The wine collecting experience
Wine has been around since at least 6,000 B.C., and people have been stocking up for no less than 3,700 years. Modern-day wine collecting has been well-established for decades, but the pastime has been evolving. In recent years, a fresh crop of collectors has entered the scene, many from younger generations. They’re not only driven by a passion for wine and the pursuit of an investment opportunity, but also by an upswell in innovative offerings that have made wine collecting more experiential.
The changing face of wine collecting
In recent years, a stream of new collectors has entered the market for amassing valuable wines. Multiple forces are driving the uptick in interest. Millennial and Gen Z collectors are entering the market, and a surge in online wine sales has made it easier for collectors anywhere to purchase bottles. High-net-worth individuals are increasingly seeing wine as an attractive alternative asset class in an uncertain economy. According to the 2023 Knight Frank Luxury Investment Index, the annual average value of wine increased by 5% over the past year and 149% over the past decade. Wine futures — which allow people to invest in vintages before they’ve been bottled — are growing in popularity, and platforms offering fractional shares are democratizing access to this investment opportunity. Not to be underestimated is another trend energising the wine market: the growth of an experiential component to collecting.
Wine as experience
Oenophiles are no longer limited to stashing bottles in hidden cellars and enjoying them at home. Collectors now have access to a wealth of experiences that bring new flair to the process of selecting, storing, and savouring their wines. Wine lovers are looking for new ways to explore their passion and connect with each other in person. As Millennial and Gen Z collectors enter the scene, they're bringing their appetite for experiences with them. Winemakers and cellars are finding that unique experiences can boost engagement and brand loyalty.
In recent years, venues have sprung up around the country offering memberships that allow enthusiasts to not only keep wine in a tailor-made environment, but also access communal spaces to host tastings and engage with fellow collectors. Cellars are starting to offer 24/7 access to a private wine locker, a web app for tracking inventory, personalised recommendations from a concierge, and access to entertainment spaces.
Wineries around the world are also making tastings and tours more experiential, such as offering a Chilean tasting and pairing each glass with music that evoked its mood and flavours. Some wineries even offer scuba diving tours of their cellars in the sea that have been built to take advantage of storage conditions underwater. Other operators combine wine tasting with spelunking, kayaking, hiking, biking and snowshoeing.
Protecting your collection
Whether enthusiasts see wine primarily as a passion, investment or experience, they want to keep their fragile collections safe. It’s no wonder when a single bottle can be worth $100,000 or represent decades of aging. Here are steps that new and seasoned collectors can take to protect their bottles:
- Implement safety measures
Water leaks or floods, power outages and mechanical breakdowns are the most common causes of damage to wine collections, which are often stored at or below ground level. An increase in extreme weather events is making these outcomes more likely. To reduce the risk of water damage, avoid building wine cellars near bathrooms, kitchens or laundry areas; store bottles in racks off the floor; and install a flow-based water leak detection system tied to a central alarm, as well as point-of-leak sensors in the cellar. Temperature and humidity sensors, also tied to an app or central alarm, can alert you to mechanical issues. A backup generator helps ensure climate control systems can remain operational to maintain climate conditions if the power goes out. Make a plan for emergencies, which can include moving wine in a refrigerated truck to a vetted storage facility. If you store bottles off-site, ensure that the facility also has solid precautions in place, including a backup generator and emergency preparedness plan.
- Get the right insurance
A standard homeowner’s policy isn’t typically robust enough to safeguard a significant wine collection. Instead, collectors should opt for a valuable articles policy that provides worldwide coverage if bottles are damaged due to accidents, during shipping, in off-site storage or spoilage resulting from failure of climate control equipment due to power outages or mechanical breakdowns. These policies usually don’t have deductibles or spoilage sub limits and cover a broader range of perils, including breakage, fire, theft or water damage. With an itemised policy, there’s often automatic coverage for newly acquired bottles and inflation protection to account for escalating markets. Ensure that you’re regularly getting collections appraised, so that policies reflect current value rather than purchase price. Work with an insurance broker with expertise in high-value collections.
- Do your due diligence
Fakes abound in the wine market, and the risk of getting conned has increased with the growth of online sales and advances in technology. Online purchases of counterfeit wine and other items grew substantially in the first 10 months of the pandemic, according to the Journal of Financial Crime. In some cases, unscrupulous sellers may even knowingly offer spoiled bottles at auction. Buyers often don’t realize they bought a fake or subpar bottle until they open it years later; by then, it’s hard to prove that their own storage conditions weren’t to blame. To avoid these outcomes, only purchase from reputable sellers, and ask for documentation of prior ownership and sales history. Note any visible issues that suggest poor storage conditions, such as premature colour changes from overheating, damaged wine labels or a fill level that doesn’t match the age of the bottle. Modern winemakers are introducing tools to prevent fraud, such as special seals and embossed labels. Keep in mind that approximately 10% of all wine produced in the world is age-worthy, and only a small fraction of these would be considered collectible. Even wines that fit both descriptions have an optimal drinking window. If you’re new to the market, working with a trusted wine advisor or consultant can help you make smart acquisitions.
- Prevent theft
If a Picasso disappeared from your wall, you’d notice — it’s much easier for a valuable bottle of wine to go missing. Collections are often stored in isolated basement cellars or off-site facilities, where they’re hard to track. In one fascinating case, thieves entered the Paris Catacombs and drilled through a limestone wall to steal around $300,000-worth of wine from a private collector. In another, an employee at a facility looted nearly $3 million-worth of wine by replacing expensive bottles of first-growth Bordeaux with Two Buck Chuck. Consistently track inventory, either manually or through an app. Conduct background checks on employees who regularly enter your home, and implement security measures, such as cameras and alarms; ensure that off-site cellars do the same.
Wine collecting is seeing an influx of fresh faces, driven by a love of wine, an appealing investment and the rise of experiences that add a dose of entertainment and bring collectors together. Wine collecting can be a highly enjoyable pastime, but it also comes with unique risks. By buying well-documented vintages from reputable sources, taking precautions to prevent theft and damage and taking out the right insurance policy, new and experienced collectors can keep their bottles safe and valuable for the long term.
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