Investing in Champagne – Why and How

Most Champagne is made to be enjoyed sooner rather than later. The standard, household name selection we see when we are everyday shopping and likely to come past at supermarkets is that of  NV (non-vintage) Brut which will have a recommended shelf life of three to four years. Sometimes we might want to push the boat out and have a more select Champagne which may see us buying a less than well known label (grower) and here we are likely to be purchasing at a local / online wine merchant and, if once again they are NV, we are looking at drinking them in the not too distant future.

Sticking to purchasing for the art of consuming, we can scale things up by buying vintage Champagne which not only can be stored for several years prior to us opening it, we can also get to higher quality levels from the said winery as it will be that the harvest (grapes picked) were all of one exceptional year. Here we are in the more desirable level of Champagne purchases where not only consuming is of great interest, but the facts also lend themselves well to investing.

 

When you pop on to the internet the subject of investing in Champagne becomes a whole lot more complicated. There are many websites that reference Champagne guideline prices as well as those actually selling Champagne from eBay and Facebook Marketplace up to dedicated wine auction websites with live bidding taking place. There seems to be no real defined place to value Champagne other than simply browsing several websites and taking an average price.

Questions you need to ask yourself are:

Are the bottles genuine and not fake?

Is the seller offering authenticity / history of the bottle(s)?

Is the seller offering any guarantee?

How will the Champagne be packaged and shipped?

Who am I paying, is the seller genuine?

Prices will vary online depending very much on where Champagne is sold, with the likes of general auction and selling websites you can expect quite a varied selection of prices and most certainly varied quality of re-seller with very little in the way of guarantee of what you are purchasing. The more bespoke / target the website is to selling fine wines then you are likely to see more stable prices set and most certainly the wines will have been checked for authenticity and studied for likely quality of the wine inside. Always check out fine wine market reports online to get a feeling for where trends are.

It is also important to note that prices can fluctuate depending on the economic climate, previous year’s harvest, time of the year (Christmas period and New Year demand increases) and more. Prices go up and down depending on demand.

There will be a suggested peak time to enjoy any wine, usually suggested by the wine maker, and those wines at their optimum moment can scale up considerably in price and are likely to, depending on the label in question, scale down from that point. Another important point to consider is that every day, across the globe, fine wines are opened and enjoyed so if you can play the game of patience, well, then your Champagne bottle will become rarer and rarer the longer it ages. Of course, Champagne is a wine that sees millions upon millions of bottles made so most labels and their vintages, have plenty to go around.

 

“As the years roll by and we see decades of ageing to vintage Champagnes, we then really ramp up their rarity. Many Champagne houses themselves will keep a decent selection of their vintages in their cellars, known as their vinothèque, though as we go back to decades such as the 1980’s and 1970’s their stock level will be fairly low as they will have opened many to entertain their guests / wine journalists / for marketing and PR / sales etc. Going further back then we will for sure see rarity and here is where the demand increases. I have spoken to some Champagne houses whilst down in their cellars and they openly admit that they would purchase back some of the very senior vintages of their labels to replenish their stock levels.” Christopher Walkey

The balance of rarity and quality will be in question once we have gone past the peak consuming moment for any Champagne, though many wine enthusiasts will be of the opinion that ‘the older the Champagne (which has been correctly stored) then the better’. If a Champagne label has been left with the capsule (highly unlikely to be on the open market) or stored correctly with history attached then it will simply go up in value each year it ages despite the wine makers opinion on when it was best to drink it – Many people, especially Champagne collectors, want to enjoy the whole experience of an older bottle of wine starting from the moment they order / obtain it to the moment they get to enjoy the colours, aromas and flavours.

What determines the value of vintage Champagne? Here are some key factors that will influence the price:

Champagne House / Wine Maker.

Style of Champagne.

Rarity of label such a unique to a parcel / limited editions.

Superior reviews from wine experts.

Size of bottle.

Condition of bottle / wine.

Amount of bottles as many prefer to purchase / invest in cases (6 bottles).

 

Many invest in Champagne for their own consumption and this makes great sense if you have that all important patience which we mentioned previously as you can purchase at the going rate now and don’t have to pay rare vintage prices in future years when you decide to open a bottle. The other reason for investing in Champagne is of course for a financial return in investment. The question here most would ask is ‘can you make money by investing in Champagne and if so, how should you do it and who should you trust to advise you?’

We wanted some expert, current climate feedback regarding investing in Champagne so we at Glass of Bubbly decided to ask one of the leading companies in this sector, Cru Wine, and their Associate Director Rostislav Petrov, some questions:

 

Why is investing in Champagne such a trend at present? (I know people have for a long time invested, but we see many such adverts today to invest in wine)

“Before the days of the internet, the common formula for a wine lover was to purchase 3-4 cases of wine/Champagne on release, sell a couple of those at auction a few years later which would often pay for the rest of the wine that they’d kept for themselves. Wine investment has evolved since those days and today represents an important part of the investment portfolio, typically up to 15%. One of the main reasons fine wine and Champagne have been so popular lately is a low coloration to traditional asset classes. With high inflation, fine wine offers safe haven for investors during periods of economic uncertainty. Demand for Champagne has grown significantly in the last couple of years a lot of it is down to strong vintages like 2008 and 2012 being released by big players such as Dom Perignon and Cristal. The quality/price ratio of prestige Cuvee Champagne has been undervalued for a long time. When compared to high end Bordeaux or Burgundy, prestige Cuvee Champagne is still selling at a fraction of the price, however that gap is closing.

Is it also worth mentioning that Champagne is seen as a luxury drink which helps to drive demand across different buyers and markets. Plus the high supply/demand ratio which keeps the prices high.”

 

I haven’t got any space nor the correct storage requirements to invest in Champagne, so what can I do?

“Here in the UK we are very fortunate to have bonded warehousing infrastructure. This means that wine and Champagne can be stored in secure, temperature-controlled facilities and looked after by the professional team. These facilities are duty suspended, which means that a buyer who is purchasing with intention to re-sell the stock does not need to pay VAT at the time of the purchase. This is one of the services we offer here at Cru Wine which is very popular amongst our clients.”

 

Does all Champagne go up in value? Is there a best before date?

“Vintage Champagne will always have more potential to go up in value, compared to non-vintage (NV), especially if it comes from a great year. 2012 is the most recent release from Champagne that received high praise from the international wine critics which has an impact on demand and naturally pushes the prices up. It is also worth pointing out that Vintage Champagne isn’t produced each year meaning there is less of it around so supply/demand issue are there.

Champagne has a great aging potential due to naturally high acidity and strong vintages like 2008 and 2012, when stored correctly, it can be aged for 30+ years. There is no such a thing as a “best before date” and very much depends on the style the consumer prefers. As Champagne matures, it loses the freshness, but gains richness and complexity. I personally prefer Champagne with some bottle age, even when it comes to non-vintage bubbles.”

 

If I want to invest some money into Champagne, will a wine professional be there to guide me?

“Not all of the fine Champagne is an investment grade product so it is very important to have a wine professional to advise you on your purchases. Here at Cru Wine our team of investment managers has 30+ years of combined experience and very happy to assist with what Champagne houses best to focus on as well as vintages.”

 

I think I have got some old and collectable Champagne, what should I do if I wish to sell them?

“Using an auction house remains a popular option to sell your collection. More and more wine merchants offer free cellar valuations nowadays and are able to assist with selling the stock. A number of our existing clients, as well as new ones, regularly sell their wines through us. We offer one of the most competitive brokerage fees in the industry as well as an option of buying stock with immediate payment.“