2021 was the strongest trading period that the wine market has ever seen. The market’s benchmark index gained 2.6% in December alone to close out the year 23% up. This set the wine market’s performance above that of many of the world’s stock markets, such as the Dow Jones Industrial and Nasdaq which grew by 18.7% and 21.4% respectively. Even when equity markets were rocked in November after the news of the new ‘Omicron’ variant, the Liv-ex 100 rose 2.7%.
All of the wine market’s main regions showed growth in 2021. Their indices achieved positive growth over one year and two year periods. The weakest performer was unsurprisingly Bordeaux whose sub-index was up 9.2% by early December, while the Champagne 50 was the best, rising 33.7% by the same point and has continued to grow rapidly.
The Liv-ex 1000 index, which incorporates all of the above, is the wine market’s broadest index and has become a yardstick for measuring the ongoing regional diversification that has helped to drive the market in recent years. The index has grown by 18.2% over the past year and 22.7% over the last two.
If you had bought ten cases of this wine in January 2021 for £56,500 you could trade it now for £120,750, generating a return of £64,250 in a year.
The big winner of 2021 was definitely Champagne. In fact, many of you may have already taken advantage of the region’s growth and disposed of some of your bubbly recently at a good profit. Champagne’s best wines have collectively risen by 40% over the past year and the best performing wine across the entire wine market last year was from champagne.
The wine in question is Salon 2002 and over the past year, its value has risen from £5,650 to reach a market price of over £12,075 today, a growth of 113%. To put that into perspective, if you had bought ten cases of this wine in January 2021 for £56,500 you could trade it now for £120,750, generating a return of £64,250 in a year.
Following a record-breaking 2021, the market has continued to move at a rapid rate and our sights have shifted to the year ahead. Moving through 2022 we will be focusing on Champagne, Burgundy and California. Burgundy has continued to show growth and we expect this to be compounded throughout this year. Rarity is Burgundy’s biggest driving and the region’s most sought after wines are produced in such minuscule quantities that they can’t even come close to satisfying the market’s demand.
There is a huge amount of excitement in the trade around the 2020 releases and due to Burgundy’s rapid sell-through rate, we would suggest agreeing on a budget with your Portfolio Manager which can then be allocated to stock as soon as it becomes available to avoid disappointment.
For further information on any of the above please feel free to speak with your Portfolio Manager directly, or contact the team by telephone or email.