What does it mean to be an investor in the wine industry? There can be a lot of options, from passive investment in a bottle of collection wine or in the shares of wineries – to active participation in the business in which you invest. Let us briefly consider several strategies of different scale of investments and different degrees of personal inclusion. Three strategies that everyone, or almost everyone, can begin to implement now. And the fourth, as a bonus – an exclusive from Bernard Arno . This, perhaps, everyone can not master. But as the highest achievement in the sphere in question, we must have it in mind.
So, the list of strategies:
1. Invest in the wine collection
2. Invest in the winemaking industry – both in the capital
3. Invest in the winemaking economy – as in the business
+1. To make, as Bernard Arnault
1. Invest in a wine collection
Investments are meaningful only if they are easily converted into income. In the case of wine – if you collected the wine collection at any time can be realized. If there are no opportunities for implementation, buying wine with an investment goal is pointless. In our country you can only buy wine. Where will you sell it afterwards? But buying from us is expensive. Naturally, the closer to the place of production, the shorter the intermediary chain, the more profitable your acquisition. Hence, both purchase and sale should be made on the western trading floors.
And storage? Where to store investment wine before the implementation? Keep it right so it does not go bad? There too. If you do not drink it, why bring it back and forth?
So, our attention should be turned to where your investment ambitions can be realized.
A – invest yourself, B – transfer management of your investments to specialists:
A. Independent formation and management of the investment wine collection
There, in the world of developed winemaking and wine trade, there are many specialized sites providing a full investment cycle “purchase-storage-sale” – wine companies, wine auctions, exchanges and funds.
Berry Bros. & Rudd
Fine & Rare Wines Ltd
Antique Wine Company
Almost all companies are now available on the Internet, all have online storefronts, so to interact with them, you do not need your real presence on the scene. Buying and selling real bottles of wine, you can even never see your collection, although your wine is absolutely real, and if you want you can get it with home delivery.
The companies that provide online trading are very convenient, the wine is certified, it is easy to buy, there is where to store, it is easy to track price fluctuations in the wine market, and it is easy to sell. The company provides, for example, an advance purchase from the wine producer of a new crop, not yet bottled, as the quality of the millesim has already been predicted by the world’s best experts . Provides and delivery of wine from the manufacturer to the storage place – in their specially equipped cellars, where it is stored until the moment of sale.
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You went to the site of the auction, bought wine, then on the same site you track market fluctuations, get information about the lots for sale or requests for your lot. Everything is convenient and quick. But investing in one or two bottles is not profitable, even if you are just a novice investor. Having studied the prices for the service, you will understand that storing wine is cheaper by wholesale. The less the amount of wine you buy, the greater the percentage will eat the storage and maintenance of your wine investment portfolio – in addition to storage, you will also have certification, and the percentage of the company participating in your profits and consultant services, if needed – well, everything that happens when investing in shares, only with wine specificity.
B. Transfer of the formation and management of the collection to specialists
All the same, in whole or in separate moments – choose a trading platform, choose a well-growing wine , create a portfolio of wine investments, track the fluctuations of the wine market – experts can do it for you. Who is it? These are wine funds, or wine brokers in a bank that provides services for alternative, including wine, investments, or consultants to Western negotiating companies or our winemaking companies, as well as consultants you personally trust – for example, a sommelier consultant in a restaurant in which you dine, or even just your friend – a connoisseur of wine with a personal experience of wine investing. But the last options are at your own peril and risk, and we will touch on the first two of the listed list – the wine funds and the wine broker of a reliable bank.
B-1. Transfer of management to the investment wine fund
You can not have a collection as such, but have a simple share in a specialized wine fund. This is quite similar to the stock market, but only wine stocks – one of the most profitable, the wine market is growing very well. So, if you do not care to know that your collection is embodied in such and such specific bottles, and you are attracted only by the profitability of wine investments, then you can spare yourself the need to spend time tracking the operational market information on the network. Formation and management of the collection will not concern you anymore, this is the business of the fund itself, you only receive profit (or losses) from the activities of its specialists in the wine market. Your shares you have the right to sell with a certain agreed period of time, say, once a month, and thereby form your income. But the yield is quite high – up to 30% per annum in the pre-crisis years. A serious restriction for participation in fund units is a minimum entry fee.
Wine Investment Fund – 10 thousand pounds (about $ 20,000)
Fine Wine Fund – 50 thousand pounds (about 100,000 dollars)
Vintage Wine Fund – 100 thousand euros
B-2. Transfer control to your bank broker
If you are not satisfied with a high entry fee to the wine fund, and you would like to start small, but also a small collection, you can not begin to form independently, then you can resort to the help of a Russian wine broker who will do all this for you. True, the services for wine investment in Russia are not very common, and they are rendered in rare banks.
2. Invest in winemaking – as in capital
Here we are talking about investments no longer in the product of winemaking – wine in bottles, but directly in the production of wine, in winemaking. There are several strategies possible.
2-A. Buy shares of a winery company
The easiest, passive way of wine investing is simply to buy shares of some growing winemaking company, if you’re lucky, with some famous successful brand, say, Moët & Chandon . And thus, start participating in the profits of this giant. This will be more abrupt than Gazprom shares.
2-B. Rent a vineyard
Rent a part of the vineyard from the French, say, winery, with the right to profit from the sale of the wine obtained from this vineyard. Do you think this is difficult? But almost any real estate company offering rental or sale of foreign real estate has in the list of its services the maintenance of such transactions. Wine-making farms often expose their land for rent, for condominium or for sale. Rental services are offered both by the estatesthemselves , and by special companies .
2-B. Become a co-owner of the wine business
Under the “winemaking business” can hide as a small winery with a small vineyard, and some giant winemaking, diversifying its business or selling some of its assets. There’s as much as your activity and your wallet. And the methods of complicity are also very diverse. You can only be a co-owner of a business, that is, only participate in profits. The hired management and the winemakers themselves will take over the entire production part. And you can turn yourself into the full force of their managerial talents. This is point 3 ofour list of wine investment strategies.
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3. Invest in winemaking – as in business
If you do not have enough games in the bottle, play in the stock market, rent a vineyard and co-own a winery – buy a chateau in full ownership, become a real master of the wine business – a farm that can produce wine.
This investment can not be considered passive. On the one hand, this is a fairly reliable capitalization of funds – the chateau can only be sold after a while, the demand for French vineyards and chateaux will only grow. But on the other hand – it’s an investment not so much in land and real estate, as much – in business. Your household does not need to be a dead capital in anticipation of a profitable sale, it can also make a profit in the standby mode. Very tangible. You can produce your wine yourself, or with the help of a manager.
If you think that buying a chateau is an impossibly big thing, we inform you that the price of a small estate in Provence is comparable to the price of an apartment in Moscow that you received from your grandmother. Prices in real estate agencies start from 700 thousand euros. Of course, to buy a real medieval castle and 100 hectares of vineyards, your grandmother should be about-very rich, and it is desirable that there are several.
But such an investment is something special, it’s not just a business, it’s an investment in your new exotic future. In life in the midst of vineyards, in a series of peaceful wine-making works, there is such an attraction for a tortured city dweller that people completely change their former way of life. And this is perceived as a fashionable prestige hobby. Every now and then we find out how a celebrity gets an estate in Bordeaux, or Burgundy, or the Napa Valley, so that some time later a new wine with the name Depardieu or Madonna appeared in the world . Books by Peter Meil, in which he describes his experience of resettlement from urbanized Britain to the vastness of the wine Provence are very popular. And people buy up the chateaux and vineyards – the image component in the motivation of the investors is huge. “I have real estate in Moscow.” “And I have vineyards in Bordeaux.”
So – act, sell a car, a garage, a dacha and an apartment, throw your unloved job in a gassy metropolis – and invest in your winemaking future.
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+1. To buy up all wine brands and control the development of the wine sector of a whole region or country
If you think that buying a chateau with vineyards, then there is nowhere else to go in the field of wine investments, you are mistaken. Look at Bernard Arnaud . A man who does not just buy wineries, he, you can say, bought almost the entire winemaking France entirely. Champagne, anyway. He buys not just companies – he hunts for world famous alcohol brands: champagne Moet et Chandon , Dom Perignon , Krug , Veuve Clicquot . The brandy Hennessy brand and the wine brands Chateau d`Yquem and Cheval Blanc are also his. It’s about the “luxury empire” – LVMH-holding, which has in its assets a group of companies specializing in luxury goods. The holding includes, in addition to the famous wine and cognac houses, also fashion houses – Louis Vuitton, Givenchy, Christian Lacroix, Loewe, Kenzo, Guerlain, Berluti, Celine . And also the jewelry company Fred and the Swiss watch Tag Heuer. The abbreviation of the holding company – LVMH – stands for the names of the largest brands included in it: L ouis V uitton, M oet and H ennessy. Impressive? Do you think that this is something exceptional? Not certainly in that way. This is a strategy, that is, an action plan. And it, in principle, can be done, and manyhave done so . So, starting your way of a wine investor with buying a single bottle of collection wine at an online auction, know that you have much to develop.