Liv-ex 1000 shows that interest in wines from Burgundy, Champagne, the Rhône, Italy, and US has grown rapidly and unexpectedly

New categories of wine are entering the secondary wine market for the first time, with trading up by 70% from 2019.

Bordeaux, which once dominated the secondary market, now has a share of trade less than half of what it was a decade ago. But it hasn’t fallen out of favour – rather, its share has shrunk as the overall market has surged and interest in wines from Burgundy, Champagne, the Rhône, Italy and the US has grown rapidly.

“Last year was a positive year for the wine market, with all major Liv-ex indices showing gains,” said Liv-ex Director and Co-Founder, Justin Gibbs.

Liv-ex (the London International Vintners Exchange) is the London-based global marketplace for the wine trade, where fine wine merchants from around the world buy and sell wine. What happens on the exchange is a reliable indicator of the health of the secondary wine market.

And what it shows is that the secondary wine market is not just booming, it’s broadening.

Fast Market Growth

The number of distinct wine brands traded on Liv-ex last year was up 70%, from 996 in 2019 to 1,420. The total number of wines – including different vintages of the same wine brands – was 8,735, up 72% from the 2019’s 6,367.

The surge has continued into 2021, with March 2021 closing on the biggest month of trade in Liv-ex’s 21-year history – 1,250 distinct wine brands were traded, of which 130 were newcomers to the secondary market. More than £80 million ($109 million) of live bids and offers, are currently available on the market.

The Liv-ex 1000 index was established in 2014 to capture this broadening. As with all Liv-ex indices, it reflects the activity of e Liv-ex membership – a pool of over 500 of the world’s leading wine merchants, who between them represent the biggest and deepest pool of liquidity anywhere in the world.

Most importantly, as a trading and data resource, it is completely independent. And it shows stark changes in the fine wine market, as new wines enter the secondary market.

One Index Alone Is Up 87%

The most striking example of the changing dynamics of the market is the Burgundy 150. It has risen 87% over the last five years, the beneficiary of collectors putting their capital into a new category.

The Champagne 50 has risen 58% over the last five years, driven by the brand power and prestige of the grandes marques Champagnes, widely available stock, global distribution and accessible price points.

The Italy 100 has risen 45% over the past five years, as merchants and collectors discover the relative value to be found in the great wines of Piedmont and Tuscany.

The Rest of the World 60 – which includes the top wines of California, as well as Australian, Spanish and Portuguese wines – has risen 31% over five years. US wines, in particular, are attracting attention; in 2019, US wines represented just 2% of trade by value on the market. That shot up to 7% of total trade last year.

What’s Driving the Trading?

As elsewhere in the economy, technological innovations have swept through the wine industry, transforming the behaviour of both wine businesses and buyers. This past year has seen the launch of new wine tech start-ups, digital wine apps, soaring online sales and virtual tastings, ensuring that people are no longer anxious about buying or trading online.

“These innovations in technology have had a significant impact on buying patterns,” said Gibbs. “As more of the wine trade go digital – with many enabling their customers to access the market using our Automation services – we are seeing increasing diversity in what is traded as collectors are put in the driving seat.”

As a result, the wines brought through Liv-ex in 2020 not only came from the more traditional fine wine regions like Bordeaux and Burgundy, but also from China, Hungary, Switzerland, Austria, Germany, Chile, Argentina and more. Prices per bottle also ranged from £4 to £21,000. As the wine world becomes increasingly digital, this broadening trend is likely continue.

The Market Set to Expand Further

Since 2019, US collectors and merchants have been constrained by the US government’s tariffs on the wines of France, including Bordeaux and Burgundy.

“The tariffs have had a singular effect on the fine wine market over the last 18 months, not least for Italy and Champagne whose wines were excluded from the extra 25% levy,” said Gibbs.

But the recent lifting of the tariffs has had a marked effect on activity – leading to a strong kick in demand for wines of all regions.

There are also other reasons to believe the fine wine market will both grow and diversify further.

“The combination of low interest rates and massive fiscal spending suggests that asset inflation will not be confined to equity, commodity and property markets,” said Gibbs. “The fundamentals of fine wine will also be an attractive option to those with cash to spare.”

#livex1000 #livex #finewine #burgundy #champagne #bordeaux #Rhone #USwine #winenews #instawine #winelovers #winecollectors #wineinvestment #digitalmarketing #finewineregions

 

 

 

The Union des Grands Crus de Bordeaux announces 10 cities to host “en primeur” tastings [April 26-29]

The Union des Grands Crus de Bordeaux has announced that this year’s en primeur tastings will be held in 10 cities worldwide (which includes Bordeaux) from April 26-29.

The Union des Grands Crus de Bordeaux has said that Bordeaux, New York, San Francisco, London, Paris, Brussels, Zurich, Frankfurt, Shanghai and Hong Kong will be the host cities for this year’s campaign.

As noted on their website, tastings will be held from 26-29 April in Bordeaux, with further tastings held around the world on the following timetable:

26 April: Zurich and Shanghai
26-27 April: Brussels
27 April: Frankfurt and Hong Kong
27-28 April: Paris, London, San Francisco and New York

Dedicated venues in each city will be chosen where professionals will be able to taste the 2020 wines from the UGCB’s 131-member estates, in accordance with local health regulations.

The UGCB’s president, Ronan Laborde, said: “We are incredibly committed to maintaining ties with our clients and ambassadors. Despite the restrictions in place, we will do everything in our power to ensure they can enjoy the Bordeaux 2020 vintage.”

The new dates for this year’s campaign were confirmed earlier in the year but the UGCB at the time remained unsure if it would be able to hold the annual tasting solely in Bordeaux. It mentioned that its fall-back option would be to hold the tasting in cities around the world, building and improving upon the system of sending out samples that it rushed into place last spring.

#bordeaux #redwine #winetasting #enprimeur #bordeauxwine #instawine #frenchwine #vin #sommelier #finewine #vinsdebordeaux

The INAO approved six new grape varieties in Bordeaux

The Institut National de l’Origine et de la Qualité (INAO) has officially approved the use of six new varieties in Bordeaux, which were first proposed in 2019.

The French agricultural governing body has approved the use of four new red varieties, as follows: Arinarnoa, Castets, Marselan and Touriga Nacional, and two white varieties: Alvarinho and Liliorila; with plantings authorized for 2021.

The varieties were put forward by winemakers in the Bordeaux and Bordeaux Supérieur AOCs (not Pauillac and Margaux ) in the summer of 2019, as a potential means of dealing with different growth cycles and ripening periods, in the face of a changing climate.

Scientists in Bordeaux looked at fifty-two varieties for potential future use before settling on the final six which were considered particularly suitable for their ability to handle hydric stress and for being later ripening.

When plantings begin, the new varieties will be limited to just 5% of an estate’s total surface area and no more than 10% of the blend in either red or white.

These new varieties will sit alongside the already permitted varieties: Cabernet Sauvignon, Cabernet Franc, Merlot, Malbec, Carménère, Petit Verdot for red – and Sémillon, Sauvignon Blanc, Sauvignon Gris, Muscadelle, Colombard, Ugni Blanc, Merlot Blanc and Mauzac for white.

Christmas Wine: Chateau Palmer 2001

Christmas Wine: Chateau Palmer 2001

Margaux, France
Merlot 44% Cabernet Sauvignon 51% Petit Verdot 5%

Tasting Notes:
Stunning deep ruby; introverted nose at first instance and slowly opens up revealing various wood and spice aromas  with hints of ripe black fruits and mocha; on the palate the fruit is exquisite, with hints of herbs and tobacco, the tanks are subtle; good structure, well balanced and mellow long finish.

[decanted 2 hours before]

Ready to drink but still can keep for a few more years

93 points

#wine #redwine #bordeaux #bordeauxwine

#chateaupalmer #christmaswine #investmentwine #wineinvestment

#wineinvestor #christmas #womeninwinetalks #womeninwine

Why has confidence in fine wine increased in 2020?

Despite the headwinds of 2020 – tariffs, Brexit uncertainty and the global pandemic – the wine market has remained robust. Today’s post examines what has changed and offers an explanation as to why we are seeing greater confidence in the market during these exceptional times.

Increased liquidity

One of the key changes this year is an increase in market liquidity, which is reflected in the rising value of bids and offers on the Liv-ex marketplace. The total exposure (total value of bids and offers) reached a new record high of £81 million last week – a £30 million increase this time last year.

In recent months, both bids and offers have been on the rise. The bid to offer ratio (i.e. the total value of bids divided by the total value of offers) currently stands at 0.6. Traditionally, a bid-offer ratio of 0.5 or higher suggests positive sentiment.

A broadening market

Another noticeable difference is that more wines than ever are attracting buying interest, taking market share from the traditional strongholds of Bordeaux and Burgundy. As the chart below shows, the wine market has undergone considerable broadening in the past decade. Bordeaux’s share has halved from its peak in 2010 when it accounted for 95.7% of secondary market trade by value. As its share declined, others shined. Burgundy was the first and main benefactor; its trade share rising from 0.6% in 2010, to a record high of 19.7% in 2019. It has dipped slightly this year to 17.4%.

This year, Italy has been the big winner. Having reached an annual average of 8.8% in 2019, Italy now accounts for 15.3% of fine wine trade. As recently highlighted, the US wine market is also developing at unprecedented rate. USA accounted for just 0.1% of trade in 2010. Year-to-date, it stands at 7%.

And then, there is the Rest of the World – an increasingly diverse category. Up from 0.8% in 2010 to 5.9% in 2020, RoW trade so far in 2020 has been led by trade for Australia (1.8%), Spain (1.4%) and Germany (1%), though wines from Argentina, Austria, Chile, and Portugal to name but a few are seeing more and more activity.

What has changed?

So, why are we seeing such increased confidence in the wine market? One well-documented explanation is that investors are seeking to put their money into safer assets in these uncertain times. Historically, fine wine has offered steady returns and low volatility.  Another explanation is that there are simply more market participants than ever before. The number of wine businesses trading on Liv-ex has increased 15% in 2020 alone. This increase in members reflects a growing trend since the Covid-19 pandemic took hold – businesses are looking for web-based solutions to grow their sales.

One such solution is trading automation. Trading automation makes it easier for merchants to list stock for sale, exposing their diverse inventory to an ever-growing marketplace. Regions that once struggled to find a secondary market have been benefitting from the shift to online sales, particularly as lockdowns have closed much of the physical retail. Through APIs, stockholders have been able to list and advertise various wines to a far greater audience, as merchants have connected their customers to this ever-broadening market. Subsequently, wine merchants and private collectors have been able to find less well-known wines from a greater range of wine regions.

Despite an early swoon as the first lockdown took place, the fine wine market would seem to be in a relatively healthy place today. As a tangible, finite asset, it offers stability in a volatile world. It also of course offers a great deal of pleasure for imbibers who are locked down and deprived of their usual wining and dining! And importantly technology, as in so many sectors, has helped merchants from across the globe, to adapt, making wine more accessible and more exciting to all with an interest in it. Combined, these three things have put the wine market on a firm footing in 2020.

Source: Liv-ex