Established, renowned estates like DRC still generally make excellent wine in poor weather years, but this is not true of all producers. Photo Credit: Flickr CC user Edlynne
While many serious wine collectors focus on vintages from years when the growing conditions were ideal, for collectors who look at wine as an investment, this may not be the best approach. Off-vintages cost less up front than premium vintages, and also appreciate at a rapid rate. For example, 2008 Bordeaux vintages cost, on average, 50 percent less than 2009 vintages (which grew in better weather conditions). Many wine experts say that quality growing years are not always the best indicator of investment returns for premium bottles. Instead, many experts agree that investing in off-vintages can be worth the effort if the goal is resale.
Off-Vintages Require Less Investment Up-Front
Collectors who have invested in early 2000s vintages, when the weather was less than ideal, have seen many of their wines triple in value over the past 10 years. In a 2003 study, off-vintages sold for an initial cost of $272 per bottle, on average, compared to $445 per bottle for sought-after vintages.1 This means that collectors who took a chance on off-vintages from premium estates paid less up-front, and received a larger boost in resale value compared to their colleagues who only invested in the finest vintages.
For example, the 1990 Latour received consistently excellent ratings from wine critics, and its value on the market has since increased by 46 percent. However, its lesser-known peer, the 1992, has increased in value by 263 percent, even though wine critics agree that it is not of the caliber of the 1990. This is not an isolated case. The warm, ideal climate on the Margaux estate in 1990 created a buzz of excitement in the wine world, and earned Margaux yet another perfect score from Robert Parker. Serious collectors bought this vintage by the case, and each of its bottles have since risen in value by 97 percent. However, when, like Latour, Margaux was struck by poor weather in 1992, the resulting wine also increased in value more quickly than the impeccable 1990. A 1992 bottle from Margaux has increased in value by about 124 percent in the past 20 years.
Collectors who want to turn a profit by investing in wine would be smart to focus on off-vintages from premium estates, rather than investing in the estates’ most popular vintages. Yet, while this method often results in a better return on investment, it isn’t always the best choice for collectors who enjoy drinking the wines in their cellars. During poor weather conditions, premium estates still manage to produce high-quality bottles, but the taste of these bottles will sometimes be noticeably lower in quality than that of sought-after years.
The Best Estates Make Quality Vintages, Even in Miserable Weather
A word of caution to collectors: buying off-vintages can result in better investments, but only if those vintages come from premium estates with refined growing techniques. The reason for this is two-fold. First, buyers who cannot afford sought-after vintages from premium estates will seek out less popular vintages, as these often cost less. These buyers are willing to compromise on vintage, as long as they can say they own a Romanée-Conti bottle. Because of this, a ready market exists for those wishing to resell off-vintage bottles from excellent estates. Finally, the oldest premium estates have been developing their winemaking techniques for hundreds of years, and have the resources to make their wine in the most meticulous way possible to ensure an excellent product. As a result, the best estates are able to get the most out of their grapes through wise cultivating and harvesting decisions, as well as carefully honed production methods that turn out good wines, even in poor years.
Romanée-Conti wines average in cost between $5,000 and $20,000 per bottle; this cost also applies to years when the weather was not ideal in Burgundy. The estate’s limestone-rich soil allows water to drain freely without intervention, meaning that the rain has little effect on the quality of the taste. The multiple vineyards that span terroirs foster vines that vary in growing conditions. This requires owners to hand-select the grapes it uses for the Grand Vin in order to get the best grapes from every vineyard. Even in years when yields are poor, Romanée-Conti is one of the few estates with nearly unlimited resources to prevent grape spoilage. The result is off-vintages that still taste on-par with the finest vintages from less-renowned estates.
Wine As an Investment: Not All Off-Vintages Increase in Value
While not all off-vintages increase in value, especially if the weather was very poor that year, sometimes one estate’s fortune can make it especially sought after. The best example of this is the 1984 Lafite. Most of the wine from Bordeaux in 1984 had multiple fatal flaws, as rain and hail nearly destroyed every vine in the region. One of the only estates not impacted by this weather was Lafite, whose 1984 bottles are sought-after for their rarity. In fact, this vintage alone caused the average worth of 1984 First Growth vintages to quadruple in value, even though most of the wine that year was poor and worth little on the market. Lafite was an outlier; the other wines from 1984 were worth so little that the comparatively premium value of Lafite brought the average price up for the entire year.
Unless investing in Lafite, it is not usually wise to purchase Bordeaux bottles from 1984 without thoroughly researching their ratings. Most collectors avoid this vintage entirely, making it nearly impossible to resell the bottles. A similar phenomenon happened in 2002 in Rhone Valley and Piemonte. Most grapes in Europe rotted after an unusual rainstorm in 2002, and as a result, many collectors are wary of buying wines from these two regions in this vintage. This greatly decreases their resale values.
Consider Your Collection’s Goal
Collectors who want to cellar and drink their wines should consider investing in sought-after vintages from premium estates, unless they are sure that an off-vintage also has a quality taste profile. Sometimes off-vintages from poor weather years receive unexpectedly high ratings for the year, which is why it is always best to research tasting notes and ratings on a bottle no matter what your goals are for your collection. However, in general, those interested in drinking the finest wine, rather than investing to resell, may want to stick with the best years from an estate instead of chasing off-vintages from that same estate. Collectors who want the statistically biggest return on investment from their cellars should consider skipping sought-after years in favor of lesser-known bottles from high-end producers.
Still, no one can predict with certainty whether a particular vintage will be a high return investment. For example, dozens of sought-after early 1990s Bordeaux vintages were expected to increase in value more than they have on the modern wine market, yet off-vintages from the region have unexpectedly matured faster on the market. While some studies have shown patterns in market, successfully collecting and reselling wine still boils down to luck and the unique aging qualities of the vintage year. More collectors also have access to modern market data than ever before through the internet, which makes it easier now to find, buy, and resell wines and to follow market trends. When collectors use verified market prices from sources such as Liv-ex, they are more likely to seek out the off-vintages and top vintages that will give them the greatest returns.2
Whether you are looking for a famous vintage to complete your collection, or you’re looking for wine as an investment, use Vinfolio’s search tool. Vinfolio’s online portfolio allows users to search for wines by vintage and producer, and provides collectors with the research they need to make an informed decision.
Whether you are starting your high-end wine collection or adding to an established portfolio, Vinfolio is your partner in buying, selling, and professional storage. Contact us today to get access to the world’s best wine.
