The Knight Frank Wealth Report 2023 - Wine Owners comment
by Juliette Martin
by Luke MacWilliam
Download the full report here
2022 was a year of “permacrisis” according to Knight Frank's annual “Wealth Report”, with Ultra High Net Worth Individuals' overall wealth decreasing by 10%. Energy, Economics and Geopolitical shockwaves all had an impact on wealth.
Fine Wine grew 10% as a whole in 2022, a slight dip compared to the 16% seen in 2021 but double-digit growth in such a turbulent year can’t be sniffed at.
The Wine Owners/Knight Frank Fine Wine Icons Index shows the tale of the tape. This index follows 150 blue chip collectables including First Growth Bordeaux, Cult Californians, Burgundy, Champagne, Super Tuscans and more. It shows a year of two halves. Steady growth in Q’s 1 & 2 followed by a slow down/flat line in Q’s 3 & 4.
We attribute this pattern to a combination of factors, including the “permacrisis” factors stated in Knight Frank's report. One key observation is the behaviour at the top of the Burgundy market which has entered into a slight decline of -2% so far in 2023.Has the market topped out or is it pausing whilst global economics work themselves out? We’ve seen a rise in the number of Burgundy offers, and those pricing ambitiously are not seeing much interest.
What is encouraging is that throughout the global economic turmoil, interest in the fine wine market remains strong, and once again fine wine has proven to be a steady ship in a very unpredictable world.
As part of Knight Frank's report they conduct an attitudes survey, compiling responses from over 500 private bankers, wealth advisors and family offices who combined represent over $2.5 Trillion worth of assets. In the passion investments segment, Wine has again performed strongly as an area for future investment. 39% of respondents indicated that their clients are likely to purchase Wine as a passion investment in 2023, placing it behind only Art and Watches and ahead of Classic Cars and Jewellery in the passion sector.
2022 was a remarkable year on so many fronts; war in Ukraine, multiple PM’s, energy crisis, interest rates, countries trying to recover from the after-effects of pandemic - who can be sure what curveballs 2023 will throw us, but wine has a proven track record of sailing serenely thought turbulent waters and 2022 was no exception.