Price nearly always plays a part in the decision-making process of purchasing wine. Typically, much emphasis is placed on the importance of “value” – “how much quality am I getting for the price of this bottle”, for which Wine Lister has its very own indicator, Value Picks. However is simply offering “good value” enough?
Wines purchased for long-term cellaring carry financial risk just as investment does. With this in mind, Wine Lister’s Economics scores reflect not only a wine’s price, but the performance of that figure over time. As well as a three-month average market price, and six-month / three-year price growth, Wine Lister’s algorithm takes into account price stability as a factor in determining a wine’s Economic strength.
Using historical prices provided by our data partner, Wine Owners, we calculate the standard deviation of a price over the last 12 months, expressed as a proportion of the average price over the same period.
Volatility can be caused by price movements both up and down. Nobody wants to see the price of a wine plummet after purchase, but equally, wines with prices rising too high and too fast display risk too, and are therefore also sanctioned with lower Economics scores.
Below is an extract from this year’s Bordeaux Market Study featuring the 15 most stable Bordeaux wines. All five left bank first growths appear, testament that higher-scoring wines tend to experience less volatility. This is also tied in with liquidity: frequently traded wines tend to benefit from multiple reference points allowing a consistent market price to be determined. Conversely, a wine traded less frequently often sells at a markedly different price from one transaction to the next, resulting in a much more volatile market price.
While Château Latour’s slow and steady price growth (as shown in the chart below) results in relatively low six-month price performance and three-year compound annual growth rate (CAGR) ratings, its strong Economics score is thanks to a high three-month average price, a high volume of bottles traded at auction, and a low price deviation of just 2.4% over the last 12 months.
The chart below shows a very different picture – this wine has experienced a 14.7% price increase in six months. Though this in itself is positive, its price has therefore deviated 12.5% in the last 12 months, and the yo-yoing nature of the price over the longer term earns it a much lower Economics score (492).
With daily en primeur release alerts and offers for the new 2017 vintage filling our inboxes, the “Bordeaux buzz” at this time of year is undeniable. However, Bordeaux’s popularity does not end with en primeur, as we prove with results of the last quarter’s trading volumes.
Wine Lister uses figures collated by the Wine Market Journal from sales at the world’s major auction houses to calculate incremental increases in four-quarter trading volumes – in this case, January-December 2017 versus April 2017-March 2018. Auction volumes contribute towards Wine Lister Economics scores, allowing us to measure the liquidity of each wine.
The five wines showing the biggest increases in trading volumes between these two periods all hail from Bordeaux. Indeed, such is the case for the top 20 auction volume increases, with the exception of brand royalty, Dom Perignon (in 10th place).
The wine experiencing the biggest increase in trading volumes is Mouton Rothschild, with 778 additional bottles traded. It has the highest Economics score of the five (956) and a compound annual growth rate (CAGR) of 11.3%. Kicking off the first growth releases of 2017 vintages this week, Mouton Rothschild’s 2017 UK release price sits 17% below last year’s at £360 per bottle.
In second place is right bank powerhouse, Cheval Blanc, whose trading volume increased by 685 bottles with the addition of the most recent quarter’s figures. Though second for incremental change, its total trading volume is at least 30% smaller than any of the left bank first growths.
Latour and Haut-Brion come in third and fourth place, both with 12% trading increases of 614 and 529 respectively.
Finally, trades of Pape Clément keep the Pessac-Léognan property’s red in the top five for trade increases for a consecutive quarter, with 506 more bottles traded in the current period. Despite dropping four places since last quarter’s auction volume results, Pape Clément still achieves the highest proportional change of all five wines at the top, with a 27% trading volume increase.
The eyes and ears of the industry are focused on Bordeaux 2017. Price is always a key factor in the commercial success of a fine wine, but never more so than during the annual en primeur period, when release pricing can make or break a wine’s en primeur campaign.
It is therefore timely to take a look at some Bordeaux Economics score successes, this week from Saint-Estèphe. Wine Lister’s Economics score combines five criteria – based on price and volume data – to measure a wine’s commercial success (read more on the Economics score calculation here).
Calon-Ségur has the highest Economics score of all Saint-Estèphe wines (943). Not only does it score 53 points higher than the next wine in its peer group, it is also the number one third growth for Economics score, sitting in eleventh place for Economics of all Bordeaux wines. This is particularly impressive, considering that the average price per bottle of those ranking in the top 10 is £614, nine times higher than Calon-Ségur’s comparatively modest average price tag of £69 (read more about Calon-Ségur’s pricing in the en primeur: part II blog).
The number two Economics score in Saint-Estèphe is held by Montrose (889). It has the highest average Quality score of the five (936) and an average wine life of 15 years. Its steady price growth over the last two years (30%) makes it one to watch for investment potential.
Cos d’Estournel is the most expensive Saint-Estèphe wine at £104 per bottle. Though it comes in third place for Economics, it has the best Saint-Estèphe Brand score of 996, thanks to presence in 52% of the world’s best restaurants and over 23,000 online monthly searches. Its popularity is also clear from its position as the most traded of the five at auction (calculated using data from one of our partners, The Wine Market Journal).
Lafon-Rochet and Les Ormes de Pez take fourth and fifth places, with Economics scores of 694 and 682 respectively. Both are a level below the top three in terms of price per bottle and Quality score, but they match Montrose on long term price performance, with compound annual growth rates (CAGR) of 9%. Saint-Estèphe is an appellation on the rise.
2015 was a phenomenal vintage for reds in Burgundy. However, parts of the Côte de Beaune were affected by frost, and the quality of 2015 whites is therefore less consistent. Below we examine the top five white Burgundy 2015s by overall Wine Lister score.
Domaine Leflaive takes two of the five top spots. Its Chevalier-Montrachet has the highest overall Wine Lister score of all white Burgundies in 2015 (963). This is thanks to a Quality score of 962 (four points higher than the wine’s average across the last fifteen vintages) and an impressive Economics score of 991.
Domaine Leflaive’s Bâtard-Montrachet comes in third place. Both wines benefit from Domaine Leflaive’s position as a superstar white Burgundy brand. Indeed, five of the 10 highest white Burgundy Brand scores are held by wines from Domaine Leflaive.
The second highest overall scorer of white Burgundy 2015 is Domaine Bonneau du Martray’s Corton-Charlemagne (958). It is both the highest Quality scorer (977, 10% above its average) and the lowest priced (£106 per bottle) of the five, presenting an interesting value opportunity. It is also to be found in 36% of the world’s top restaurants, the most prestigious count of this week’s top five.
Chablis is represented by Vincent Dauvissat’s Grand Cru Les Clos. Identified as one of only three Chablis Buzz Brands on Wine Lister, Dauvissat’s Cru Les Clos is present in 23% of the world’s top restaurants, helping it to a Brand score of 907. Its overall Wine Lister score of 938 for the 2015 vintage is completed by a Quality score of 947 and its second strongest ever Economics score of 969.
Finally, Maison Joseph Drouhin’s Montrachet Grand Cru Marquis de Laguiche has the fifth highest Wine Lister score for white Burgundy 2015s (917). Though it has the lowest global restaurant presence, it is more present than the other four wines in top restaurants in Asia.
Wine Lister Economics scores not only reflect a fine wine’s economic clout, but also predict its future price performance. The economics of fine wine are increasingly important. Some purists wish it weren’t the case (wouldn’t it be wonderful if quality could exist in isolation from pecuniary concerns?), but consider the plight of the producer making an exceptional wine, that without any brand recognition or commercial strategy doesn’t ever see the light of day. It never finds an importer, or its way into the consumer’s glass, let alone the investor’s portfolio.
That is why Wine Lister scores capture 12 data points across three rating categories, to measure the all-round performance of a fine wine in its journey from vine to glass. After Quality and Brand, the third Wine Lister rating category is Economics. The Economics score shows the producer whether its commercial strategy is working, but more than that, it can also serve to indicate to the collector whether the wine makes an economically sound investment.
Bordeaux wines with an Economics score above 900 in November 2016 had increased by 17% in price on average by January 2018. By contrast, those with Economics scores below 600 gained just 8% subsequently. We can see this pattern in action in the chart below, which looks at Saint-Estèphe wines over the same 14-month period. The wines with the highest Economics scores at the beginning of the period proceeded to increase more in price than those with lower scores as a general rule.
The below screenshots of Wine Lister’s price history tool illustrate graphically the difference between two wines with different economic profiles. Vieux Château Certan’s Economics score lies in the “strongest” portion of the Wine Lister 1000-point scale at 907/1000. While Château La Providence’s Quality score is strong (708/1000) its low Economics score of 389 is the result of a lower price, weak price performance, volatile prices, and modest trading volumes.
Wine Lister analyses five criteria in order to measure a wine’s economic strength, expressed as an Economics score out of 1,000. Four of these criteria use pricing data from our data partner, Wine Owners, while the fifth uses trading volume figures from the Wine Market Journal:
- 3 month average bottle price
This “market price” is the ultimate measure of what people are willing to pay for each wine in each vintage. Data is updated weekly, and bases prices on a three-month rolling average. Prices are shown In Bond per bottle.
- Short-term price performance
A wine’s financial strength also depends on its price performance. Wine Lister calculates price changes over six months for an indication of short-term price trends.
- Long-term price performance
Long-term performance measures a wine’s compound annual growth rate over three years.
- Price stability
Price fluctuations over a 12-month period are distilled into the measure of a wine’s stability. Wines with less volatility are more consistent, less risky and therefore earn a better Economics score.
- Volume traded
Added to pricing information is data on a wine’s liquidity. A wine can have good price performance but lack the current market demand, potentially making it a less attractive wine for investment.
For some, Piedmont is virtually synonymous with the DOCG appellation of Barolo. While wines from this famous appellation rank amongst the very best on Wine Lister, its understated sibling Barbaresco also holds its own, as we discover looking at the top five Barbarescos by Wine Lister score below.
With an overall score of 924, Gaja’s Barbaresco takes the top spot. It leads thanks to its excellent Brand score (977), over 120 points ahead of Barbaresco’s second-strongest brand. As the only one of the group with brand as its strongest suit, Gaja’s Barbaresco is present in 33% of the world’s top restaurants, has the widest range of vintages and formats on each wine list, and receives over five times more searches each month on Wine-Searcher than the second-most popular wine of the group. Consequently, the wine has the joint-highest Brand score of all Piedmont wines – alongside Giacomo Conterno’s Barolo Monfortino Riserva.
Numbers two to five on the list share the same legendary producer. The recently departed Bruno Giacosa has left behind him a formidable legacy, reflected in his four-fold appearance in this top five. The domaine Azienda Agricola Falleto’s and Giacosa’s negotiant arm expressions of Barbaresco excel across all three categories that make up their overall Wine Lister score.
Azienda Agricola Falletto’s Asili Riserva has the best Economics score of all Barbarescos (967), with a compound annual growth rate (CAGR) of 18.5%. It is also the most expensive at £222 per bottle, and most traded of the five.
Giacosa’s Barbaresco Rabajà takes third place, but holds the best Quality score (963) and best long-term price performance (27.0%). The former is reflected in the wine’s impressive average ageing potential of 22 years, five years longer than the Asili Riserva. Indeed, Rabajà 2004, which achieves an outstanding Quality score of 993, has only recently entered its drinking window, and will be drinking well until 2034.
Fourth and fifth spots are taken by Giacosa’s Barbaresco Santo Stefano (di Nieve / Albesani) and Barbaresco Asili. They display very similar profiles, each performing best in the Economics category, followed by Quality, and then Brand. Both wines still rank as “very strong” on the Wine Lister 1000-point scale, with overall scores of 874 and 860 respectively.
This is a poignant week for Azienda Agricola Falletto, with many of the great estate’s wines being released for the first time since the passing of Bruno Giacosa.
After two quarters of Bordeaux dominance, the latest trading volume data has room at the top for one non-Bordeaux wine. Among the five wines with the greatest incremental increase in trading volumes for the period of January-December 2017 (calculated using figures collated by Wine Market Journal from sales at the world’s major auction houses), sits Louis Roederer’s Cristal in second place.
Volumes of Cristal traded increased by 267 bottles, helped along by a Sotheby’s auction in New York in November where 37 bottles went under the hammer. While this translates into a small Economics score increase of just one point, the wine nevertheless holds the highest overall Wine Lister score of the five at 975/1000.
Château Pavie appears high up the list for a consecutive quarter, with a further 228 bottles added to its trading volume count compared to October 2016-September 2017. Though in third place for incremental change, Pavie has the highest overall volume of bottles traded of the top five (2,466).
The number one spot for increased trading volumes is taken by Château Pape Clément, with 293 more bottles traded over the course of 2017 compared to the previous dataset period. Pape Clément has the lowest Quality score of the top five (825), however high Economics (952) and Brand (960) scores pull the overall score up to 898.
Château Calon Ségur and Château Troplong-Mondot fall in fourth and fifth place for biggest change in trading volumes.
It is interesting to note that Larrivet Haut-Brion Blanc has the highest growth of Economics score, moving up a huge 376 points since Q4 2016, to 669. With the recent spike in trading volumes of the red (as seen in our last analysis), trading volumes of the château’s wines are increasing across the board.
The Bordeaux 2015 vintage broke a more lacklustre run since the formidable 2010, and seemed to prove the wine trade legend of vintages ending in 5. En primeur tastings took place at the crest of “Bordeaux Bashing”, with some journalists reluctant to praise the vintage too highly, and there was talk of inconsistency between appellations. Saint-Estèphe was said to have suffered from more rain than its southerly neighbours, for example. Meanwhile in Saint-Emilion, a lack of homogeneity allowed each wine to express its terroir and its identity to the utmost.
Now that the wines have been bottled, it seems a suitable time to revisit the vintage. Our CEO, Ella Lister, has just got back from tasting over 200 wines from across the two banks with Wine Lister’s partner critics Michel Bettane and Thierry Desseauve. She reports Saint-Estèphe as “exceptional and wrongly dismissed as rained-out”, and names Figeac and Canon as two highlights, both “stunning”. The two Saint-Emilion wines are among the top five Quality scores for the vintage on Wine Lister.
Figeac and Canon both also feature in this week’s top 5: Saint-Emilion 2015 Economics scores, showing that the market recognises their worth. Coming in second and fourth place, both hold premier grand cru classé B status since the reclassification of Saint-Emilion in 2012. Château Figeac 2015 achieves its best Economics score to date with an impressive six-month price performance of 18%.
However, Château Canon is the real surprise here. One of the most talked-about wines by the fine wine trade, its Wine Lister scores are improving from vintage to vintage, with its Economics scores, in particular, soaring. It comes in second place among all Bordeaux wines for Economics score in the 2016 vintage. Both Figeac and Canon are Buzz Brands and also Investment Staples (two of the four Wine Lister Indicators), and so is number one on the list…
Beating both of these is premier grand cru classé A, Château Ausone, with an Economics score of 991 – a record high for this producer, even against the strong 2005 vintage. The château also gains the number one spot across all Saint-Emilion 2015s in Quality, with a score of 990. In the context of overall Wine Lister scores, Ausone is just behind Petrus and Margaux as the third highest-scoring Bordeaux of 2015.
Magrez-Fombrauge and Péby Faugères are the ‘underdog’ entries among Saint-Emilion Economics performers. With Quality and Brand scores ranging from average to strong, the overall score of both wines is “strong” according to the Wine Lister 1,000-point scale (the other three entries sit comfortably in the “strongest” category, with overall scores significantly above 900).
In contrast, one might expect some bigger names, such as Cheval Blanc (a Wine Lister Buzz Brand) to appear higher up the list. Its Economics score of 946 puts it in seventh place, with slower price growth (3% over the last six months). Its price per bottle currently stands at around £500, over five times higher than that of Péby Faugères, and seven times more than Magrez-Fombrauge.
Our most recent market study is out, this time analysing 175 of Burgundy’s finest wines. Last week’s blog gave an overview of the study’s key findings. This week we take a deeper look into one of the upward trends, exploring some of Burgundy’s best price performers.
While it is impossible to argue the position of Domaine de la Romanée-Conti at the top of the Quality and Brand leaderboards, a greater mix of producers excel in long-term price performance. Lalou-Bize Leroy’s Domaine d’Auvenay is a frequent and expected feature within the top price performers, but the list is not without surprises.
Arnaud Ente, while well known by those in the trade, is a quieter name in the global wine world. What Ente lacks in brand presence he makes up for in exceptional quality. Vines, notably his enviable Meursault plots, tend to be harvested late, giving wines their signature opulence. With a Quality score of 909 and a 3-year compound annual growth rate (CAGR) of 34%, Ente’s Meursault Les Gouttes d’Or is one of the best performing whites in Burgundy and the best 5-year price performer.
The Meursault village as a whole steals the show on price performance, accounting for 6 of the top 10 wines in the Economics score-criterion. Domaine Roulot, another producer flying slightly under the radar of Burgundy’s biggest brands also demonstrates strong long-term price performance across all three of their Meursault cuvées.
Meursault is not the only white village on the up. According to our Founding Members’ survey, which accompanies the Burgundy market study, the popularity of Saint-Aubin is increasing. Whether searching for the highest quality or the best value, it seems the white vineyards of Burgundy are the places to be this year.
You can read about more Burgundy trends in the full Burgundy market study by subscribing here. Alternatively, a preview of the first 15 pages is available here.
Today marks the close of a busy week of Burgundy 2016 en primeur tastings, with offer prices largely stable on 2015 despite tiny volumes, thanks to the more generous 2017 in the wings. However, prices have been escalating in the secondary market for several years now, with eight of the region’s top wines averaging more than £3,000 per bottle). Eyewatering, yes, but as illustrated in our recently published study, the majority of the region’s top wines are priced between £100 and £500.
To mark this week’s Burgundy en primeur tastings, the latest Listed section picks out the top five red Burgundies priced under £300 per bottle by Wine Lister score. With an outstanding average score of 913 – putting them amongst the very strongest on Wine Lister – and four of the five achieving Buzz Brand status, these wines are worth the price tag.
Leading the way is Grand Cru monopole Clos de Tart with a score of 947. Recently acquired by Artemis Domaines – Latour owner François Pinault’s holding company – it achieves the best Brand and Economics scores of the group (956 and 964 respectively), and is just pipped into second place in the Quality category by Trapet Père et Fils Chambertin Grand Cru (932 vs 940). Its price has increased 9% over the past six months, and now at £275, it looks like it won’t qualify for this group much longer!
Next comes Domaine des Lambrays Clos des Lambrays – part of LVMH’s portfolio since 2014 – with a score of 919. Alongside Marquis d’Angerville Volnay Premier Cru Clos des Ducs, this is the cheapest (or least expensive) of the group (c.£150 each). It enjoys its best score in the Brand category, with the group’s highest level of restaurant presence (25%), and the second-best average monthly online search frequency (5,079).
In third place is Rousseau’s Clos de la Roche Grand Cru with a score of 910. At almost £300 per bottle, it is the most expensive of the group, contributing to its boasting the best score in the Economics category (937). It is also partner critic Jeannie Cho Lee’s favourite wine of the group; she awards it a score of 95/100 on average.
Dropping just below the 900-point mark are Marquis d’Angerville Volnay Premier Cru Clos des Ducs and Trapet Père et Fils Chambertin Grand Cru (899 and 891 points respectively). They display very different profiles. The latter leads the Quality category, with the former lagging 60 points behind (still with a very strong score of 879). However,Trapet’s Chambertin struggles in other categories, with the group’s lowest scores for Brand and Economics (867 and 823). Meanwhile, thanks to the group’s strongest long and short-term growth rates, Marquis d’Angerville’s Volnay Clos des Ducs enjoys an excellent Economics score (939) – the second-best of the five.
If you’d like to discover more about Burgundy and its top wines, then click here if you are a subscriber to view the full regional study, or here to see a preview if you haven’t yet subscribed.