Liquid Asset? Champagne’s ROI Is Outpacing Burgundy, Gold, and the S&P 500

 

Liquid Asset? Champagne’s ROI Is Outpacing Burgundy, Gold, and the S&P 500
 

You may want to reconsider popping that bottle of bubbly.

In recent years, Champagne has become one of the best investments, Bloomberg reported this week, with the alcohol performing better than more classic wine investments like Bordeaux First Growths and Burgundy. And even outside the industry, Champagne has been giving the S&P 500 and gold a run for their money.

That’s all according to the Liv-Ex, or the London International Vintners Exchange. Its Champagne 50 index tracks the price performance of vintages from a dozen top brands. In November 2022, Champagne became the third-most-traded region behind Bordeaux and Burgundy, at 18.7 percent (up from just 2 percent a decade ago). And certain vintages have even seen their prices more than triple: A case of the 2012 Salon Le Mesnil went up from $4,670 to $15,485 between January and September 2022—a whopping 232 percent increase.

Liv-Ex’s Robbie Stevens told Bloomberg that people began investing more in Champagne once they realized how undervalued certain types of bubbly were. “One catalyst was the release of the extraordinary 2008 vintage,” he said, “and then the slew of great vintages that have followed—2012, 2013 and 2014.” Climate change may also be contributing to the continued investment, with buyers worried about how global warming will affect the quality and style of future vintages.

Some prices started dropping around November of last year, but industry insiders say not to worry. Tom Gearing, the CEO of the fine-wine investment company Cult Wines, said to Bloomberg that the Champagne market will thrive in 2023 thanks to high demand and strong brand positioning. On top of that, production dwindled in 2021 and 2022, with some Champagne houses running out of supply in the fall. If you can get your hands on those bottles, their rarity and exclusivity make them a good bet.

And at auction, Champagne is doing better than ever. Jamie Ritchie, the worldwide chairman of wine and spirits at Sotheby’s, noted that the amount of Champagne lots in their auctions has been following an upward trajectory. One Hong Kong auction happening in a couple of days will feature 82 lots of rare Krug vintages and 60 of Dom Pérignon, for example.

Given Champagne’s promising outlook, you might want to consider placing a bid.