Adding Wine To Your Investment Portfolio
Wine has been a symbol of luxury and sophistication since ancient times. Its association with lavish lifestyles has made it a much sought-after commodity among high net individuals. In recent years, wine has also become a viable investment option, with some wine portfolios garnering higher returns than other traditionally stable investments.
If you’re a wealthy wine lover, investing in vino is a no-brainer. You already have a leg up in terms of understanding the product and the market. Investing in wine can also increase your social capital and open up more business opportunities in the future. There are in fact many benefits to wine investment and in this article we take a brief look at some of them and cover the factors you need to consider.
Wine as an Asset Class
Wine is classified as an alternative asset class, which means it is not correlated with traditional assets such as stocks and bonds. The wine market operates independently of financial markets, although it can still be influenced by the state of the economy.
This lack of correlation makes wine a good addition to diversify your portfolio and lower your risk. It provides a hedge against market volatility which can be useful when there is an economic downturn.
Unlike other alternative assets like art, classic cars, or jewellery, the value of wine directly increases as it ages. This is due to how complex flavours develop in a wine bottle over time. The supply of any one vintage of wine is also limited, positively influencing its value and making a particular wine investment more valuable.
Factors Affecting Wine Prices
The value of wine is determined by several factors, including vintage, producers, region, and rarity. Vintage refers to the year in which the grapes were harvested, and has a significant impact on the quality and value of the wine. Different years have varied climatic conditions which can change the quality of a particular vintage.
Producers, regions, and rarity are also critical factors that influence wine prices. For example, wines from popular wine regions such as Burgundy, Bordeaux, and Tuscany are known for their high quality and exclusivity, which makes them more valuable. Similarly, wines from renowned producers such as Château Lafite Rothschild are highly sought-after and command exorbitant prices.
Learn More: Sourcing The Finest Investment-Grade Wine
Investing in Wine
Investing in wine requires a significant amount of knowledge and research, and thus may present a high barrier to entry for the average investor. Beyond the quality and perceived value of the product, you also need to consider factors such as the storage of wine.
Proper storage is crucial to maintaining the quality and value of the wine. Wine needs to be stored in a temperature-controlled environment, away from light and vibration, to prevent oxidation and spoilage. For rare investment-grade wines, it may be preferable to tap on the resources of professional cellaring services rather than rely on home cellars.
If you are wondering how to begin investing in wine, it can actually be done through various channels, such as buying individual bottles, purchasing wine funds, or investing in wine futures.
Individual bottles are the preferred and most common method of wine investing as it allows you to build a collection that you believe will increase in value over time. Wind funds on the other hand is a more passive form of investment where your capital is handed over to a fund that manages a portfolio of wine.
Investing in wine futures is more speculative and can be useful for more advanced investors. It involves purchasing wine that has not yet been bottled, with the hope that its value will increase once it is released.
From an investment perspective, it makes sense to diversify by opting for wine as an alternate asset. For wine enthusiasts, it’s another way to indulge in your passion while also potentially earning a tidy sum through buying and selling at the right times. However, it’s important to note that wine investing is not without risk. It is possible for investors to lose large amounts of money if they fail to do their due diligence, conduct the necessary research and ensure they have the proper resources for preserving their wine bottles.
The Singapore Wine Vault prides itself on being a secure state-of-the-art facility dedicated to safeguarding your liquid assets. Contact us today to learn more about our wine storage services and send us your queries.
Wine is a living breathing thing during its time in the bottle. The flavours of wine mature and deepen slowly, which is why wine can be aged over long periods to increase its value. But this propensity for change also means it is particularly vulnerable to influence from environmental factors. Storing wine in the right conditions then assumes a greater importance, as wine kept incorrectly will lose its complex flavours and aromas, develop an unpleasant taste, and in some cases even become undrinkable.
Storing wine bottles in an equatorial climate like Singapore presents its own challenges. Light, heat, and humidity are all natural enemies of wine and keeping your treasured bottles safe from the elements can be a perpetual struggle. Here are a couple of suggestions to assist you in properly storing your wine in Singapore.
1. Keep It Out Of Sunlight
Grapes need sunlight to flourish, and indeed the great vineyards are located where sunshine is abundant. Once turned into wine however, even brief exposure to sunlight can cause damage and wreck the delicate flavours of the beverage. This is largely due to UV radiation which interacts with the many chemical compounds in wine, leading to a musty taste and aroma. Coloured glass wine bottles offer some level of protection, but it is up to individual owners to keep their wines in the dark for optimal preservation.
2. Stay Away From Heat
Wine needs to be stored at around 11-14 degrees celsius. At higher temperatures, wine can age too rapidly and spoil. With average daily temperatures that hover between 24-31 degrees celsius, wine bottles kept outside in Singapore will retain their unique and prized flavours for long.
Cool dark environments are ideal for storing wine, which is why rare or precious wines are often kept in cellars. If you’re storing wine at home, keep it away from light and heat by stowing your bottle in a cupboard. If you frequently buy expensive bottles of wine that you plan to age or drink only on special occasions, then it would be best to invest in a wine cooler.
Wine coolers are able to maintain very low temperatures to ensure your bottles are in optimal conditions. Many coolers also allow you to manually set the temperature which proves beneficial as white wines usually do better in lower temperatures, while reds can be reliably stored at the higher end of the recommended range.
Learn More: 4 Misconceptions About Wine Storage
3. Go For Professional Storage
As a serious wine collector or investor, home storage solutions may not be adequate for your needs. There is always the risk of power outages or equipment failure, which can rapidly destroy high-end wines. With the prices of rare wines reaching into the several thousands, it’s better to leave your precious investment in the hands of experts dedicated to storing your wine in state-of-the-art facilities.
This is where professional wine storage companies shine. With temperature and humidity controlled wine cellars in Singapore, they provide the perfect conditions for wine to age and thrive inside the bottle. These facilities also do not allow natural light to enter, so spoilage from UV radiation is not a concern. They also have extensive security features and emergency backup systems so you can rest assured that your bottles of wine are safe, secure, and ready for you to enjoy anytime you want.
When choosing a professional storage company, always do your research to ensure that they have the capabilities to store your wine properly and have a long history of doing so reliably.
At Singapore Wine Vault, we have the largest urban wine space in the region which spans over 75,000 feet. With over a decade of experience in wine handling, we are constantly innovating to elevate wine storage into wine lifestyles. Contact us today to get in touch with our team and find out more about our cellarage services.
Hong Kong – Wine Hub of Asia Pacific
ProWein is the No. 1 wines and spirits trade fair and largest industry meeting place in the world, and continues to engage and connect a global network of trade professionals looking for new opportunities in Asia’s fast-growing markets. ProWein World offers a global platform for market expansion through a family of international wines and spirits trade shows. ProWine Asia 2017 in Hong Kong will host a wealth of wines and spirits producers from across the globe alongside importers from the booming markets of Southern China, Macao, Taiwan, South Korea and Japan. ProWine Asia, the newest addition to the ProWein World Platform, sets its sights on Hong Kong on 8 – 11, May 2017.
Enter the Booming Markets of Southeast Asia
While Asia’s wines and spirits market is young, the potential for business is enormous. China’s consumption power is now coupled with a young generation of savvy connoisseurs, extremely eager to learn, taste and experience the sophistications wrapped around the world of wines.
The international wine industry has shown profound excitement for Hong Kong being the newest destination for ProWine Asia. Participation was quickly confirmed by producers and suppliers from major wine regions of France, Italy, Spain, Germany, Portugal, Austria, Greece, Australia, Chile and Canada.
Programme Packed with an All-star Cast
ProWine Asia 2017 features renowned opinion leaders in addition to trade organizations and associations including Jancis Robinson’s seminars and hosted tastings, Asia Wine Industry summits by Debra Meiburg, trade seminars by Hong Kong Wine Chamber of Commerce, CRU and Whisky Magazines, with other events and announcements further being developed.
ProWine Asia’s collocation with HOFEX 2017 as its dedicated wines and spirits sector promises enormous opportunities for business connections between the wines, food, and hospitality industries. The exciting collaboration is set to generate business synergies between suppliers and importers while bringing high-quality, professional buyers to ProWine Asia 2017 in Hong Kong.
Visitor Pre-registration Now Open!
ProWine Asia 2017 Online Visitor Registration is now officially opened and can be accessed through the Visitor Services Section of the ProWine Asia Website. Visitors who register online will receive:
- 4-day show admission pass to ProWine Asia and HOFEX 2017
- Buyers’ Guide containing a full exhibition preview & programme highlights
- Complimentary Business Matching Services
Pre-register online before visiting ProWine Asia 2017
For more details or to register online, please visit www.prowineasia.com/hk