Fine wine beats cars & handbags as luxury investment
Fine wine topped the charts in the latest Knight Frank Luxury Investment Index, outperforming other collectibles like high-end watches, cars, jewellery and art.
Its ‘fine wine icons index’ rose in value by 13% in the 12 months to the end of June 2021. Watches were the nearest challenger, with this index up by 5%, followed by cars, up 4%.
While Knight Frank’s report didn’t name specific labels, it provides more evidence of growing interest in investment-grade wine, backing up data from elsewhere in the sector.
‘Wine is doing really well, not going crazy, but growing nicely,’ said Nick Martin, CEO of the Wine Owners exchange, which compiled the fine wine index for Knight Frank.
While the fine wine market has been growing, ‘there are no signs of over exuberance’, Martin added.
He said Wine Owners had noted buyer interest in celebrated, older vintages of Bordeaux, particularly 2000 and 1996, and that he sees no end to market momentum for the time being.
‘It helps that the market is becoming much broader with more of the next generation starting to build their own collections.’
Rare whiskies and Hermès handbags relinquished their spots at the top of the annual Knight Frank’s luxury index. In the 2021 edition, sub-indices for whiskies and handbags saw declines of 4% and 3% respectively.
Yet whiskies were the top performing category tracked by Knight Frank over the past 10 years, with the ‘rare whisky’ sub-index rising by 483%.
Fine wine has still increased by 119% in that time, placing it fourth in the 10-year investment ranking.
While there are never any guarantees of returns on investment, other analysts, as well as merchants, have also reported fine wine market growth in recent months.
The Liv-ex 100 index – which tracks global trade prices for 100 of the world’s most sought-after wines – had seen 16 months of consecutive gains up to the end of August.
Buyer interest has ranged from top-end Italian and Californian wines to vintage Champagne, but 2021 has also been notable for resurgent interest in top Bordeaux, led by the first growths.
Demand for blue-chip Burgundy, such as Domaine de la Romanée-Conti or Armand Rousseau, also appears to have dispelled previous speculation that prices may have peaked.
There has been ‘a significant uptick in prices’ for Burgundy’s superstar wines, according to Matthew O’Connell, head of investment at merchant Bordeaux Index, who spoke to Decanter’s Market Watch for the upcoming November 2021 issue.
As previously reported by Decanter.com, there is also evidence of more people drinking fine wine at home during past 18 months.
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