Why Should You Invest in Wine?

WINE INVESTMENT

For more than a century, wine lovers from all over the world have been attracted to the collection of French Grands Crus and grands vins. These prestigious products can now be considered as financial investments, perfect for those who wish to increase their wealth or invest in tangible assets. Moreover, investing in wine can be a real source of pleasure for wine lovers.

What is the point of investing in wine? This type of investment offers various advantages:

• Passion: The terroirs and the most emblematic vineyards have always been the object of a certain fascination. For the wine enthusiast, investing in Grands Crus and fine wine allows them to appropriate the results of a thousand-year-old know-how as well as a part of the cultural heritage.
• Indulge yourself: Investing in wine is also synonymous with pleasure. Above all, it is a product intended to be drunk and shared. Tasting, but also passing on, exceptional wines can only give pleasure.
• Diversifying your assets: Investing in wine is also a financial solution. Unlike traditional investments, this type of investment allows for interesting returns in the medium to long term. Note that in times of financial instability, investing in wine allows you to diversify your wealth with tangible assets that fluctuate little.
• Capital gain:  As wines can increase in value over time, they can be resold at a later date to realise a capital gain.

However, for your investment to be successful, it is important to have some knowledge of wine and its value. This will help you to know which wines to invest in. Ideally, you should already have a passion for this product. This type of investment will allow you to enjoy your wine collection while benefiting from a financial return.

FINE WINE: A PROFITABLE INVESTMENT

The value of fine wine has been increasing over the years, thus increasing the profitability of the investment not only for wine enthusiasts, but also for less experienced wine lovers who have understood this. Indeed, these wines are much more than just consumer products, they have become a profitable investment.

Classified Growths of Bordeaux en primeurs, Premiers Crus and Grands Crus of Burgundy: These wines meant for ageing increase in value over time. As these bottles of old vintages and other exceptional vintages in the making are bought, they become rare, which can lead to a sharp rise in their price in the years to come. This is a question of the law of supply and demand. On the one hand, wine lovers and investors buy and consume these good bottles, which become rarer on the market; on the other hand, demand remains strong. As a result, these beverages continue to increase in value, being able to be resold later at a much higher price than the original purchase price. Many people are therefore looking to invest in wine in order to realise a capital gain.

In addition to the rarity of the wines, the existence of the various classifications listing the best wines is also a parameter influencing the price. Unsurprisingly, the Classified Growths of Bordeaux listed in the 1855 classification are among the most expensive in the world.

For your investment to be profitable, you need to know how to bet on the best bottles. Also, choose carefully the regions in which to invest. Bordeaux wines are particularly well known, especially internationally, and can be easily resold, making them a profitable investment. Margaux, Pessac-Léognan or Saint-Émilion are among the best known appellations in the world. Moreover, by choosing the right vintage and storing your bottles properly, Bordeaux wines have a high ageing potential.

In addition to Bordeaux wines, Burgundy Grands Crus are also an interesting investment. Whether white or red, this wine region is also home to great estates such as La Romanée-Conti or Les Lambrays whose exceptional wines can be excellent investments.

To generate good profitability, the Rhône Valley is also a region with high potential. Some of the wines (Côte-Rôtie, Châteauneuf-du-Pape, Hermitage, etc.) from this wine region are now sold at very high prices.

INVESTING IN FINE WINE ONLINE

There are several ways to invest, but the most affordable and least burdensome is to invest in fine wines online. In some cases, you can contact an online wine cellar management company: the investment cellar will select the best wines for you to invest in. It is also possible to choose the bottles that will make up the cellar yourself from a selection carefully prepared by the online wine merchant, as is the case with the Vinatis site. The entity takes care of the storage of the wines, but also of their insurance. Note that some investment cellars offer these services with the Bordeaux fine wine.

Buying wine en primeur is another perfect way to invest in wine. Previously, buying wine en primeur was only done in different places, notably in châteaux, but nowadays the process is much simpler. Indeed, the sale of en primeur wines has become relatively simplified since it is now accessible online.

BENEFITING ON WINE INVESTMENT FUNDS: A MORE RESTRICTIVE METHOD

Investing in wine investment funds is one of the preferred methods for investors. In fact, you have to subscribe to specialised wine investment funds. In this case, you do not keep bottles in your cellar. You simply make a financial investment. However, there are some disadvantages to this type of investment. Indeed, the entry fees as well as the management fees of the funds are relatively high.

INVESTING IN WINE VIA A GROUPMENT FONCIER VITICOLE

Another recommended solution is to buy a vineyard plot. To reduce the purchase costs, which can be very high if you invest alone, you can join a Groupement Foncier Viticole. In practical terms, many investors pool their funds to invest in a vineyard. In other words, they create a company to become the owner of the vineyard. The operation is entrusted to winegrowers via a long-term lease. Each year, each investor receives rent and/or bottles of wine produced on the property, the value of which is equivalent to their share in the company's capital.

BECOMING A SHAREHOLDER IN A WINERY: MORE RARE

Although opportunities are rare and rarely revealed to the general public, it is also possible to invest in wine by becoming a shareholder in a winery. The shareholder becomes a part owner of the property. To become a shareholder in a winery, you can also use participatory financing. In this case, it is not really a financial investment, but rather a donation to a winemaker. The latter will reward you with dividends, usually in the form of bottles of wine. This second solution is particularly recommended to promote the development of a particular wine estate, but above all to please yourself. The return on investment is indeed minimal.