Wine is among the most profitable investments in the super rich’s portfolio

What was 2021 like for the “Ultra-high-net-worth individuals”, the super-rich, those with have a worth of more than 30 million dollars? A good year, so much so that the number of the super-rich has grown by 10%, even if the pandemic has made the increase in levels of inequality even more evident, while the battle against climate change is destined to mark a real turning point. To outline what will be the trends and prospects of 2022, is the edition n.16 of “The Wealth Report” by Knight Frank, a leading company on the luxury real estate market worldwide. And it will also speak about wine.
First of all, the wine is an asset – or an investment – linked to a passion, analyzed by “Knight Frank Luxury Investment Index”, along with other collectibles such as watches, art, coins, rare whiskeys, bags, cars, jewelry and diamonds. The average profitability of these assets, summed up by the “Knight Frank Luxury Investment Index”, which averages the various assets, was +9% in 2021 and +123% in the last 10 years. Wine, instead, did better: +16% in 2021 and +137%, while whiskey did even better, at least in the long term: +428%.
To tell about 2021 wine investments, Knight Frank heard Miles Davis, “Wine Owners” manager, who underlined how “the market achieved good results in 2021, with an average growth of 1% per month. Particularly good performance of Champagne (31%), especially thanks to the extraordinary 2008 vintage, and Burgundy (+25%), while Bordeaux (+10%) is slightly behind. Investments that come mainly from Asia for Burgundy wines, and from Great Britain and the United States for Champagne. There has been a new wave of investments in the wine market, some of which are driven by macroeconomic factors such as concerns about inflation – with wine seen as a safe investment – but also from more localized factors, such as the drop in supply caused by the weather and the problems encountered along the supply chain. Factors that will also be felt in 2022, while another interesting dynamic concerns the many fine wines uncorked at home, a response to the pandemic destined to remain a habit for many”, concludes Miles.
Another aspect, when it talks about investments, concerns the purchase and sale of vineyards and companies, mentioned by the 2022 edition of “The Wealth Report” by Knight Frank, in the short space edited by David Bourla, Chief Economist & Head of Research Knight Frank France, which remembers how the excellent results of French wine exports (7.3 million hectoliters shipped in the first half of 2021, +15% on the same period of 2019) consolidate the value of the vineyards, which still represent an investment capable of attracting the attention of specialized groups such as Atream.