In the most economically challenging period in 30 years fine wine investment continues to grow and protect capital, but which are the best investment wines?
Q2, 2022 wine investment performance
- Wine investments record average growth of 4% in Q2 and 11.1% in H1 2022
- The Liv-ex Burgundy150 is the leading regional index in Q2 and has grown 8%, where the FTSE 100 has declined -6.5% and the S&P500 fell -9%.
- Champagne is the regional price growth leader in in the 12 months to the end of Q2 2022, rising 50.8%, just pipping the Burgundy 150’s 50.3% increase
- Rhone is an emerging market with rising demand and investor returns
- Top performing investment wines have seen price growth approaching 50% in the first half of 2022.
Data source: Liv-ex at 30.06.2022
Top 10 wines for investment growth in 2022
Region | Wine | Vintage | Growth % | Market £ |
Rhone | M.Chapoutier, Ermitage Le Pavillon | 2014 | 48.2% | £1,860 |
Burgundy | Dom. Armand Rousseau, Chambertin | 2014 | 48.1% | £41,850 |
Burgundy | Dom. Leflaive, Batard-Montrachet | 2011 | 38.5% | £15,350 |
Rhone | Dom. Jean Louis Chave, Hermitage | 2015 | 37.5% | £5,940 |
Bordeaux | Chateau Duhart-Milon | 2013 | 33.9% | £668 |
Bordeaux | Chateau Rieussec | 2015 | 33.3% | £400 |
Rhone | Beaucastel, Chateauneuf-du-Pape | 2010 | 29.7% | £981 |
Burgundy | Armand Rousseau, Chambertin | 2010 | 29.2% | £57,600 |
Champagne | Krug, Vintage Brut | 2003 | 27.1% | £3,275 |
Burgundy | DRC Echezaux | 2015 | 25.3% | £41,038 |
Source: Liv-ex.com July 2022 (Liv-ex trade Market prices 12 x 75cl at 30.06.2022)
Q2 2022 saw the regional mix of trade in fine wine broaden on Liv-ex from Q1's greater concentration and Burgundy and that region's releases at the start of the year. Burgundy and Champagne are still driving volume and value growth but rising demand for key wines from other regions are creating growth. Rhone has been on the rise in the last twelve months and accounted for three of the top ten wines for price growth in Q2, 2022.
Which are the best wines to invest in 2022?
The fundamental driver of the wine investment market is the finite supply each vintage of wines which are created to improve as they age, and become more valuable as they get rarer ove time. Those wines with an active secondary market are the most exciting for investors.
The most traded wines on the exchange in terms of value and volume are driven by well-recognised brands. Champagne, for example, has greater supply at first market entry than blue-chip Bordeaux, and much more so than Burgundy and California’s top labels which may have as little as 400 cases a vintage to satisfy global customers. Greater production levels provide increased market liquidity, and often more stability in price. This can be seen in the performance of top Champagne labels Louis Roederer Cristal and Dom Perignon, with vintages ranked in the top five wines traded on Liv-ex by value and volume.
Top traded wines by value and volume in Q2 2022
Most traded wine by value | Region | Most traded by volume | Region |
L. Roederer, Cristal 2008 | Champagne | Tignanello 2019 | Tuscany |
Screaming Eagle 2019 | California | Dom Perignon 2012 | Champagne |
L. Roederer, Cristal 2014 | Champagne | Ch. D’Armailhac 2019 | Bordeaux |
Carruades de Lafite 2019 | Bordeaux | L. Roederer, Cristal 2014 | Champagne |
Scarecrow 2019 | California | Sena 2017 | Chile |
Ch. Lafite Rothschild 2019 | Bordeaux | Tignanello 2018 | Tuscany |
Source: Liv-ex.com, July 2022 – data at 30.06.2022
Higher priced investment wines such as Burgundy’s Domaine Armand Rousseau 2010 at £57,600 or California’s Screaming Eagle 2019 with a case price of £37,025 (12 x 75cl) achieved these higher valuations in Q2 partly because of extremely low supply. Their quality and 'brand appeal' attracts such demand from their key markets to often drive prices to five and six figure sums. Bordeaux First Growth, Chateau Lafite Rothschild has routinely been in the top traded wines by value and volume, as supply is significantly more plentiful than Burgundy's DRC wines, for example.
Burgundy has been a key driver for growth in the last few years and is the highest performing region in Q2 2022, with an average 23.9% growth in value for its wines. Top labels Domaine de la Romanée Conti, Armand Rousseau, Leroy and Leflaive are some of the most aspirational wines in the world to own and their small supply can command outstanding values. Four of the top ten price performers in Q2 are from the region with growth between 25% and 48% in just three months.
Investors don’t have to acquire wines at these price levels to achieve strong value growth. A case of Krug 2008 saw its value rise 27.1% to £3,275 in the first half of 2022. Other wines priced at under £1000 are seeing strong growth, for example Chateau Duhart Milon 2013 saw its price rise 33.9% in the first half of 2022. Investors need to consider whether there is truly a secondary market in these labels and discuss this with their wine investment specialist, before acquiring for investment purposes.
What trends are shaping wine investment portfolios in 2022
Wine investors should look to build and diversify a wine portfolio by investment wine region, producer (brand), and by vintage, with consideration to emerging markets and individual opportunities for growth.
Average investment wine value growth by region in the first half of 2022:
Liv-ex regional index | Q1 | Q2 | YTD |
Burgundy 150 | 14.6% | 8.1% | 23.9% |
Champagne 50 | 9.6% | 2.7% | 12.5% |
Rhone 100 | 5.1% | 3.5% | 8.8% |
Rest of the World | 6.8% | 1.2% | 8.1% |
Italy 100 | 4.6% | 0.5% | 5.2% |
Bordeaux 500 | 2.7% | 1.2% | 3.9% |
Liv-ex 1000 | 7.2% | 3.6% | 11.1% |
Source: Liv-ex.com, July 2022 – data at 30.06.2022
Conclusion
As an asset, fine wine is outshining the traditional inflation hedge, gold, in 2022. Gold is struggling to achieve growth in the year to date and prices fell by -2.5% in June 2022 and cumulatively by -0.8% in the first six months.
The comparison with equities is even more stark, the key US index S&P 500 plunged -20.6%, the FTSE suffered a more sedate decline -3.4%, where wine investments delivered 11.1% growth to the end of the first half of 2022.
Fine wine assets are a safe haven for capital in 2022 delivering growth and resilience as we face the most testing economic conditions in decades, offering investors a strong option to diversify portfolios and improve returns. For more information on the best wines to invest in inside 2022, contact one of our expert portfolio managers and see our latest fine wine market report.