- 5 mins
There is a plethora of asset classes out there from stocks, crypto, and real estate so I bet when you hear about fine wine being another asset class to add on the list you probably wondering "what is so special about it other it being a good pairing with my steak or fish".
In the article below we highlight fine wine as an asset class, the benefits, the risks and everything else you would need to know before investing in it.
What is Wine Investment?
Wine investment is the practice of buying specific bottles or cases of wine with the expectation that their market value will rise over time. Although wine is a consumable, investment-grade bottles are typically stored and traded as tangible assets rather than consumed, with the goal of selling them later for financial gain.
Why Invest in Wine?
• Potential for appreciation: Fine wines have delivered strong long-term returns in many studies (some analyses show average annual growth in top-tier indices in the high single digits over the last decade), but the market is cyclical and has softened since the 2022 peak. Recent index data shows retracement in 2024–2025 even while longer-term performance remains positive. Cru Wine Fine Wine & Spirits Merchant+1
• Portfolio diversification: Wine often behaves differently to stocks and bonds and can provide diversification benefits inside a broader alternative-asset sleeve for private portfolios and collectors. knightfrank.com
• Tangible asset: Unlike stocks or bonds, wine is a physical commodity you can store and inspect — a feature some investors value for psychological and practical reasons (storage, provenance and condition are meaningful).
Key Factors in Wine Investment
• Producer reputation: Established, renowned wineries often produce investment-grade wines.
• Vintage: The year the grapes were harvested can significantly impact a wine's value.
• Region: Certain regions, like Bordeaux and Burgundy, are historically dominant in investment-grade markets.
• Critics' scores: High ratings from respected critics and publications can boost secondary-market demand.
• Rarity: As bottles are consumed and unopened stock is limited, scarcity can support higher prices — but trends in demand and trade activity matter too. Liv-ex
Understanding the Risks
• Market volatility: Wine prices can and do fluctuate — the fine-wine indices fell from their 2022 highs and saw softening through 2024–2025, demonstrating market cycles and liquidity shifts. Liv-ex+1
• Authenticity concerns: Counterfeiting and provenance problems exist in the fine wine market; vetting provenance and buying from reputable channels is critical.
• Liquidity: Selling wine investments may take time and can depend on market appetite, the specific label/vintage, and the sales channel.
• Storage costs: Professional storage, insurance and handling incur ongoing fees that reduce net returns.
Getting Started
• Educate yourself: Learn about wine regions, producers, and market trends through reputable sources and market reports (e.g., Liv-Ex, Knight Frank, Wine Market Journal, auction houses). Liv-ex+1
• Assess your risk tolerance: Understand that wine investment, like any investment, carries risks and may require a multi-year horizon.
• Start with what you can afford: Begin with a comfortable investment amount; you can always expand later.
• Use reputable channels: Work with trusted merchants, brokers, or platforms and insist on documented provenance, professional storage and insurance.
Disclaimer — Important (read carefully)
Investing in wine carries material risks. Past performance of wine indices or individual bottles is not a guarantee of future returns. Before investing, conduct your own due diligence, verify provenance, understand the total cost of ownership, and consider consulting a licensed financial advisor and wine-market specialist. Only invest amounts you can afford to have tied up for several years, and never treat wine investment as a guaranteed or short-term way to achieve returns.
