Rather than storing wine for their own consumption, some purchasers prefer to buy wine as an investment.
On that front, Burgundy is an excellent choice. To the delight of wine investors and the exasperation of oenophiles, the market price of Burgundy wines has trended steadily upward over the past decade.
We’re not investors here at BurgDirect, and we won’t pretend to offer you investment advice. But to any clients interested in getting into the investment game; a bit of information that might help you decide whether you want to become an investor, or will find more pleasure from simply drinking the wine!
First, What Explains the Price Increase?
There are many different factors responsible for the price increase of Burgundy over the past few years.
The simplest thing to point to is increasing demand. Burgundy has always been a land of amazing wines, but this wasn’t always known to your average wine drinker. As Burgundy’s reputation has grown, so has demand for her wines; in Western countries and emerging Eastern markets alike. As we all know from Econ 101, growing demand in the face of finite supply puts an upwards pressure on price due to Burgundy’s limited size.
Another likely reason is the specter of climate change looming in the distance. Extreme weather events and fluctuating temperatures have killed many a grape before it could reach the bottle, and as temperatures continue to increase, the freshness and acidity that characterize Burgundy wine are likely to change - necessitating a change in grapes, harvesting techniques, or the traditional character of Burgundy wine.
Currently, the effects of climate change have proved a double-edged sword for Burgundy. While late frost and hailstones have destroyed many crops, the slight increase in average temperatures has been a remarkable boon to the wines, pushing Burgundy into a new golden age. The wines that manage to make it to harvest are some of the best to come out of the region in decades.
This combination of factors - the amazing wines currently coming out of Burgundy, and the predicted future scarcity of traditional Burgundy- has many people thinking that now is a good time to buy - for personal consumption as much as investment.
Proper Storage is Paramount
Wine is a living thing, sensitive to light, heat, vibration, and dramatic changes in its environment. Because of this, it has to be stored carefully to ensure quality and longevity. Regardless of what’s on the label, if buyers can’t be assured that a wine was properly stored, the value of the bottle will plummet.
The easiest way to ensure proper storage is to pay for it; especially if you don’t have a temperature- and humidity-controlled cellar to call your own. Professional storage facilities are purpose built to look after wine, keeping bottles in pristine condition year after year.
If you do have a wine cellar and prefer to go the home route, you probably don’t need us to tell you how to store it. But just in case, the three most important things to think about are:
Temperature: Wine should ideally be stored at around 55°F. High temperatures accelerate chemical reactions, which can cause wines to lose their vibrancy, flavor and aroma, giving a muddled “cooked” flavor to the wine or, in the worst case, turning it to vinegar. While the first might still technically be drinkable, either scenario will basically render wine worthless from an investment perspective..
Light: Similar to heat, light will interact and interfere with the chemicals in the wine, altering the taste, aroma, color and mouthfeel for the worse.
Humidity: Last, a properly balanced humidity level of around 60-70%. Too much moisture in the air will result in mold and mildew, whereas dryness could result in cracked corks, causing oxygen to seep into the bottle and ruin the wine.
Assuring Provenance
Provenance is French for origin and refers to a bottle’s authenticity, history of ownership, and storage. This is the second most important factor in maintaining the market value of your wine.
Good provenance is important to buyers because it helps them avoid fraud and is a clue about the condition of the wine in the bottle. More ownership generally means more transportation, which increases the chance of damage to the wine. So when it comes to provenance, the best wines are those purchased directly from the producer (as they are with BurgDirect), then stored in a single, climate-controlled cellar.
With that in mind, be sure to keep all records of purchase and transport as proof that your wine was purchased from the producer. If you’re having your bottles professionally stored, keep those records as well.
If you sell your wine through an auction house, they will ask for the documentation that verifies its provenance and often ask for photos of your wine cellar as well. Make sure you have a paper trail so you can show them your bottle’s been looked after!
Conclusion
Entering the seller’s market is a step that few wine lovers take in their lifetime. Knowing which wines will be sought after requires a deep knowledge of the global wine landscape, and maintaining the salable condition of your bottles requires excellent storage facilities and organizational skills.
That’s a lot of work. But for the right person, it can also be a fun hobby. While the best way to enjoy a wine, in our opinion, is to drink it, knowing that your bottles will continue to appreciate after you buy them brings a nice peace of mind. And hey, if selling a bottle allows you to buy several more, that’s not such a bad deal either!