MUST BUY Investment Staples

Last week we introduced Wine Lister’s new toy, a dynamic guide to the ultimate wines any fine wine lover should consider for their cellar – WL MUST BUY. While the full list is approximately 1,800 recommendations strong, Wine Lister provides some useful segments to help cut into all that data, aside from the usual criteria that can be found in our advanced search function (region, price, colour, score etc).

Wine Lister Indicators are designed to provide suggestions for your specific buying purpose, whether it be to discover something new (Hidden Gems), impress at a dinner party (Buzz Brands), drink well without breaking the bank (Value Picks), or add to your investment portfolio (Investment Staples).

MUST BUYs and Indicators together provide a ready-made source list of the best wines to meet your needs. Below we look at the combination of our MUST BUY algorithm with Investment Staples.

Investment Staples are wines above a certain price, that are long-lived (but not too old), have proven wine price performance or represent good value compared to their peers, and are relatively stable and liquid, with recognition from our network of global fine wine trade members.

There are 18 MUST BUY Investment Staples that score 97 WL points or above. Perhaps unsurprisingly, Bordeaux represents almost half of these, with eight MUST BUYs, including two first growths (2016 Mouton, and 2016 Lafite), and 1975 Petrus.

These eight Bordeaux have an average price of £511 per bottle, or just under an eighth of the average price of the three Burgundies to qualify as MUST BUY Investment Staples. However, as investments, some of them may require patience – the prices of those from 2016 have yet to increase any significant amount. By contrast, DRC’s La Tâche 2005, Richebourg 2005, and Comte Liger-Belair La Romanée 2012 are testament to Burgundy’s impressive upward price trajectory, having already achieved three-year CAGR (compound annual growth rates) of 21.8%, 23.4%, and 33.1% respectively.

Outside of Bordeaux and Burgundy, Italy holds court with MUST BUY Investment staples from Bartolo Mascarello, and the indomitable Soldera among others.

You can see the full list of MUST BUY Investment Staples here, or check out some other MUST BUY lists, such as MUST BUY Hidden Gems, or MUST BUY Value Picks.

Don’t forget that the MUST BUY list changes weekly. Revisit MUST BUY Investment Staples again next week to see new entries.


Investing in Italy – top five Brunello by Economics score

With our founder, Ella Lister, just back from tasting the latest releases at Benvenuto Brunello in Montalcino, we thought we’d dig deeper into the data behind the appellation’s top wines. The pyramid system in the region means that most producers make at least three wines: in the middle, a Brunello di Montalcino DOCG Annata (or “vintage”); in good years, a Riserva (with longer ageing but also nearly always the best selection of grapes from the estate); and at the bottom of the pyramid, a Rosso di Montalcino DOC, producing fresher, approachable wines requiring less ageing.

This allows, and indeed encourages, a healthy level of selection in the region. At last weekend’s event, the vintages on show were 2013 Brunello Riserva (excellent), 2014 Brunello Annata (a tricky vintage, with some producers declassifying to Rosso di Montalcino), and Rosso di Montalcino 2017. There is also a trend in the Brunello DOCG towards vineyard-specific crus, such as Casanova di Neri’s Tenuta Nuova or Il Marroneto’s Madonna delle Grazie, both of which feature in this week’s top five: top Brunellos by Economics score.

When examining the economic profile of Brunello wines, we see that Riservas tend to have higher Economics scores than Annatas, in line with their higher Quality scores. The best-performing Brunello by Economics score is Biondi Santi’s Brunello di Montalcino Riserva, with a score of 902. It earns the number one spot of this week’s top five with the highest price at £315 per bottle in-bond, and annual auction trading volumes of 458 bottles. The wine also outperforms the rest of the group for both Brand and Quality scores (904 and 938 respectively).

While Riservas are strong economically speaking, Annatas often have stronger Brand scores than their longer-aged counterparts, being produced in larger quantities and thus achieving greater visibility. In second place is Valdicava’s Brunello di Montalcino Madonna Piano Riserva, with an Economics score of 892, whereas its straight Brunello has a Brand score 57 points above its “big” brother, an example of the potential branding conundrum surrounding Brunello and other parts of Tuscany with a Riserva denomination. Nonetheless, the Riserva shows better price performance, with a compound annual growth rate (CAGR) of 15.2%, and an average of 257 bottles sold at auction annually.

Specific “crus” can also perform better than their straight Brunello Annatas in economic terms. In third place is Casanova di Neri’s Brunello di Montalcino Tenuta Nuova with an Economics score of 865. Despite having the lowest Quality score (841) and lowest price (£70) of the group, it earns this week’s second-highest Brand score (887).

In fourth place is Il Marroneto’s Brunello di Montalcino Madonna delle Grazie, the winery’s top cru, produced from grapes grown around the historic chestnut flour store house, and below the church by the same name. It has an Economics score of 847, benefitting from by far the best long-term price performance of this week’s top five, with a compound annual growth rate (CAGR) of 22.9%. Moreover, it sits just one point shy of this week’s number one in Quality terms (937) at 40% of the price – £130.

Rounding out the group is Poggio di Sotto’s Brunello, with an Economics score of 815.

While Super-Tuscans have been recognised for their investment potential for some time, Brunello still sits rather in the shadow of its Bordeaux-blend brothers. In Wine Lister’s first Tuscany market study, conducted in 2017, Brunello held nine places out of the top 25 Tuscan Economics scores. Today that number has increased to 14, as Brunello – Montalcino’s very own, highly ageworthy selection of the Sangiovese grape – goes from strength to strength.


Champagne – slow and steady wins the race

At the end of last year, Wine Lister released its first ever Champagne report. As well as exploring a handful of key trends as identified by Wine Lister’s Founding Members, the report also sheds light on top Champagnes as compared to other regions in terms of economic performance.

Prices of the top Champagnes (Dom Pérignon, Krug Vintage, Louis Roederer Cristal, Salon Le Mesnil and Dom Pérignon Rosé) have seen a compound annual growth rate (CAGR) of 4.8% over the last six years. Relative to other major fine wine regions, this long-term growth is slow, as shown in the chart below, but also stable.

One notable advantage of Champagne as an investment option it its low volatility. Indeed, Champagne prices show a much better level of stability in the secondary market (deviating by just 2.5% from the average price over 12 months) than any other major fine wine region. Slow and steady wins the race.

Moreover, recent price performance shows Champagne accelerating. Prices of top Champagnes are starting to grow at a faster rate than their counterparts in California, Bordeaux, and Tuscany, beaten only by Piedmont and the seemingly unmatchable Burgundy. Indeed, as of December 2018 top Champagnes had seen a 12-month price growth of 11%. The region’s potential for long-term investment is already being acknowledged by the trade, with one of our Founding Members, a top tier UK merchant commenting “Champagne (Salon especially) has experienced solid growth and has become a reliable investment for collectors”.

Salon Le Mesnil is the number one performing Champagne for price performance, with an Economics score of 978, closely followed by Krug’s Clos d’Ambonnay (962). Krug also tops the Champagne Economics charts with its Clos du Mesnil, Brut Vintage, and Collection. Interestingly the only NV Champagne to appear within the top 10 Champagnes for Economics is grower Jacques Selosse’s Brut Initial, with an Economics score of 911. Its price, £106 (per bottle in-bond), is a mere 18% of the average price of the other nine top Champagnes by Economics score.

To read more key findings from our in-depth Champagne study, read the free summary here. (The key findings and full study are also available to download in French on the Analysis page.)


Listed: The top five 2013 red Californian wines by Economics score

While wines made in The Golden State are not as affected by vintage variation as their European counterparts, the 2013 vintage was for California as close to perfect as they come. The long, hot summer led to Cabernet Sauvignons with extreme fruit concentration and firm structure – a recipe for long-term cellaring. The vintage’s economic credentials seem equally promising, with Economics scores of the top five Californian reds from the 2013 vintage outperforming their respective wine-level average by 114 points (averaging 979 in 2013 versus 864 across all vintages).

Perhaps unsurprisingly, the number one spot is taken by Screaming Eagle Cabernet Sauvignon. At 996, its Economics score is not only the highest of this week’s top five, but of all 2013s on Wine Lister (matched only by 2013 DRC Richebourg). It is also by far the most expensive of the five at £2,363 per bottle – over twice as high as the price of the other four combined. Screaming Eagle’s “mailing list” sales model teamed with tiny production quantities (7,800 bottles per annum on average) means that demand for this wine consistently outweighs supply. This could explain the wine’s strong presence on the secondary market, with 855 bottles traded at auction over the last 12 months (according to figures collated by the Wine Market Journal).

In second place is 2013 Pahlmeyer Proprietary Red. Interestingly, it has the lowest Quality score of the group. Indeed, its 2013 Quality score is 74 points lower than Pahlmeyer’s average (848). Contrastingly, the 2013 vintage receives its best ever Economics score of 979, boosted by a six-month price performance of 18.7%.

The third spot of this week’s top five is occupied by the only Pinot Noir of the group, Kistler Vineyards Pinot Noir, with an Economics score of 972. It is the only wine of the five to have been released before 2016, and thus the only one with a three-year compound annual growth rate (28.2%), whereas Economics scores for the other four 2013s are based upon price performance over the short term only. Kistler’s place in the top five 2013 Californian reds by Economics score is impressive, given its lower price point (£101 per bottle, compared with an £843 average for the other four wines).

The penultimate wine of this week’s top five is 2013 Scarecrow. Alongside its best ever Quality score (987), the 2013 vintage achieves an Economics score of 965, helped by the second-highest three-month average price (£663) and the best price stability of the group (with standard deviation of just 4.1% over the last 12 months).

Last but by no means least is Philip Togni Vineyard Cabernet Sauvignon, with an Economics score of 964. Though fifth for economics, it is number one for Quality, thanks to a 100-point score from Wine Lister partner critic, Antonio Galloni, who calls it “a majestic, towering wine… one of the wines of the vintage”.


The impact of price movements according to Wine Lister

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).


Demystifying fine wine economics

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:

  1. 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.

  1. 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.

  1. Long-term price performance

Long-term performance measures a wine’s compound annual growth rate over three years.

  1. 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.

  1. 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.


Bordeaux 2008 vintage, 10 years on

Last week we were lucky enough to taste through the 2008 vintage of Bordeaux grands crus classés at BI Fine Wines’ 10 years on tasting. Below we explore what light Wine Lister scores have to shed on the quality and price performance of different appellations in 2008.

Wine Lister’s holistic and dynamic approach allows us to not only see which appellations produced the vintage’s best wines, but also demonstrates if and how the market has since reacted to each appellation’s relative quality.

You can download the slide here: Wine Lister Bordeaux 2008 vintage overview

Featured wines: Petrus, Lafleur, Yquem, Haut-Brion, Lafite


Burgundy’s top price performers revealed

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.