Wine Investment Friday

This newsletter is designed to bridge the gap between trade and the investor. Each week we aim to help investors better understand the nuances of why some cases appreciate and some standstill. We will unpick the characteristics that construct financial potential to help your money work smarter. 


This week we are analysing a case of:

Haut Brion Blanc, 2019


Exploring why investing in this wine successfully, requires extremely specific quality parameters and a good measure of patience. 


Beneath the Label: 

Haut Brion is the oldest continuously working Estate in Bordeaux, with vines present on the estate as far back as 1426. Famous for their incredible first-growth red wine, the estate’s white is often passed by. However, for those in the know, this age-worthy combination of Semillon and Sauvignon blanc is the greatest dry white wine of Bordeaux.

Critic Score: 96 – 98+ Points – Wine Advocate
The wine will have the exact score confirmed once in the bottle but barrel tastings appear to show real promise. 

Region Rating: Pessac Leognan – est. 96T
The vintage has been compared with both ’18 and ’15. Both incredibly well thought of and future classics. 

Drinking Window: 2022 – 2050
These wines age for decades with the development of the taste absolutely incredible and unique.  

Production Volume: 650 cases
A small total production by any regions standard, ensuring that this could be considered rare from release. 

Summary:
Haut Brion’s white boasts a range of highly attractive vectors that show this case to be both extremely high quality and rare. A perfect combination that usually bodes well for a wine investment. It is however very pertinent to consider the utterly unique flavour profile this wine holds and how this could impact its market appeal. White Bordeaux’s flavour is distinct from the more familiar white Burgundian or new world flavour profiles and this is further exaggerated with age. So perhaps while the case count is low at 650, this is counteracted by a smaller pool of potentially interested parties. 


“Exquisite, a full throttle wine to drink over the next 30 years. Utterly Profound”

Parker


Money Matters:

Brand Power: 92/100, rank 15th in JF Tobias Brand Power Metric
Heralding from the Haut Brion stable certainly helps this iteration to be recognised and revered around the world. The name instills confidence and trust in the quality of the wine.

Liquidity: 20%
This is the key issue with this investment. This wine demands an extremely high case price, especially once aged. Combine this with a unique flavour profile and you are left with a very small pool of motivated buyers.

Inter-Trade Price Volatility: n/a
There is not yet enough data to draw too many conclusions, however historically this wine is very stable in the early years with an acceleration 5 years post-release.

Price History: 

Summary:
The financial characteristics of this wine are strikingly similar to many of the blue chip picks we have reviewed in this newsletter. A high sticker price, strong brand backing and a history of stable pricing. Where we see major divergence is within the liquidity. With such a vast difference here we can infer that exit timelines will need to be extremely generous and price action moving in dramatic but infrequent fits and starts.


Position for Profit: 

We can deduce from the information above that in many ways this wine should be treated like a Blue-chip red Bordeaux. You should only be considering top-scoring iterations, investing in genuine quality and recognising that this is a longer-term investment, for a minimum of 10 years.
With regards to the potential price action, much like the Blue-chip reds, the key driver for the price is going to be absolute scarcity. Despite the far smaller total production, this rate is unlikely to be any faster than that of the reds due to the small pool of buyer. So expect to have to carry the wines some distance.
The key distinction that should be made is on entry timing. With the red’s it is unlikely that you will be offered a better entry point than at E.P. In the first 3 years, prices for the reds tend to trend upward as collectors and investors vie for volumes. The Haut Brion Blanc however appears to show stable but stagnant pricing for the first 5 years. Prices even of the very best iterations cavitate around the release level and it is only after 5 years that we see significant growth. This would suggest that buying on release is unnecessary. It would be far safer to wait for the in bottle score to be confirmed, then to acquire after roughly 3 years before the price uptick begins. Thereby avoiding both a down score from barrel to bottle and your capital sitting still in a stagnant asset. 
You will eventually be rewarded for your patience. 10+ year aged Haut Brion Blanc from the very best vintages fetches over £10-12,000 per 12*75. Just remember getting out of the position may take some time!

The Author

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Jake Leighton