Italian & US Wines Flourish: Liv-ex 2021 Classification

02/09/2021

Global wine trading platform Liv-ex has just published their 2021 Classification which provides an bi-annual ranking of the top performing wines on the secondary market. For investors it’s a useful snapshot of how the fine wine market is moving and emerging opportunities in undervalued regions or producers. 

According to Liv-ex, the Classification takes inspiration from “the 1855 Classification in Bordeaux, which ordered the wines from top estates from fifth to first growths using their market price”. The criteria for inclusion on the list includes number of vintages traded, market activity, and as well as price. This approach ensures consistency across the Classification since “one vintage of one very rare label, trading just once for a very great price alone is not enough to secure a place in the classification”.

Notable wines in this year’s Classification include Tignanello, the best performing Super Tuscan over 2020 with an average trade price of £992 per case of 12 up 29% from £769 in 2019. Overall Tignanello is the ninth-most traded wine by volume across the fine wine market. Compared with fellow Super Tuscans Masseto (average price of over £5000) and Sassicaia (£1936 average), Tignanello certainly looks like an interesting investment option for Italian wine lovers. 

California also continues to perform well, achieving a market share of 7% to date in 2021. According to  Liv-ex’s 2021 California Report, the region’s top wines now command the highest prices across the whole market after red Burgundy. The Liv-ex California 50 index is a great measure of this consistent growth, showing 38% appreciation over the last 5 years and a new all-time high in July 2021.

This year a total of eight different countries feature on the Liv-ex league table, with especially strong growth from Italy and the United States. Interestingly, up until 2017 the Classification only included Bordeaux wines before being widened to include fine wine producers from any part of the globe. 

This reflects a general market broadening as Bordeaux’s market share continues to decline from 95% in 2010 to just 42% in 2020. Key drivers are the overall growth of the fine wine market, especially in developing markets in parts of Asia and South America, as well as strong performance by regions like Burgundy, Italy, Champagne and the New World.

Despite an overall decline for the region, Bordeaux did field several brand-new entrants to the 2021 Classification which suggest diversification is occurring within the region as well. Two of the new entrants are the Right Bank estates Feytit-Clinet and La Gaffelière. Feytit-Clinet is described by Liv-ex as “one of the more affordable entry points into Pomerol, one of the most expensive Bordeaux appellations”. 

Not far away geographically is La Gaffelière, “the fourth most-traded St-Emilion grand cru by value so far this year and third most-traded by volume”. Of particular interest is the 2018 vintage which was given 99 points by Italian wine critic Antoni Galloni. Pricing has increased by 20% over the past year to a current average market price of £660 per case of 12.

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