Making financial gains from laying down wine is not a new concept. Collectors and enthusiasts have been financing their consumption by the age-old method of buying two cases and selling one later at a higher price to pay for the enjoyment of the other. What is relatively new, however, is the emergence over the past decade of investors who buy wine for capital gain, and without intending to consume their asset.
Three main reasons lie behind this trend. First, wine consumers in general have become more knowledgeable, thereby aspiring to higher quality wines. Second, wealth creation across the world has led many consumers to seek out expensive wines as a symbol of status: new and important markets now include China, Latin America and Russia, and increasingly also Eastern Europe. Third, premium wine has become an investable class of commodity which has proven itself as a strong contributor to risk-adjusted returns in investment portfolios. There are therefore good reasons to invest in wine alongside other assets in a portfolio. Why invest in wine?