How to Identify Good Investment Wine
Hello everyone, we are back with another series about wine investment! The last segment covered why wine can appreciate in value… If you haven’t read this I recommend you read it here: Why does wine appreciate in value?
Now let's learn how to identify an investment wine.
Investment Wine Overview:
Not all wines are suitable for investment and there are many wines that actually do not gain in value even if you store them for a long period of time. It is important to know how to identify the wines that do appreciate.
The investment properties of wine are generally broken down by:
Type of wine: The first property to consider is the type of wine. Most investment wine is Red, rather than white or Rose. All three wines can be made with very high, or very low-quality grapes. But certain traits in the winemaking process will be savored or lost depending on the wine’s treatment, and this will dramatically affect its age-ability. These traits include Acidity, Tannin, Alcohol Level, Residual sugar, Complexity, Intensity of flavor, and Balance. You need a careful balance of these attributes in order to age a wine successfully. And without age, the wine will not gain the level of nuance and complexity people expect from a fine wine. So for example, a Rose or White wine is very likely to have very little tannin unless it has been aged in barrels for a while, and allowed to sit on the lees such as a Burgundy Chardonnay. A low acidity grape such as Merlot is unlikely to age well on its own which is why it is often blended with other grapes such as Cabernet Franc. And wine with very little complexity or intensity of flavor will be hobbled from the outset. If it has nothing to start with, it has nothing to grow into. This is why typically fresh, simple white and rose wines are often unsuitable. There are some exceptions here but overall, the majority of investment wine is Red so that is a good rule to follow.
Region: When thinking about the region you can loosely compare it to investing in stocks of a blue-chip company vs investing in a growth company. Regions like Bordeaux and Burgundy have high liquidity and a huge market so it is safe to say they will create great returns. Not to mention they are regions that have consistently shown themselves to have the perfect climate and geography to grow excellent grapes with some or all the characteristics mentioned above. You can think of this as a company’s unique selling point. Investing in Italian, Spanish, American, or Australian wines is more like a start-up. Some of these regions can grow exceptional grapes and are proving so as time goes on. But they haven’t got centuries of prestige and are essentially playing catch-up. You have the potential upside of huge gains, but it is hard to predict which producers will rise to the top in the long run. There are exceptions to this rule like Screaming Eagle for the Napa Valley in California, and others, but this is the rule and has been for quite some time.
Quality: Not every wine from Bordeaux and Burgundy is a great investment. The quality of the wine and the prestige of the Producer really affect the investment returns. Taking into consideration wine critic scores such as Robert Parker, often helps investors understand the quality of the vintage and its potential growth.
Provenance: A last, often overlooked piece to the puzzle, is where the wine came from and if it traveled a lot. If a wine is not stored and transported correctly it can ruin the taste and lose its value. Additionally, there is a chance that the wine could be fake, and because of that, knowing the owner and where it was stored before is very important. Not having possession of these facts can create question marks over the value of your wine and cause it to lose its value. Simply because there is less proof that it is real or that it has been stored correctly.
What we do at WiV
WiV technology provides our WIVA community with transparency into all aspects that affect the price of the wine NFTs that they own. Through our investment drops, wine curation service, and many other products coming out soon, we take everything into consideration and offer the best wines, at different price points, to make sure everyone can access these incredible investment assets.
Additionally, our NFT technology and secure storage facilities offer top-notch provenance and free storage to all who hold our wine NFTs. Proper storage is essential for wine investing because, without it, the wine loses a significant amount of its value. We will go deeper into the importance of storage in a future article… but for now, remember its importance.
The earlier you start thinking of wine as liquid gold instead of a liquid to drink, the more money you can make!
Join the WIVA community on our DISCORD to learn more about our amazing offerings!
