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‘Investment Wine’

What is En Primeur Investment?

Bordeaux en primeur is a type of wine investment where buyers purchase wine before it has been bottled and aged. The process begins in late summer/ early autumn, when the grapes are harvested. The grapes are usually fermented in stainless steel or concrete tanks and then aged in oak barrels for a period of 12-24 months.

After the ageing process is complete, the wine is bottled and released for sale as “en primeur”. This means that the wine is being sold before it is actually available to drink. The wine is then shipped to the buyer, typically a couple of years later. This can then be stored under bond, free from VAT and import duty, for many more years in bottle.

What are the advantages?

One of the main advantages of investing in Bordeaux en primeur is the potential for a high return on investment. As the wine ages and improves in quality, it also becomes rarer and its value can increase significantly. Additionally, Bordeaux wines are highly sought after by collectors and wine enthusiasts, which can also drive up the price.

Another advantage of Bordeaux en primeur is that it allows buyers to purchase wine at the release price which is often lower than if they were to buy it on the open market. This can be a great opportunity for wine enthusiasts and collectors to acquire high-quality wines at a more affordable price.

In Summary

Bordeaux en primeur is a type of wine investment where buyers purchase wine before it has been bottled and aged. The process begins with the grape harvest in the Autumn, the grapes are fermented, aged in oak barrels, and then bottled and released for sale as “en primeur” after the aging process is complete. The potential for a high return on investment, the opportunity to purchase wine directly from the winery at a lower price and having perfect provenance are some of the advantages of Bordeaux en primeur investment.

We are in our 9th year of Bordeaux En Primeur Investment, with over 4 million under management. If you are interested in hearing more about the Bordeaux 2022 campaign or you would like to get involved, do get in touch.

 

Edward Stevens
Sales Manager
Waud Investment Wines Limited
edward.stevens@waudwines.com

Fine wine investment has seen another year of strong performance. The Liv-ex Fine Wine 1000 Index, which tracks the performance of the 1000 most sought-after wines, has seen a return of 13.1% over the last 12 months. This outperformance has been driven by a growing global market for fine wine, as well as increased interest from investors seeking alternative assets to traditional investments like stocks and bonds. In particular, fine wine has proven to be a relatively stable and consistent performer in the face of economic uncertainty. Additionally, the ongoing COVID-19 pandemic has increased demand for fine wine as people spend more time at home and seek out luxury goods.

Bordeaux wines, in particular, have been a consistently strong performer in the fine wine market. The Liv-ex Bordeaux Legends 40 Index, which tracks the performance of 40 Bordeaux wines, has seen a return of 8.5% over the past year. Bordeaux continues to be the most traded region on Liv-ex with a monthly regional share of 38.3% for December. This is due to the high demand and prestige associated with Bordeaux wines, as well as the limited supply of certain vintages. Additionally, Bordeaux wines have a long history of aging well, which makes them an attractive option for long-term investors.

Edward Stevens
Sales Manager
Waud Investment Wines Limited

A Liv-ex article published on the 18th May 2022. 

The UK Consumer Price Index (CPI) hit 9% in April, the highest level in 40 years.

The CPI reflects the prices of a basket of consumer goods and services known as ‘normal goods’, such as transportation, food, and medical treatment. According to many economists, these normal goods have no potential investment value during times of inflation. 

By contrast, several asset classes perform well in inflationary environments. For example, real estate, gold and other luxury goods are often popular inflation-hedging investments options.  

How does inflation impact fine wine?  

Luxury Goods’ are the opposite of necessity goods as they tend to be sensitive to a person’s income or wealth (as wealth rises so do purchases of luxury items). As inflation continues to rise, one would think that the performance of luxury goods would decline. However, as corporations strive to keep wages up-to-date with inflation, luxury goods are also seeing increased demand. For example, luxury group LVMH, just announced a 23% growth in Q1 2022 revenue 

Fine wine is a combination of investment and a luxury good. It has ‘an active secondary market’ and both inherent tangibility but also scarcity (especially over time). As such, it tends to perform well during times of uncertainty and inflation.  

The chart below compares fine wine, stock and housing investments to the CPI. As you can see, the performance of the Bordeaux 500 and Liv-ex Fine Wine 100 indices mirrors the pattern of CPI, rather than stocks (FTSE100) or housing (HPI).  

Fine wine would appear to be a wise investment for inflation protection. With inflation rising once more, collectors may be taking note. 

The iconic investment grade wine from California was released today – it is a blend of Cabernet Sauvignon (84%), Petit Verdot (6%), Merlot (5%), Cabernet Franc (4%), and Malbec (1%), spent 17 months in new French oak. The joint Rothschild/Mondavi project was one of the earliest adopters of La Place, all the way back in 2004.  

Critical Acclaim

This is our 4th Opus One vintage and this super wine has received improved scores on last year.

Antonio Galloni at Vinous rated the 2018 Opus One a score of 95-points. In his tasting note, Galloni observed: “Silky tannins and lifted, perfumed aromatics add to an impression of finesse that distinguishes the 2018 from some of the preceding vintages in a pretty big way”. 

Lisa Perrotti-Brown at the Wine Advocate awarded it 98-points, and said that, “the 2018 Opus One soars out of the glass with bright, bold boysenberries, warm cassis and ripe, juicy black plums notes, plus emerging nuances of lilacs, oolong tea, cinnamon stick, tilled soil and black truffles”. 

James Suckling gave it 99-points, noting that this “lasts for minutes”. “So wonderful to taste now, but better after 2026”, he added. The wine also received 97-points from Jeb Dunnuck 

Performance

Prices for Opus One tend to move with time rather than being influenced by critic scores. As can be seen in the chart below, older vintages command steadily higher prices.

If you are interested in discussing your investment wine options – please follow this link and fill in the form. 

Event: Bordeaux 2020 En Primeur Campaign

Date: Wednesday 21st April 2021

Time: 18.00 – 19.00

In place of our investment evenings this year, we have decided to hold an on-line Investment Webinar via Zoom.  

During the Webinar, you will receive the up to date news on the 2020 vintage, the critics opinions, anticipated release prices and the overall financial prospects for us as investors.

We will also be reviewing the performance of our investments from 2014 onwards as these are now starting to both show well and provide good returns, including for those who have elected to cash in relatively early.

To provide additional clarity from those in the know, we will be joined for the session by one of our key négociants, Max Sichel of the famous Sichel family. Sichel are one of the oldest and most reputable négociants in the world and their business started in 1883 as Négociants, long before the acquisition of one of our favourite Margaux Estates, Chateau Palmer in 1938.

We are keen to address as many of our current and regular investors as possible at the webinar. We are also opening up the session to friends of investors who you think might consider joining one of our syndicates, or indeed forming one of their own.

Everybody who confirms their attendance for the event will be forwarded a bottle of Château Argadens, one of the Bordeaux Château under the ownership of Maison Sichel and a wine we are about to list. We hope this will make the event even more enjoyable for all!

If you would like to attend, please fill the form in below – and we look forward to sending you the wine in advance of the presentation.

Opus One 2017 has been released at £1370 per 6×75, a 6.8% decrease from the 2016 opening price of £1470 per case.

During the 2017 vintage in Napa, wildfires ravaged the Northern California area affecting both the size and taste (smoke taint) of the harvest. Antonio Galloni in his first impressions on the region, stated “readers will have to be very selective”, there are “some examples where smoke taint is impossible to ignore”. However, Lisa Perrotti-Brown informed that “Opus one had picked 91% of their fruit before the fires started in 2017, and only two lots were eliminated from consideration”. Volumes released however are said to be down 27% on the previous year.

Antonio Galloni awarded the wine 95 points, saying it is “one of the most complete wines of the vintage,” and “has a distinctly red-toned fruit profile that distinguishes it from the surrounding vintages”.

Lisa Perrotti-Brown also gave the wine 95 points, the top range of her barrel score (92-95). She observed the wine as “medium bodied, the palate has a lively skip in its step, featuring bags of juicy raspberry and cassis-laced fruits and a refreshing line, supported by ripe, plush tannins, finishing long and graceful”.

Prices for Opus One are not closely correlated to critic scores, instead the vintages have appreciated in price with the passing of time. The chart above shows an 81% correlation between the price of the wine and the bottle age.

We have taken our full allocation here – so if you are interested in joining our Opus One 2017 syndicate – please do get in touch. charles.waud@waudwines.com

2018 has been described as the best vintage in the past 20 years in Chile.

Seña was created as a joint-venture between Eduardo Chadwick and Robert Mondavi back in 1995, with the dream of making a wine that would show Chile’s full potential, a wine that would be welcomed, in time, among the world’s First Growths. Modeled on a Bordeaux style, it would have a Chilean soul given by its Carmenere variety, grown under the principles of biodynamic farming in the Aconcagua Valley.

Grape varieties: 55% Cabernet Sauvignon, 18% Malbec, 15% Carmenere, 7% Cabernet Franc, 5% Petit Verdot

Alcohol: 14%

Ageing: 22 Months – 85% New French oak barrels 15% Foudres.

It is the highest-ever scored vintage of Seña by the Wine Advocate, beating 315 other Chilean 2018s for 98 points from Luis Gutiérrez who says,“This has to be the finest vintage of Seña to date.” It has also been awarded the perfect 100 points by James Suckling who calls it, “a very intellectual Seña, with a glamorous palate, ultra-fine tannins and toned muscles”.

We have purchased a small parcel of Seña 2018 that is available to the market at £495.00 per six IB.

If you are interested in purchasing some of this wine – please contact charles.waud@waudwines.com

 

This was one of the most interesting vintages to come out in the past 5 years. Following great investment years in 2014, 2015, 2016 and 2017 – it was going to be extraordinary to have another belter… funnily enough, that is exactly what happened.

2014 – Classic vintage
2015 – Very Good vintage
2016 – Fantastic vintage
2017 – Classic vintage
2018 – Very Good / Fantastic vintage

Much of the commentary before En Primeur tastings in March and April was that 2018 was going to be up there in quality with 2015 – so therefore a Very Good vintage.

However after the critics scores came in, 2018 has suddenly gone up a level – and considered almost in line with some of the best vintages ever made – 2005, 2009, 2010 and 2016. Therefore 2018 is rated as a Very Good / Fantastic vintage.

Our Buying Strategy

Our selection and buying strategy continues to stay the same. We will only buy wines that we believe will offer our investors a return. Therefore, as the wines were considered to be nearly at the quality level of 2016, the release prices needed to reflect that.

Any wines that came out higher than the release prices of 2016, we tended not to purchase.

We have streamlined the wines that we have purchased to just over 30 wines. We have the all of the First Growths – Lafite Rothschild, Mouton Rothschild, Haut Brion and Margaux (Latour does not partake in En Primeur anymore). We then have a selection of the second wines from these chateaux – Carruades, Petit Mouton and Pavillion Rouge. Then other wines that also have a great track record of performing as real show stoppers and have a large demand on the secondary market; Rauzan Segla, Canon, Carmes Haut Brion, Calon Segur, Armailhac, Beychevelle, Leoville Barton, Lynch Bages and more.

Our Allocations

In this 2018 campaign, there has been a real flurry of interest in a relatively select number of wines. With volumes also down across the board, there was only a finite supply of these wines available, that have subsequently pretty much sold out. Therefore our expectation is that this is one of the drivers that will drive prices up accordingly.

It has been quite a tactical game in choosing the right wines for our customers this year. As our annual spend continues to increase year on year, our allocations of the ‘best’ wines continues to increase at the same rate.

In Conclusion

This has been a very good campaign for everyone that has invested with Waud Investment Wines – and we look forward to keeping you informed on how the wines perform over the next 5 years.