When thinking about making a profitable investment, wine and whisky aren’t exactly the first things that spring to mind. But did you know that fine wine and whisky have some of the most reliable and consistent growing profit margins of any other market? While stocks and shares see unpredictable highs and lows, wine and whisky have less volatility with potential for remarkable returns.
The landscape of the wine and whisky market is changing dramatically; wine consumption and demand have grown exponentially over the last four decades, and whisky has seen a sudden increase in demand over the last 15 years.
The fine wine and whisky markets have outperformed most global equities and exchange-traded funds (ETFs), showing less volatility than real estate and gold. What’s most appealing about investing in luxury assets like wine and whisky is that they are always in demand regardless of global economic fluctuation and are often the last assets to be placed into liquidation.
Whether you’re new to the world of wine and whisky or an experienced connoisseur, OenoFuture provides a personalised advisory service for both newcomers and accomplished wine and whisky collectors.
Our vision here at Oeno is to make fine wine and whisky investment accessible, regardless of how much you know about the industry.
With wine and whisky investment on the rise, our wish for you is that, with our help, you take the first bold step towards profiting from this lucrative market.
If you’re considering investing in this highly profitable asset class, it’s important to know who you’re investing with and what’s involved. Here are a few pointers to get you started.
Please note that this is NOT intended to be used as financial advice. Past performance is not a definite indicator of future returns.
- Set your financial goals
The first thing to consider before making an investment is your financial goals. Whether you’re saving for retirement, helping grandkids with their studies, or putting a deposit down for your dream home, getting clear about your financial goals will help direct your best course of action. For example, shorter-term investments (1 – 2 years) usually generate lower returns, so it’s a good idea to consider a mix of shorter, medium, or longer-term holds. Some wines and whiskies will be more suitable for shorter-term holds, whereas others will show much greater appreciation over a 5-10 year period. It might be a good idea to trial a shorter-term investment for a year or two before committing to a larger investment for a longer period.
A good question to ask yourself at the beginning of this investment journey is, “how much can I realistically afford?” Wine and whisky is not a short-term investment. You need to be in it for the long game; we’re talking five years, at an absolute minimum.
- Do your industry homework
Knowing the industry well is the best way to ensure your investments are rock solid. It’s important to research the performance of notable distilleries, the market in general and which bottles are most in demand. For those who love wine and whisky, this is probably an exciting prospect, and for those getting involved for investment purposes only, a knowledge of the broader market will help you spot opportunities more confidently and make sensible investments.
For wine and whisky to be labelled “investment grade,” it needs to be of the highest quality, made by the most highly acclaimed producers. Quality is determined by brand recognition, resale value, heritage, critical acclaim and its propensity to age well. As of 2022, investment-grade wine and whisky account for only 1% of annual production.
At OenoFuture, education is the name of the game. Our highly qualified team of incredible wine and whisky experts give masterful advice to help personalise your portfolio and inform you of the optimal opportunities to sell.
- Choose your investor wisely
Before investing your hard-earned cash, make sure you know what you are doing and who you are investing with. Wine investment is an unregulated market, so it’s vital you work with a broker or company that has an excellent track record and reputation. Ask to speak to existing clients, look at the company’s ratings online, and find out where they source their wines and where they’re stored. Trustworthy companies will be happy to answer all of your questions and guide you on which wines to buy to meet your personal financial goals.
If it seems too good to be true, it usually is. Typical annual returns from wine investment are 10-15%, so be wary of anyone promising fantastical returns without any hard evidence.
Not all wines and whisky are investment opportunities. For example, if you want to invest in wine, the most famous investment-grade wines like Domaine de la Romanee-Conti or Sasscaiai can cost thousands of pounds. These “blue chip” wines can show growth of 150 – 200% over a five-year period and are exceptionally popular among collectors. But there are also many undiscovered gems from emerging wineries, such as the USA, Chile, Argentina and Australia. The key is to look for lesser-known wineries with a growing reputation and increasing demand – these are the up-and-coming superstars of the wine world.
At OenoFuture, we specialise in advising our clients on which wines and whisky have a bright future so you can see your investment grow and prosper in the coming years. Our regular tasting events and wine tours are perfect for those wishing to expand their wine and whisky knowledge and develop a deeper understanding of their portfolio. These events are also great opportunities to meet other passionate fine wine and whisky lovers.
- Be aware of risks/watch out for fakes
As scammers see the demand for rare bottles of wine and whiskey rise, fake bottles are becoming increasingly widespread. According to the world’s leading experts on wine fraud, there is currently around $4bn worth of counterfeit wine worldwide.
Keeping track of the industry is paramount, and always seek a second opinion on particularly rare expressions.
Oeno are one of the only wine and whisky investment firms to provide a “perfect stock promise” to protect our investors from the increasing number of counterfeit bottles in the market.
Oeno’s first in-house anti-fraud unit works tirelessly to mitigate risk by implementing a comprehensive assessment process using techniques employed by leading fraud experts across the globe. Glass, capsule, cork and labels are checked against a database using state-of-the-art electron microscopes and professional-grade UV lights.
Following this rigorous assessment process, bottles issued with the OenoFuture certification are stamped with a unique label to prove authenticity. Here at Oeno, we are meticulous in our approach to protecting clients’ portfolios, so they can feel reassured that they’re in safe hands.
- Keep your exit options open
When considering investing in wine and whisky, you must have a solid and profitable exit strategy.
At Oeno, we offer clients several exit strategies to ensure they enjoy a healthy profit when it’s time to sell their wine and whisky. We have both retail and investment arms, enabling us to offer our clients a wide range of options; these range from selling the cask at auction or to a private buyer to clients bottling the casks themselves or choosing to sell via our many retail avenues.
One unique option is to sell your wines directly to our network of Michelin-starred restaurants and top hotels and bars. We also offer the option to sell your wines directly to consumers through our OenoHouse wine shop and bar in one of London’s grandest, most iconic buildings, the Royal exchange.
We have an extensive trade network, including some of Europe’s finest restaurant and hotel chains. We have excellent relationships with some of the best auction houses in Europe and sell directly to them at a discounted fee. We also use the famous global marketplace for wine trading, Liv-ex, to sell directly to our consumer and collector database.
- Secure storage
As with any collectable asset, efficient storage is essential for peak-quality maintenance. For bottles bought solely for investment purposes, the bottle shouldn’t be opened under any circumstances as this will drastically decrease the value.
Fine wines must be nurtured and stored in optimum conditions to develop and evolve to their full potential. Whisky and wine bottles should be stored upright to avoid contact between the cork and the liquid inside.
Clients who purchase “in bond” can rest assured that their bottles are kept in a carefully controlled storage unit – London City Bond (LCB) – to ensure optimum ageing conditions. Wines and whiskies that are sold in bond must be stored in authorised warehouses where optimum conditions are guaranteed. This makes wines and whisky more attractive to potential buyers when you decide to sell. Excise duty and sales taxes only become payable when wines and whisky are withdrawn for consumption or sale through OenoTrade or OenoHouse.
- Be patient
Investing in wine and whisky is not for those wanting a quick sale. As with all investments, whiskey and wine are all about timing. For the best returns, you need to wait at least five years.
Keeping a close eye on the market and tracking the distillery performance and latest releases will help you identify new opportunities. Predicting which distilleries will be popular in the future and knowing the ideal time to shift a rare collectable can make or break an investor.
The team at Oeno are here to provide expert advice to help you avoid the common pitfalls in the market, recommend the most exceptional selection of wines and whisky to invest in, inform you of the best times to sell and make sure your investment journey is an easy, enjoyable and profitable one.
If you are looking for excellent returns, portfolio diversification and tax-free gains, we truly believe there is no better investment for you.
