Investing In Wine - Lessons From 1990 Bordeaux
Spring 1991, the time of Bordeaux's en primeur, or futures market, was a particularly good time to invest in potentially outstanding wine. After the multiple renowned and abundant vintages of the eighties flooded the market, the 1990 vintage was rumored to be troubled. There was the chaos of an economic downturn, and a war involving the United States, home to a large group of consumers of top Bordeaux, was in the works. These factors brought about a subtle reduction in Bordeaux futures prices, with first growths available in the fifty-dollar range. (approximately $90 today)
At the time, I was just determining that I would become a regular wine consumer, and felt an eagerness to experience some of these legendary big names. Nonetheless, the idea of spending $50 for a bottle of wine, much less a case of it, that I would not possess or taste for two years was outlandish. In hindsight, it would have been a worth waiting for. Twenty-four years later, the vintage is considered very good and still going strong. Futures prices have continued to escalate, even though many years have produced lesser rated wines. 2013 futures prices for comparison, with various economic impacts driving prices down, were still four to five times the 1990 vintage's inflation-adjusted prices, for what has been characterized as an "unexciting" vintage.
If I knew then what I know now, I might have recognized the opportunity to acquire a selection of the great names worthy of cellaring, and searched out the best of the second through fifth growth wines that were offered for much less. Maybe I would have accumulated a vast wine portfolio. Or, I could have sat my tastes and expectations at such a level of snobbery that I priced myself out of the joys of regular exploration. I am not an investor when it comes wine. Had I paid the price, I would certainly have drank all of the 1990s well before their estimated primes, and loved every drop. If you were willing to buy and wait on the 1990 Bordeaux, you would now hold a nice asset for your money.
I purchase wine with the intent to drink it relatively soon, becoming impatient with wines I have held for more than a few years. Still, I recommend remaining alert for the opportunity to taste or purchase big deal wines at what you consider to be bargain prices. If you like a wine enough, or the cost is especially tolerable, buy as much as you can afford! Perhaps you can drink now and save for someday. Whichever side of the investment conversation you may be on, the key factor is your enjoyment of the wine experiences you collect.