Wine Market Investment Report December 2019 - Part 2: Looking ahead

by Wine Owners

Posted on 2020-01-16


This article is a follow up to our 2019 year end round-up by Miles Davis, published on the 10th January 2020.

The outlook for 2020

The geopolitical climate will continue to dominate the fine wine market in 2020. Uncertainty continues to hamper confidence amongst wine traders and although our view that the robust long-term fundamentals of wine will play out, there are some short-term issues (more on these below) that need to settle. If these issues, some of which are very specific to the wine market, can settle, we will look back on 2020 as the year of opportunity. Physical assets are doing well, gold is at a seven-year high, and we live in a climate of negative real interest rates. Stock markets are trading at all time highs and there is liquidity in the system, it’s just not finding its way into wine right now. Wine has been underperforming these other assets recently (one-year performances), see here:


WO 150 Index Wine Owners Investment Report

The fine wine market continues to develop and change, and is becoming more interesting, with different fundamentals developing for individual markets, making them more autonomous all the time.

A whole new and significant factor is the U.S. and its trade tariffs, not only treating wines from different countries differently, but Champagne differently to still French wines, and wines above or below 14.1% alcohol from the countries on their hit list. Tariffs will influence the underlying markets, so until we have further clarification it is difficult to predict what may happen next.

As a result, I expect the wider market to start the year a little unsure of itself. There are and will always be opportunities within the wine market, however, but perhaps portfolio allocation has never been more important, producer too. And maybe more important than both of those considerations, are prices and relative value. Buying on the bid side of the market will be the key and good buying will be richly rewarded.

A reminder of performance over a five-year period:

WO 150 Index Wine Owners Investment Report

I continue to favour Italy, particularly Piedmont and some of the super Tuscans and vintage Champagne. 2016 was an amazing vintage for Piedmont and new releases of Barolo should be considered. Of the major markets, I am generally lukewarm on Burgundy, but keener on Bordeaux where some fantastic older vintages, particularly ’89, ’90 and ‘96, are more available on the market than for some time. I think there will be some amazing opportunities this year in this area. I maintain my view that younger Bordeaux is fully priced, especially block buster vintages of ‘05, ‘09 and ’10 where supply is still plentiful and prices are high. I would be highly selective and very price sensitive in California and other ‘lesser’ investment markets, and always on the look out for lower levels of alcohol.

If I had to name one brand to buy this year it would be Sassicaia.

The issues in 2020

Brexit

The election result in the UK cleared the UK air after a period of uncertainty and it appears that producers and importers are relaxed, for now, about any Brexit impact.

Tariffs

The possibility of further U.S. tariffs has taken the place of the Brexit uncertainty but the situation there will become much clearer in mid-February, but I cannot believe anyone is going to be brave before then. If the tariffs remain as they are, I think the market will react in a positive way, negatively if they are any more punitive. The fact that the tariffs are only levied on wines under 14.1% alcohol, and thus wines stronger than that are exempt, is largely ignored by the market as an overriding sentiment takes over and the damage is done. Only wines from England, France, Germany and Spain are currently subject to these measures, making the rest of the world, particularly Italy in my view, look more interesting in the short term. France has particularly annoyed the U.S. with its digital tax aimed at the big tech companies and Champagne, given exemption last time round, may be in the firing line. But who knows what is going to happen next on this issue – the uncertainty is somewhat paralysing.

Hong Kong

The situation in Hong Kong is also creating uncertainty. The people are scared about the future and feel strongly enough to risk life and limb in protest, and China is not happy. The protests have calmed down from their most violent but there were heavily populated demonstrations at the turn of the year. Last week Beijing replaced their H.K. liaison officer with a senior and trusted aid of President Xi, hardliner Luo Huining, who ominously says that “everyone eagerly hopes Hong Kong can return to the right path." He comes with a reputation for fixing tough problems for Beijing!

The situation is complex, and it is likely the impasse will run and run. China can afford to be patient; it is sitting with the stronger hand and can probably slowly strangle the territory into submission without using undue force. Hong Kong has a long history of migration (especially post Tiananmen Square) and the numbers from now on will make interesting reading. Mainlanders are currently arriving at the rate of 50 a day but how many are leaving? Ultimately, I expect a huge number of democracy loving, wealthy locals will be leaving before 2047 but that this is the dawning of a new era for Hong Kong.

As well as being a lively wine hub itself, Hong Kong has been and is the gateway to China for fine wine and houses a lot of the experience and expertise in the region. More than ever, personnel and the location of businesses are transferable, and Hong Kong may lose market share in the longer term. This does not affect the long-term demand for wine, just where and how it is traded. If China was to open Shenzhen as a free port, for example, the impact would be immediate, and Hong Kong would be shunted sideways.

Other themes and points of interest

Bordeaux

The overall share of trade in the wines of Bordeaux has continued to decrease and the 2018 en primeur campaign was another damp squib. 2019 is another good, possibly great, vintage but the Bordelais need to respond accordingly if they want to stop the rot (how many times have we heard that!??). Young Bordeaux wine is still in a state of over supply with warehouses packed; a new lease of life is urgently required and if the Bordelais, by lowering prices, can take advantage of the huge media machine of en primeur to capitalise, they have a chance to turn the worm. I believe they have severely undervalued the power of the en primeur message over the years – we live in hope!

Climate change

Apart from the devastating fires we have seen in the U.S. in recent years, and Australia very recently, what does climate change mean for fine wine? Although winemakers are learning new techniques to deal with warmer weather the obvious and irrefutable consequence will be higher alcohol levels. Bordeaux 2018 demonstrated this in spades, with most wines well above 14%, and some around 15%. Although a lot of these wines can be well balanced, where the riper, more generous fruit copes with the higher alcohol levels, it does not take away from the fact there is a higher level of alcohol, and that’s not good. Most people, but especially connoisseurs, would prefer their wine to be around 13%. Other than the obvious benefits of scarcity, this is another good reason to favour older wines, they tend to be less alcoholic. I remember 2010 recording higher alcohol levels than we were accustomed to and causing quite a stir at the time - they seem perfectly natural now.

General (more for drinking)

South Africa has been receiving some very good press in recent times and quality is improving. It maybe not yet offering wines for investment, but it is certainly worth dipping a toe. I recently bought Meerlust’s Rubicon 2015 following some massive reviews, for not much money, for example.

Piedmont has had a string of good vintages, and there’s a lot of great quality Langhe Nebbiolo and Barbaresci on the market. Produttori del Barbaresco 2016s are both excellent and good value. Prices for these types of wines are the equivalent of generic Bourgogne.

Climate change is good for Beaujolais. The Gamay grape is a tough little number that needs plenty of sun and warmth. There has been plenty of investment in the region and quality and the number of wines providing pleasure is on the up. Do not overlook the versatile Chardonnay from the area either, a leaner style in general compared to the Maconnais and further north.

2018 Burgundy will provide plenty of easy pleasure but don’t believe all the hype from the merchants. Check alcohol levels, there are some that are too warm but in the main they, especially the reds, are generous.

Try and understand the critics and their scoring. At the Judgement of Paris in 1976, the range of scores, out of twenty, came in between two and seventeen. Some of today’s critics don’t really start at anything below ninety three (out of one hundred) and famous producers in half decent vintages are all north of ninety five. Big scores sell wines and are commercially attractive for nearly all involved – they just don’t necessarily reflect the truth! It has all gone way too far and this observer, for one, has had enough of it.

Wishing you well for 2020!

As ever, if you have any questions or would like to discuss anything wine related, do let me know.


Wine Market Investment Report September 2019

by Wine Owners

Posted on 2019-10-08


Is it time to hit the bottle?

At the risk of sounding like a stuck record, the market mood is sombre. It does, however, remain reasonably steady amidst a turbulent sea of macro factors.

Hong Kong is an important market for wine and the ongoing protests are a concern. The original cause of complaint, an extradition agreement between the territory and the Chinese mainland, has long since been retracted but the protests continue, becoming ever more violent. This is about democracy and freedom and the eyes of the world are watching. It is an uncomfortable position for China who cannot afford to handle the situation as perhaps it might in its own provinces but in the long term, remains a very powerful parent. Already the economic effects are being felt; officially occupancy rates in Hong Kong hotels are currently running at about 20%, unofficially they are in single digits. A quick internet search found a room in the territory for US$9 a night, including breakfast!

As we know, Hong Kong, apart from having its own burgeoning wine scene, is currently the gateway to the wine market of China, legally or otherwise. We expect China will open new free ports in time, but the current troubles may just accelerate that process. We think this is a short term problem but in the meantime, trade form that corner of the world is quiet.

U.S./China trade negotiations and Brexit shenanigans continue, and emerging markets are threatened by contagion emanating from Argentina. Thrown in the unrest in various parts of the Middle East and various other more localised scenarios, it’s a right old mess. And what does well in right old messes – physical assets! Here is the Gold price performance so far this year against the WO 150 index.

WO 150 - Gold price performance

We’re not saying there is any correlation, delayed or otherwise, between wine and gold but recent financial history (since the last global financial crisis) has made physical and alternative assets increasingly popular.

We live in an era of negative real interest rates, where buyers of roughly a third of the world’s outstanding bonds will lose money if held to maturity and where even high yielding equities with strong balance sheets are not performing – all very sobering! With all this going on, is it time to hit the bottle?

Within the wine world, my investment themes remain the same; focus on regional allocation, combined with scarcity and relative value is the game.

Please contact miles.davis@wineowners.com with any questions.


Focus on: Screaming Eagle 2009 - 2014

by Wine Owners

Posted on 2019-03-07


In terms of reputation Screaming Eagle is the ne plus ultra of American wines, the equivalent of Petrus on the Right Bank, Romanee-Conti on the Cote de Nuits and Conterno Monfortino in Piedmont.

The prices of the wine varies from £2240 per bottles up to £2600 per bottle for the vintages of 2009, 2011, 2012, 2013 and 2014, but over the last two years it has been the 2009 and 2011 that have made the greatest gains, with 37.9% and 42.7% respectively. Double digt growth seems to be the norm on a CAGR basis.

Screaming eagle index

The 100 point vintages of 2010 and 2007 are roughly £3600 per bottle, and have gown at a slower rate in the last two years, suggesting again that there is better vakue to be had in the 97 to 99 point bracket currently.

Screaming eagle Market versus price

Current market levels puts the 97 point ’09 at £2602 a bottle and the 94 point ‘11 at £2461 per bottle. These prices are at a premium of £350 and £200 respectively to the 97 point 2013 and 98 point 2014, which would seem a little illogical. Hard to see a justification for a discount for equivalently scored wines. As the chart below shows, the 2011 in particular seems over-priced and the more recent vintages would seem to offer greater upside potential.

Screaming eagle Relative value score

Trying to compare Screaming Eagles with other US wines is a rather thankless task as it operates on a different pricing level entirely to every other wine in California. There are several things you can say about it in isolation, however:

  • There is no vintage values at less than £2000 a bottle, and many tip the scales at over £3500 per bottle
  • Three pack OWCs are the norm – almost all stock available comes in this format
  • It has the highest average Parker score over the last twenty years of any wine in the world except Conterno Monfortino
  • No more than 700 cases (12 pack equivalent) are made in any vintage.

It would seem logical to suggest for the medium to long term that younger, higher point scoring vintages offer the greatest potential for capital growth. Not for the faint hearted, of course, but the fundamentals of extremely small production, a style that will see each vintage improve for a minimum of 25 years form bottling and a brand that has cemented itself as the epitome of great modern Californian wine making make this a wine that needs to be considered very seriously as an unavoidable component in any top drawer cellar…


2005 La Mission Haut Brion – pure perfection and a relative value win

by Wine Owners

Posted on 2018-05-17


An overlooked example of value for money here from the 100 point La Mission 2005. Compared to Domaine Clarence Dillon stablemate Haut-Brion, and the rest of the 2005 First Growths, 2005 La Mission is a clear winner in terms of value as is eminently clear from relative value analysis. The only other 100 point wine on the whole left bank is Haut-Brion, which trades at around £6,500. The other Mouton will cost £5,250, Latour £6,600, and Margaux £6,100, all on 98 points, while Lafite lags behind them all in relative terms, commanding £7,700 for 96 points.



Compared to other 100 point La Missions over the year, the 2005 wins out on relative value as well. Whether any of the 2009, 2005 and 2000 will hit the price highs of the legendary 1989 is a subject on which the verdict is very much out, and will depend on how reputation of the vintages develops. Nevertheless, all three look like relatively sound buys, and the 2005 at the offer price just beats the rest (assuming they can be bought at market level).


“The 2005 La Mission Haut-Brion is pure perfection. It has an absolutely extraordinary nose of sweet blackberries, cassis and spring flowers with some underlying minerality, a full-bodied mouthfeel, gorgeously velvety tannins (which is unusual in this vintage) and a long, textured, multi-layered finish that must last 50+ seconds. This is a fabulous wine and a great effort from this hallowed terroir. Drink this modern-day legend over the next 30+ years. Only 5,500 cases were produced of this blend of 69% Merlot, 30% Cabernet Sauvignon and 1% Cabernet Franc.”

100 points, Robert Parker


La Mission Haut-Brion 2005 is offered £4,300 on the Wine Owners Exchange (£4,435 including fees)



Brexit: what it means for fine wine, and other market trends

by Wine Owners

Posted on 2016-07-21


The past few weeks have seen significant movements and activity within the fine wine market, with the closure of the En Primeur campaigns and the devaluation of sterling kicking the market 4-5% higher.

Whether this situation lasts following the surge remains to be seen, but combined with the upward movement of the market in the preceding few months, and 21 months of increasingly solid gains in the Bordeaux market, it makes for an interesting period.

We've put together our updated set of Fine Wine Predictions for the second half of 2016, including thoughts on the impact of Brexit, tips for collectors, and analysis of buying trends in the market.

We hope you enjoy reading the report, and would love to hear from you if you have any questions, are looking for specific guidance, or want to join the conversation.


GET YOUR FREE REPORT HERE





2015 Fine Wine Predictions: Bordeaux (2/2)

by Wine Owners

Posted on 2014-12-17


Anticipating buying opportunities

The subdued state of the Bordeaux market offers buying opportunities, such as First Growths from 1996 and right bank wines from 1998 – superb vintages that are coming into an early stage of their long maturity phase. Because of this demand ought to pick up. 1996 in particular looks fair value following declines of 40%, with the exception of Lafite which still commands a premium.

Volatility creates buying opportunities in any market, and wine is no different. When sentiment is negative, markets will tend to overshoot as they readjust. In wine, the very greatest vintages, comprising wines that are most susceptible to high prices at release, are often those that are sold off the hardest.

One such vintage that has been sold down over the last 3 years and yet which is one of the ‘greats’ is 2005. Whether the market has yet hit bottom is hard to judge. What is sure is that 2005 is the next great vintage following 1996 and 2000 that has a huge drinking window.

2005 may have been under-rated by key critics relative to 2009/2010. The likelihood of this vintage seeing improved ratings is greater than a downside, and any broad-based re-rating of them as they start to show their true class will spur price rises. Spring 2015 could well be the turning point for this vintage.

Back vintages of right bank Bordeaux have started to pick up, with the top of the market leading the way. This may have a positive effect on the peer group of right bank, merlot-dominated top wines. Typically production volumes are much lower than the big Medoc (left bank) estates, and scarcity exerts a greater influence on market pricing of older vintages.

This is an extract of our report 2015 FINE WINE PREDICTIONS

Click here to download the full report

2015 Fine Wine Predictions


2015 Fine Wine Predictions: Bordeaux (1/2)

by Wine Owners

Posted on 2014-12-15


Bordeaux re-evaluated

Bordeaux’s steady decline from its broad-based peak in the summer of 2011 has led investors to reappraise the role of red Bordeaux, and especially the First Growths within their portfolio.

Whereas before 2010/11 top red Bordeaux might have accounted for 90-95%+ of all wine investments, these days diversification is seen by many as much more important as a hedge against volatility.

Market watchers now see buying opportunities on the back of 4-5 year lows and expect the Bordeaux market to move up in the next year. This is a likely scenario in respect of Classed Growth Bordeaux from the best years and First Growths from the lesser years, barring near-term risks posed by economic and geo-political externalities.

Sentiment towards Bordeaux will improve as prices bottom out. From 2008 onwards many new participants entered a frothy market. Several have now exited (e.g. Wine Networks owned by a Korean Telco) and many of the cold-calling wine investment companies that profited from a fast-rising market have gone bust – all of which have caused price falls to accelerate as stock was dumped. This unwinding has been necessary and essential for the market to resume normal functioning.

Looking ahead, prices of back vintages will start to firm up as channel inventories need to be refilled and as consumer confidence slowly rebuilds. Calling the bottom of a market is notoriously problematic, but back vintages are looking more interesting, right now, than at any time in the last 5 years.

Futures market in the balance

The new Bordeaux release of the 2013 vintage was the damp squib that everyone predicted and confirmed that the en primeur (futures) market is moribund.

Looking forward, 2014 is promised as a good to excellent vintage that would normally see prices rise. This time around it will need to be different: a moment of truth for the en primeur system.

As long as top wines are favourably priced at a discount to 2013 releases, en primeur may spring back into life, and the rest of the secondary market will be given further impetus. To this end a strong dollar will help.

The question is whether Chateaux still value the role the consumer plays as stockholder or whether that role is being taken for granted. There are only two reasons to buy young wine before it is bottled: either because it will be difficult to find in the future or because it’s better value to buy early. For Medocs and Graves, scarcity isn’t an issue, so it has to be much cheaper than when it is available in bottle for consumers to buy en primeur.

This is an extract of our report 2015 FINE WINE PREDICTIONS

Click here to download the full report

 

2015 Fine Wine Predictions


Why?

by Wine Owners

Posted on 2014-10-20


Why is there apparently so little wine in Bordeaux when so little of more recent vintages has been selling through? Why buy young wines at release? Will negociants’ balance sheets cope with more vintages that stick? Why would that happen?

Pontet Canet 2013 famously ‘sold out’ within an hour or two of being offered on the Bordeaux Place. Negociants sucked it up and took their allocations. That’s their historical role after all. Merchants generally weren’t having any of it. More relevantly, nor were their private clients. It was a lousy deal for the consumer: 2002, 2004 and 2006 are all cheaper vintages.

Pontet Canet - Wine Owners


Pontet Canet

Now we’re on the cusp of a rather good vintage, the first in a small handful of years. Haut Brion 2008 has been trading at £2,400: a fair price for a lovely wine. To be a good buy, what will Haut Brion 2014 need to be offered to consumers for? £2,000? £1,900? £1,800? If instead it’s offered for £2,500, for example, what would be the point of buying it?

Haut-Brion

Loyalty? Surely not. Would consumers really want to play the stockholder for Chateaux that made extravagant profits out of 2005, 2006, 2009 and 2010 vintages? Some of who pillaged the European Union’s agricultural support fund during the bloody aftermath of Lehmann to construct a new chai or two? Buy into wines that might not drink for 15-20 years and might not be materially more expensive in 2 or 3 or more years’ time? Wines that are made in such benevolent quantities that finding them won't take more than a couple of minutes online? When there are so many back vintages that are coming back down to earth and are challenging our perceptions of value over the last few years?

So let’s imagine that the 2014 vintage proves a tricky sell. Not as thankless a job as the unloved 2013 vintage of course. The really big merchants who have an economic interest in en primeur to succeed and will sell the vintage: the weather, the brilliant Indian summer, the inevitable comparisons with the weather of 1996. Those cool nights, dewy mornings and balmy days under clear skies. But imagine it’s not what you might call a ‘successful’ campaign…

What happens then? How many of the negociants will be able to stomach another huge influx of stock without a corresponding outflux? With credit harder or impossible to come by; stalling European growth; a currency still fairly strong but with a significant downside, undermined by Europe’s recession-states, impatient creditors and a faltering Germany? With banks increasingly wary of lending support?

Of course some negociants will seize the moment to consolidate their position, increasing their market share as they gobble up distressed owners and their stocks. But others?

No one is yet disputing the efficiency of the negociant distribution system via the Bordeaux Place. After all, the huge Tuscan estates were sufficiently impressed by the system to want in. (And if you want your Libournais estate to be Classé, woe betide you if you try to circumnavigate the system.)

But it doesn't automatically follow that you have to believe in en primeur as long as it undervalues the consumer’s stockholding role to adhere to the established Bordeaux distribution model.

Passion-driven many of us may be, but perennially stupid we are not.


Index spotlight

by Wine Owners

Posted on 2014-08-14


Unsurprisingly, given the continuing market morosité over classed growth Bordeaux, the index plumbed fresh 2014 lows last week, down -3.83% since January, and -6.8% from this time a year ago. The right bank fared marginally better with the Libournais Index year to date (-2.68%) whilst year to date it was down -4.61%.

 

WO Medoc Classed Growth Index

 

WO Libournais Index

 

Year on year fallers (Libournais Index):

Chateau Cheval Blanc Saint-Emilion Premier Grand Cru Classe A AOC 2000 -16.15% £475.00
Chateau Beausejour Becot Saint Emilion Premier Grand Cru Classe B AOC 2000 -16.19% £41.31
Chateau Belair-Monange Saint Emilion Premier Grand Cru Classe B AOC 2010 -16.55% £81.66
Chateau La Fleur Petrus Pomerol AOC 2001 -16.78% £93.70
Chateau Latour a Pomerol Pomerol AOC 2005 -17.02% £48.71
Chateau Le Tertre Roteboeuf Saint Emilion Grand Cru AOC 2001 -17.63% £100.72
Chateau Beausejour Duffau-Lagarrosse Saint Emilion Premier Grand Cru Classe B AOC 2005 -17.90% £48.33
Chateau Cheval Blanc Saint-Emilion Premier Grand Cru Classe A AOC 2005 -18.70% £325.00
Chateau Figeac Saint Emilion Grand Cru AOC 2009 -18.99% £120.83
Chateau Clos L'Eglise Pomerol AOC 2001 -19.55% £71.46
Chateau Beausejour Becot Saint Emilion Premier Grand Cru Classe B AOC 1998 -19.82% £32.89
Chateau Latour a Pomerol Pomerol AOC 2001 -20.04% £32.36
Chateau Ausone Saint Emilion Premier Grand Cru Classe A AOC 2005 -21.21% £802.05
Chateau Moulin Saint-Georges Saint Emilion Grand Cru AOC 2000 -21.74% £34.45
Chateau Hosanna Pomerol AOC 2000 -21.79% £111.60
Chateau Clos L'Eglise Pomerol AOC 2009 -24.12% £98.24
Chateau Ausone Saint Emilion Premier Grand Cru Classe A AOC 2000 -25.02% £750.00
Chateau Larcis Ducasse Saint Emilion Premier Grand Cru Classe B AOC 2000 -26.15% £26.77
Le Dome Saint Emilion Grand Cru AOC 2000 -40.75% £76.41
 

The First Growth Index is down -10% year to date and -27.9% since summer 2011 highs. However, there are some surprisingly low prices on back vintages being seen on the fine wine exchange. How about Latour 2004 at £3,050 IB per 12x75cl excluding buyer’s commission? Or Margaux 1996 at £3,500 IB per 12x75cl - one of their great vintages, drinking beautifully now. Frankly, with pretty good to excellent back vintages fetching these kind of prices, no wonder there are no takers for the recent string of Bordeaux off-vintages. The risk to discount ratio is simply not compelling enough. No doubt the market will sort that out over the next couple of years. Contrarily, good to great vintages with 6-10+ years under their belts are starting to look very attractive in places, at least in our eyes, and there’s a trend towards restocking within the fine wine trade - a positive sign.

Looking at constituents of the Wine Owners 150 (which comprises 150 Investment Grade Wines across the top 40 performers of the last 10 years), the leaderboard is topped by Monfortino 2002, up 39% in the last 12 months. This is a romantic, if not heroic performance, from one of the greatest wines in the world defying the miserable conditions of the vintage with its superlative microclimate and the producer’s belief in the intrinsic quality of the wine.

 

Year on year top performers (Wine Owners 150):

Giacomo Conterno Monfortino Barolo Riserva DOCG 2002 39.06% £338.62
Screaming Eagle Winery Cabernet Sauvignon Napa Valley AVA 1995 28.99% £3,135.00
Domaine Jean-Francois Coche-Dury Corton-Charlemagne Grand Cru AOC 2005 28.50% £2,015.74
Tenuta dell' Ornellaia Masseto Toscana IGT 1998 20.66% £454.00
Petrus Pomerol AOC 2001 18.28% £1,400.00
Tenuta dell' Ornellaia Ornellaia Bolgheri DOC 2004 16.53% £133.33
Tenuta dell' Ornellaia Masseto Toscana IGT 1997 15.94% £516.67
Chateau Le Pin Pomerol AOC 2009 14.92% £2,291.67
Domaine de la Romanee-Conti Richebourg Grand Cru AOC 2002 12.08% £1,130.35
Dominus Estate Bordeaux Red Blend Napa Valley AVA 1997 10.66% £107.27
Domaine de la Romanee-Conti Romanee Conti Monopole Grand Cru AOC 2001 9.62% £7,353.97
Tenuta San Guido Sassicaia Bolgheri DOC 2006 9.36% £137.50
Joseph Phelps Winery Insignia 1997 9.19% £163.90

By the way, not one Medoc classed growth made it into the top 20 of the Wine Owners 150, with the best performing representative of the region being Pichon Baron 2000.


Chateau Pichon Baron Pauillac Deuxieme Cru Classe AOC 2000 2.47% £125.00


Buzz 500 Index

by Wine Owners

Posted on 2014-05-08


The Buzz 500 was always meant to be a bit of fun. Away from the serious business of formulating the fine wine equivalent of the FTSE100, and key region of production tracker indices, we thought it would be interesting to create a ‘popular’ index.

So we took the 100 most searched for wine names on Wine-Searcher, selected 5 vintages per wine that differed according to region, and turned that list into an index. Well, why not?

We wanted answers to the question: are those wines that are most searched for on Wine-Searcher also those that perform the best over the medium term? Will the most searched-for wines tend to be the most demanded? Does most researched translate into purchases, and does that lend support to, or underpin market pricing?

We kicked off the Buzz 500 at the start of 2013, and from that point onwards, it’s outperformed the WO150. That’s not entirely surprising given the strong Bordeaux representation in the latter index. But actually the Buzz 500 has plenty of claret represented too, just different wines. This highlights the first conclusion: there are always outperformers in any segment, and there is a correlation between the most searched for wines in a category and their performance versus other birds of a feather.

You can Review the constituents of each of the indexes here.

But just because hot wines within a category will outperform other wines in the same category, there’s no substitute for market momentum: and nowhere has that been greater than in burgundy these past three years.

So comparing the Buzz 500 to the Blue–chip Burgundy index is – well, rather predictable.

Whilst Burgundy has risen 40% in the last 3 years, the Buzz 500 has managed a paltry 5.5%. That’s still a third better than the poor WO150, weighed down by its First Growth constituents.

If you're a Burgundy officianado that may be good news, or conversely may have put whole classifications of wine out of your drinking reach. And whilst the scarcity of Burgundy is a huge market driver that may point to inexorable upwards momentum, who’s to say it will continue?

The wine market is characterised by myopia – unable or unwilling to see an end to positive trends, and morose in the extreme when sentiment turns . Neither are helpful for collectors.

One behaviour that is consistently predictable is that when wine markets become disconnected with the value in those purses that consume it, the trade and consumers search for better value, Hence the positive kick enjoyed by Northern Italy. More about that in my next index analysis.


WO Buzz 500 Index


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