The super rich are betting on fine wine as a primary investment asset. According to the authoritative Knight Frank Luxury Investment Index, in fact, the “fine wine” sector has registered the highest growth among investments in luxury in 2021 with a +16%, which becomes even +137% if the last 10 years are taken into consideration, as pointed out by a recent study by Spear’s Magazine. Despite the pandemic, difficulties in the supply chain and tragic events concerning the conflict currently underway, the fine wine market is proving to be very solid: the Liv-ex 100 index, which measures the trend of the fine wine market, in 2021 recorded a boom with +23% and also in 2022 opened with a +1.8% for the month of January. An increase driven by the consumption of fine labels within Italian restaurant venues: Istat data describe a 22.3% growth in 2021 in food & wine sales within Italian restaurant channels and 35% of consumers foresee a growth in spending for the purchase of fine bottles at restaurants in 2022 (Nomisma – Wine Monitor research commissioned by Istituto Grandi Marchi). The sector of fine wines has great margins of potentiality also towards the new generations: according to the Luxury Market Report of the famous auction house Christie’s recently reported by the Financial Times, 24% of the sales concerning fine wines and spirits were bought by Millennials.
Luigi Sangermano, luxury entrepreneur and CEO of Laurent-Perrier Italia.
In Italy, on the other hand, according to a recent research promoted by Intesa Sanpaolo Private Banking entitled “Collectors and Value of Art in Italy”, fine wine results to be collected by only 1% of the respondents as opposed to 21% of lovers of paintings and pictures, followed by 17% for photographs and 16% for sculptures and works on paper, therefore highlighting a strong margin of growth in our country compared to worldwide estimates. There are many reasons behind this real and proper boom: first of all wine has a low correlation with the most traditional economic markets, a condition which makes this good more resistant to the current problems connected to the current conflict such as the increase of inflation. Moreover, the market has a necessarily limited offer of fine bottles: in fact, many of them are opened and consumed, the offer is reduced and, as a consequence, the price of the bottles left on the market goes up. “Investing in fine wine allows to have a much broader point of view compared to traditional investments in safe haven goods such as gold, watches and diamonds – analyzes Luigi Sangermano, luxury entrepreneur and CEO of Laurent-Perrier Italia, prestigious French maison of production and marketing of champagne – Investing in high-end labels that can be consumed by collectors makes the market much safer, therefore less volatile and with double digit return capacity in the long run: the terrible conflict in progress, paradoxically, will not create particular problems to this sector, on the contrary. In the next years there will be a speculative bubble which will make the quotations of the classic refuge goods to fall again – concludes Sangermano – burning capitals and drastically decreasing the number of operations on the market. Fine wine, on the contrary, will continue its growth path, maybe slowing down, but however without ever stopping the exchange and the growth of value“.
Wine flows on the blockchain
The index detected by Knight Frank Luxury Investment’s report highlighted how investments grew by 9% overall in 2021: in this special ranking, fine wine is tied with collectible watches (always +16%), followed by works of art (+13%), antique coins and fine whisky, which record a 9% increase. Attention however to the next developments in the “fine wine” segment: the first limited editions of bottles are appearing on the market where the NFT (Non-Fungible Token) represents the wine label and it is created by digital artists. Besides guaranteeing the authenticity of the bottle, it will be possible to easily resell the purchased object by exchanging the NFT, because the blockchain tracking system records every transaction and automatically updates the digital certificate of ownership of the bottle. It is still an embryonic market, but already several wineries are starting to move with innovative ad hoc initiatives.
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