Will investing in vintage Champagne continue to sparkle in 2023?
As the clock struck midnight on the 31st of December, the sound of Champagne corks could be heard all over the world. Happy New Year! Welcome, 2023! This will be the year that will make all our dreams come true! Everyone everywhere was enjoying the excitement of the new year, naturally with a glass of champers in hand.
Synonymous with fun and celebrations, Champagne is to wine what Marilyn Monroe is to women: it knocks you out with its body and then reels you in with its brains. Never in the history of mankind has there been a drink so symbolic of celebration and joy as bubbly. Kate Moss and Johnny Depp famously bathed in it, Samuel Johnson likened it to being in love, and Dom Perignon, the founder of the famous Champagne that bears his name, said he was “drinking the stars” when he first tasted his eponymous product.
But while Champagne may be the drink of choice for Gatsby-esque parties and days spent on private yachts, is it investable? Traditionally, the bubbly stuff is usually left on the table when it comes to diversifying your portfolio, with classic investors opting for big, bold Bordeaux and Burgundies. However, don’t overlook champers just yet. Some vintages ( we are thinking particularly of the 1996 and 2000 Dom Perignon, which have grown by a massive 600% and 400% since their release) are undoubtedly good deals for the cellar.
But is that enough to sustain the current trend that is making investors portfolio’s fizz with excitement? Or will the Champagne bubble burst in 2023?
Champagne’s bubbles continue to rise in 2023
From a grower’s point of view, the mood is one of cautious optimism for 2023. “We are very satisfied with results for 2022, with sales in the range of 320 to 330 million bottles”, says Maxime Toubart, chairman of the Champagne winegrowers’ organisation. “Nevertheless, there are some causes for concern with soaring prices of dry goods, an increase in production costs due to our environmental practices and, of course, inflation and the geo-political context. We have to remain cautious”.
Data backs up Toubard’s words. Liv-ex documented bubbly as being one of the highest risers of 2022, beaten only by Burgundy. Vintage Champagne headed into 2023 after a year underwritten by strong demand and high prices for top prestige cuvées, causing savvy investors to lick their lips. This was indeed good news, but it also raised questions about the sustainability of the sector’s momentum.
Investing in Vintage or Non-Vintage Champagne in 2023
Naturally, when we say Champagne, we do not mean all Champagne. It is important to note that investable Champagne is usually from a recognised brand and will always be vintage.
For example, big hitters Cristal and Krug led the vintage Champagne revolution of 2022. Both of these brands showed over 40% rises on certain vintages according to Liv-Ex Champagne 50 data (Cristal 2013 up 40%, Dom Pérignon P2 1998 and Cristal 2004 both up 39%, and Cristal 2002 up 38% since year-to-date release). The Champagne 50 tracks only big name vintage brands such as Bollinger La Grande Année, Dom Pérignon, Krug, Cristal (including rosé), Pol Roger Sir Winston Churchill, Salon Le Mesnil and Taittinger Comtes de Champagne. These reputable and reliable brands will give you the most lucrative returns.
However, Cristal and Krug are well, Cristal and Krug. If you are new to the wine investment game, or are looking for an entry point into investing in Champagne, well-known names with reputations that you can trust may be out of reach. Lesser known brands have not shown such stellar returns, leading investors to wonder whether they should stick to the A-list regarding bubbles.
Why investing in vintage Champagne in 2023 is a good idea
Investors take note. Since 2004, Champagne has been the second-best performing region of the Liv-ex 1000 index, with a total return of +291.5% or CAGR of +8.9% (Compound Annual Growth Rate), behind only Burgundy. That’s quite a lot of bang for your bubbles.
Market trends from 2022 show that despite worsening macroeconomic conditions, the Champagne sector’s stratospheric rise is not showing any signs of stopping. There are reasons to expect this to continue: While demand remains strongest in Europe and North America, the Asian market is becoming increasingly more interested in Champagne. Contrary to historical data (where traditionally fizzy wine was not a premier choice for celebrations), the largely untapped Asian market now sees big name, vintage Champagne as de riguer, both for the table and the cellar. Additionally, luxury consumption continues to grow in dynamic with a focus on reputable brands being the clear winners. Experts predict the Champagne revolution to mirror the trends of Tuscan wine that rose to stardom in the 1980s and stayed on top for a long, long time.
One of Champagne’s most alluring qualities, aside from its sheer sexiness, is its enviable global distribution network. Couple this with surging prices, sustained performance and strong supply and demand imbalance (far more demand than supply), we suspect that Champagne will continue to sparkle well into next year.
Don’t miss out on investing in the vintage Champagne bubble. View our Champagnes on our Live Market and start investing today!