Holiday Shopping Wish List: 5 Wines You Need To Own In 2018
We give you expert picks on the best investible wines to add to your collection for the new year.
Published on 6 December 2017
Fine wine as an investible asset has had an incredible run in 2017. Being the top performer on the Knight Frank Luxury Investment Index, there aren’t many places better to invest your money. As 2018 approaches, we look at which are the top wines you need to own next year. All of these wines will make excellent additions to your collection as well as your investment portfolio. To help us make our selection, we speak to Joe Alim, General Manager of Cult Wines in Hong Kong.
Cult Wines says: “The five Bordeaux First Growths all produce a second label with the fruit that isn’t quite at the required level of quality for their main estate wine, the Grand Vin. All of these wines are of very high quality in their own right, and over the past 15 years, the price performance from this area of the market has been exceptional, with Liv-ex’s second wine index remarkably appreciating by 603% since December 2003. The second labels all trade at a considerable discount to their respective Grand Vin, and are therefore are far more accessible to consumers and collectors. The global cache of the First Growth estates provides existing and new market participants with sufficient confidence to follow other wines under their stewardship. Out of the five wines – Petit Mouton, Carruades de Lafite, Pavillon Rouge (ch. Margaux) and Forts de Latour – all trade at an average price of at least US$2,029 (£1,500) per 12 bottle case, and have been the wines driving the strong performance. Clarence Haut Brion (formerly Bahans Haut Brion) currently trades at an average price of below US$1,353 (£1000) per case, with there being very little difference between this wine and the other four in terms of quality. The popularity of the Haut Brion brand within new markets is the key reason for this difference and pricing, and this has certainly been increasing over the past 1-2 years. We predict that this gap in price will close over the next 1-3 years, as more and more collectors seek out a value alternative.
We recommend that our clients buy into a number of vintages for this wine, however, the more recent vintages of 2015, 2014 and 2012 appear to represent the most significant upside.
Cult Wines says: “Liv-ex’s Burgundy 150 index has boasted some of the most significant gains of any sub-section of the market since January 2004, growing by 323%. Wines from this region typically command the highest prices of wines produced anywhere globally, with an acute supply/demand imbalance being driven by consistent global demand and highly restricted production. Understanding the myriad of producers in the region can be a daunting task for any collector, and it can, therefore, take considerable time for a producer in Burgundy to really establish itself on the global market. As the number of entrants to this area of the market grows over the coming years, the desire for collectors to uncover new producers, producing very high-quality wines will increase.
“We feel we have identified a number of up and coming producers in the region that are producing seriously undervalued wines when compared to others of similar quality. Domaine Tortochot is one of these producers, and with considerable holdings in four of Burgundy’s leading Grand Cru vineyards, collectors and consumers can currently access these wines at an average 12x75cl case price of below US$2,029 (£1,500). Compared to the prices that these wines trade at for other producers, this is an exceptional value, and we do not expect the wines to remain at these discerning price levels for much longer. In fact, the increasing levels of demand are already having a profound impact on the price levels and the average growth across all four of their Grand Cru wines produced since 2008 has been 79.75% over the past 3 years.
“Our advice would be for investors and collectors to focus their buying on the Grand Cru wines produced by Tortochot since 2011. Given the upcoming shortage of newly released wines in Burgundy, these years will likely the be the main focus for buyers that are unable to get their hands on the latest releases.”
Cult Wines says: “A single wine vineyard that was launched by Robert Mondavi and his son Tim in 2005. A Bordeaux inspired wine that is Cabernet Sauvignon led, the vision for Continuum is for it be considered one of the finest wines produced in Napa. No expense is spared ensuring their wines are the best they can be, and the estate is at the forefront of innovation with regards to wine making techniques; perhaps the most advanced winery in the world. The estate released its first commercial vintage that was entirely grown at their vineyard in 2012, and the critical acclaim has been exceptional for every year since; in fact, it is difficult to think of a young winery that has received more universal praise in such a short space of time.
“At this stage, it could be considered a little speculative buying into Continuum, as the key to this wine performing from an investment perspective is the development of their brand on the global market and the resulting increase in demand for their wines. That said, having analysed the estate extensively, had Tim and some of the team visit our office in London, we are very excited about the future trajectory for this estate.
“Napa has had some exceptional vintages over the past 5 years, and 2013 and 2014 are considered to be the finest back to back years the region has ever had. These two vintages for Continuum could quite conceivably be the flag bearers for the estate for years to come.”
Cult Wines says: “Charles Van Canneyt is the winemaker at his family’s estate; Domaine Hudelot-Noellat. Under his stewardship, the wines have become some of the most revered and sought after from the region, and prices have risen significantly as a result. The average case prices for their Richebourg and Romanee St Vivant wines released over the past seven years currently stands at over US$6,766 (£5,000) per 12x75cl, and the average performance across both is close to +40%. In 2012, Charles started his own micro-negociant label under his own name and began making a range of wines using grapes that he purchases from a host of different growers and vineyards. The average price of the Grand Crus that Charles produces under his new label (he produces 10 in total) trade at an average price of just over US$2,706 (£2,000), offering an extremely attractive discount to the wine produced at the main family estate. With the wines produced at Hudelot-Noellat continuing to garner a huge amount of attention from the global market, we expect these prices to continue to rise, which certainly sharpens the focus on the value offered by his negociant wines.
“As with the Tortochot stable discussed above, we have been advising our clients to buy Grand Cru and 1er cru from each vintage that Charles has released so far. With the next two vintages of Burgundy decimated by bad weather conditions, the stock currently available on the market is sure to be taken off the market at an increasing rate over the next 24 months.”
Cult Wines says: “Over the past 5 years, we have enjoyed great success with our investors by identifying Bordeaux estates at the lower capital end of the market, that produces wines of very high quality, however perhaps flying a little under the radar. Over time, these estates have seen their reputations increase in key markets, and as a result, the market has responded to the value offered by their wines, increasing prices.
“Chateau d’Issan is one of the oldest estates in Bordeaux, situated in the Margaux appellation, the quality of their wines has been steadily increasing since 2013 when French tycoon Jacky Lorenzetti purchased 50% of the property. With their wines consistently featuring in the top 5 rated wines in the Margaux appellation, the average case price of US$744 (£550) per 12 is very much below where we believe it should be trading. Our advice has been for our clients to be buying the latest two vintages (2015 & 2016), of which during both the estate excelled, arguably making their two finest ever wines. With the 2,000 vintage currently trading at US$1,353 (£1000) per 12, this provides a useful benchmark for the appetite for the greatest years from the estate.”
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