profitable. Investing in wine can generate big returns while indulging your passion. In this article, we’ve gathered all the ways to invest in wine. By the end, you won’t be an expert, but you’ll have the first foundations to invest in wine.
Why invest in wine?
There are several reasons to invest in wine. The first is the pleasure such an investment can bring. The second is the return on this kind of investment.
Investing: a pleasure
First, investing in wine lets you step off the beaten investment paths and focus on a field close to your heart. From 2008 onwards, we saw a loss of trust in conventional financial products because of the crisis. From then on, it became worth turning to other products, such as wine.
What’s more, investing in wine is a chance to make the most of a product close to your heart. By focusing on a field that interests you in particular, investing has never been so easy and enjoyable.
A proven return
!Winedex - wine investmentFinally, investing in wine offers a strong return compared with traditional financial investments. The auction site Idealwine built an index comparing the CAC40 with the change in wine values over time.
This graph shows that investing in wine, whatever the region (Bordeaux, Burgundy, or Rhône), delivers a higher return than a traditional financial investment in CAC 40 shares.
That said, it’s now worth focusing on how to invest in order to achieve this return. Investing in wine can be a very good idea for earning extra income, but you need to know how. The rest of this article is dedicated to the ways of investing in wine.
The ways of investing in wine
There are different ways to make a financial investment in wine. Whether by buying fine wines en primeur or by investing in an estate, there are various ways to put money into wine. Be careful, though: these wine investments come with different levels of return.
Buying fine wines en primeur
We’ve already explained how to buy your wine online. It’s also possible to buy wines en primeur, that is, before they’re even bottled. By doing this, you can buy a bottle of wine for a relatively low price. The owner of the bottle can then resell it for more a few years later.
Buying fine wines en primeur and reselling them can prove extremely profitable. However, you need to be careful to invest in wine at the right time (depending on the vintage) and in the right estates. If you want a low-risk investment, fine wines are naturally for you. They do require a significant outlay, though, which lowers the return on your investment.
Conversely, if you’re willing to take a few risks, you can turn to smaller or lesser-known estates. The price per bottle is lower and the return can be substantial, provided you’ve made the right choices, of course.
Finally, if you keep the bottles bought en primeur yourself, take care of how you store them. It would be a real shame to lose your whole investment because of a poorly maintained cellar.
Lastly, note that some companies can handle the buying and reselling of fine wines for you. That’s the case with a Bordeaux company that lets you invest in wine: U’Wine. This company may even be the subject of a wine podcast soon, so stay tuned!
Vineyard land grouping
Another way to invest in wine lies in the Groupement Foncier Viticole (GFV). It’s a company whose purpose is to own the vines (not to farm them). In other words, a company is set up to hold the vines and lease them to winegrowers.
The capital of each Groupement Foncier Viticole is divided into shares that you can buy in order to invest in wine. The income from this investment is paid once a year in two forms: rent and/or bottles of wine from the property.
The GFV is a rare investment but a particularly interesting one for investing in wine and diversifying your income. Companies like Terra Hominis or GFV Saint Vincent can support you in these investments.
Savings backed by fine wines
Savings backed by fine wines is a purely financial product. It’s an offer that lets you place your money in the form of fine wines. Unlike buying wines en primeur, this time you don’t own the bottles of wine. It’s a way to invest in wine through a pure financial product. So it appeals a little less to lovers of wine and vines, but it can be a good solution for diversifying your savings.
Crowdfunding an estate
Crowdfunding an estate isn’t really a financial investment in wine. It’s more like a gift to a winegrower who will reward you with bottles of their wine in most cases. It can be a good idea if you want to see a particular estate grow, or simply to put your money to work for the vines. That said, don’t expect a big return on investment. Beyond investing in wine, crowdfunding an estate is a chance to treat yourself.
Selling wines at auction
If you have a well-stocked wine cellar or you’ve inherited some lovely bottles, you can make money from them by selling them at auction. To do this, look up your wine’s market value using various sites. You can then sell them yourself or on platforms like Idealwine.
Be sure to store your bottles well if you ever plan to sell them. A low fill level or a damaged label naturally lowers the value of your bottle. Investing in wine means pampering your bottles.
Becoming a shareholder in an estate
Becoming a shareholder in an estate is the ultimate way to invest in wine. Opportunities to become a shareholder in an estate are rare and, above all, not very public. Yet it’s a chance to put your money into a genuine gem. Investing in wine by becoming a shareholder in an estate lets you become a part-owner. A recent, high-profile case is the sale of 20% of Pétrus by the Moueix family. Such a deal naturally made a big splash in the wine world.
François des Roberts, a member of the executive committee at the famous Edmond de Rothschild bank, was interviewed a few years ago about this way of investing in wine. You’ll find his answers in this article.
Hosting tasting evenings
Hosting tasting evenings is the way to invest in wine that requires the least starting capital. To do this, you can choose to host your own evenings, picking the wines you want to present. You can also turn to companies such as Pinot Bleu or Les Vins d’Hélène, which will give you a turnkey kit for hosting these evenings. Beyond investing in wine, these evenings are a chance to have a great time and share your passion.
Tips for investing in wine
Now it’s time for us to give you a few tips for investing in wine. These tips will help you make your investments profitable and avoid the risks.
Diversify your investments
Like any good investor, you need to diversify your investments. A vintage isn’t good in one region? It’ll be better in another. You can also mix fine wines with lesser-known but very promising estates. With that in mind, you can invest in wine by diversifying your investments to limit financial risk and maximise your return.
Be sure to choose the right vintage
Investing in the right vintage is the key to your investment’s financial success. For that, you can refer to the tables produced by many sites such as IdealWine, La Revue du Vin de France, Le Figaro Vin, and plenty of others.
What’s more, if you’ve chosen to invest in wine by buying en primeur, remember to follow the specialist press and tasting reviews. These will help you form a view on the quality of the vintage and on whether your investment is worthwhile.
Follow how the market moves
A final tip for investing in wine: follow how the market moves. Stay informed and keep up with what’s happening in the wine world. To do this, read Wine Makers Show (yes, really) and the whole specialist press. You’ll see, investing in wine is a real passion, and you’ll develop an incredible taste for it over time.
Conclusion on investing in wine
Investing in wine takes time. That’s the last warning we wanted to give before letting you invest in wine. Learn to invest, read a lot, stay informed, and enjoy it! Investing in wine is a chance to make an investment close to your heart, so make the most of it.
