Not many people realize how valuable fine wine can be, although some are aware that really old bottles are indeed priceless. It’s quite incredible that a simple fruit like the grape can turn into such an exquisite beverage; but what makes wine turn into a profitable investment? Because only some bottles increase in value, and end up costing a few thousands. Wine is the result of fermented mashed grapes; its quality depends on several important factors, such as: vine age, climate, soil, vine genetics, and winemaker skill.
Each year, the weather changes thus bringing variation to final wine products classified as vintage wines. The genetics and soil never change; but as the vine matures, it yields less fruit; the flavor and aroma become much more intense, which means that the vintage has great chances of gaining tremendous value.
Fine wine – an exclusive beverage that can turn into a valuable investment
Major wine producing countries across Europe have attempted to qualify the notion of wine quality, so they finally chose to follow specific regions. Several regions and vineyards have been given historical meaning, so their quality factor is extremely high. The system permits wine experts to instantly recognize if a product is indeed worthy of becoming a valuable investment or not. France for example, is one of the world’s most notable wine regions. Its famous Bordeaux, Lafite Rothschild, Mouton Rothschild, Haute-Brion, and others, are now some of the most acclaimed and traded wine bottles in the world.
Price – ultimate indicator of quality
Price is usually the most important indicator of quality, although scarcity can make also the price increase at an insane pace. Investors must understand that not all wine types improve in quality and increase in price as they age. For that to happen, the aging potential of the wine has to be constantly monitored to determine the maturity level of the product. The checking has to be performed by experts who are compelled to taste the wine.
Investment grade wines are traded through auctions, and some of the world’s most notable auctions are in Chicago and London. Serious appraisers and wine collectors must know current retail pricing of popular wines, as well as the official results from the auctions to determine a wine’s value at that particular moment.
Fine wine – how much can a single bottle increase over time?
How valuable can a single bottle of wine become after a several years? Let’s have a closer look at a bottle of Chateaux Latour from 1961. When it was released, its buyer paid $3 for it. Right now, it sells at an auction for $500. Now the wine business can be incredibly tricky at times. For a certain type to become valuable it has to mature; the maximum period of maturation is 25 years. The wine we just presented is a lot older; it can’t be drunk and yet it is one of the most valuable in the world. In this case, we’re no longer talking about the quality of the wine, but about scarcity. In this case, a 1961 bottle of Chateaux Latour is a collectible.
“En primeur” wine – a risky but profitable type of investment
Wine “en primeur” is wine purchased by investors before the start of the bottling process. Simply put, you buy wine in advance at a cheaper price and you hope for it to be of excellent value. Much like fine art, wine has an inherent value – it can be drunk and enjoyed in case investors can’t make any serious money with it. At the beginning of the spring season, after vintage wines, the famous Bordeaux region of France produces young samples from the harvest of a previous year. The product is tasted and analyzed by international wine trade members, and afterwards released for sale. En primeur Bordeaux wine is exclusively traded through wine brokers, also known as “negociators”.
Investing in wine doesn’t have to be risky, as long as you make sensible decisions. If you’re new to the business, consult a wine merchant to help you out. Purchase wines with a proven background and track record, and stay away from people who sell “top quality” products directly. Wines that are profitable are only traded through reputable auctions.