A couple of weeks ago, during a wine tasting here in London I came across a really exciting person. His name is Daniel and his company Oenofuture, deals with investing in wine. I always had a tremendous passion for wine as a beverage to be enjoyed as the ultimate indulgence but did not know much about its relevance as an investment so I thought I would ask him a couple of questions.
Daniel, wine investment is part of the alternative investment options available on the market. Could you explain why an investor should consider wine as a possible asset?
Well first of all wine is a tangible asset which means that when we invest in it we are actually purchasing a valuable goods a bit like arts and even properties. Also wine performances are dictated by supply and demand which means that for the limited production of the best fine wine the more bottles are consumed the higher the price grows. Apart of this more obvious reason one of the reason is safety. Especially this year we have seen great volatility in the traditional investment (stock, gold, oil) and a great way to defend from it is wine investment. You see, wine performances are not correlated to any other index therefore are pretty immune to anything. Last but not least, wine is very often tax free so you do not have to pay the capital gain tax on your collection.
You talked about performances of a wine. What is the average return that a wine delivers over 1 year?
On average a wine grows around 8 to 10% in value each year. That is an average though, so in some cases we have seen spikes in the market that offer a great moment for liquidation with a far greater return.
In the past only French wines from Bordeaux would have been considered worthy to invest in. Is that scenario different now and how?
The wine industry in the last 10-15 years has changed a lot. Before only Bordeaux was worth investing because it was the only wine exchanged from collectors and merchants. Nowadays the number of wine regions in the wine investment is growing. Among all Italy as a country is performing extremely well with great investment coming from Barolo and Barbaresco in Piedmont and Supertuscan, Brunello di Montalcino and top Chianti from Tuscany.
Is investing in wine for a connoisseurs élite or is it for every kind of investor? And how do you think your company, OenoFuture, can help in the choice by comparison with wine merchants?
Wine investment is not for connoisseurs at all, lately is become more and more approachable to even family man or sophisticated investors looking to spread their investment. Of course we recommend to do your due diligence and educate yourself if possible otherwise talk to a professional. In our case for instance we offer a fully managed service so we take off the pressure from the investors and we help them manage in a very profitable way their portfolio. Sometimes is a good idea to talk to a wine merchant but in that case you need to know what you are buying and when is the best time to sell. That can be a difficult job. In our case we do it for you identifying the right time. As a modern wine investment company we focus on profitable wines which means not only Bordeaux but recently a lot of Italian wines thanks to the great performances.
I got hooked. So how long should I expect to invest for, to start to see some relevant profits?
In general wine investment require some time, let’s say the best timing is between 3 to 5 years. Although that, we are able to structure investment that generate a return in a year or less.
Let’s imagine that a special occasion is coming and I want to drink some bottles of my investment. Where is that stored and how can I access them?
Well first of all the wine is stored in a bonded warehouse far from your home, so if you have a bad day in the office you cannot drink your investment. Access and get delivery is rather a straight forward process just get in touch with the bonded warehouse and organize the delivery. It normally takes 24 hours for UK a bit more for other destination but can be shipped all over the world.
Is it easy to liquidate an investment in wine? Will I have to take care my self to find a buyer?
Liquidate is very easy. We are talking about some of the most prestigious wine sought after by collectors and merchants and the availability is very low. In our case we do it for you so you can sit back and relax.