Mixed Direction for Fine Wine Market

March Sees a 0.18% Dip in Fine Wine Market Due to Heightened Buyer Selectivity Italian Wines and Champagne Soar Amid Varied Regional Performance  

LONDON (APRIL 4, 2023) – Cult Wines, the company actively redefining the fine wine market, reports fine wine markets edged lower in March, as evidenced by the performance of the Cult Wines Global Index. The index, which tracks the performance of a broad range of fine wines from around the world, reflects a choppy start to 2023 following a long rally throughout 2021-2022. After a January decline (-0.98%), wine prices rebounded with a strong February (+0.70%) before sliding back again slightly in March (-0.18%) 

Fine Wine Market Snapshot 

The fluctuating performance of the fine wine market is likely due to increased buyer selectivity as investors gauge the sustainability of price rises over the past few years. This suggests that relative value across regions and individual producers is playing a greater role, with regional drops often quickly followed by a rebound and vice versa. Regional performance in March reflected this mixed direction, with some regions such as Champagne and Italy experiencing healthy gains while others declined, often in a reversal of their performance in February. 

Source: Investing.com, Wine-Searcher as of 31 Mar 2023. Past performance is not indicative of future returns.    

*Volatility = Rolling 5-year standard deviation of monthly returns 

Macro Market Snapshot 

In March, financial market volatility resurged due to concerns over a potential banking crisis following the failure of Silicon Valley Bank and another US regional bank. Global equities and risk assets plunged, while bond markets rallied as investors sought safety. By month’s end, markets stabilized and equities recovered, supported by easing US inflation rates and hopes that the Federal Reserve might pause its tightening cycle. The British pound gained against the US dollar, driven by expectations of Fed easing and stronger-than-expected UK economic data, which may help avoid a technical recession. However, the banking sector turmoil and increased year-on-year inflation in February caused UK stocks to underperform. 

Cult Wines Global Index Performance Figures – Returns as of 31 March 2023 

Source: Pricing data as of 31 Mar 2023. Cult Wines Indices are an objective measure of the global fine wine market based on Wine-Searcher pricing data and rebalanced annually based on strict liquidity criteria. Prices calculated in GBP and results may vary in other currencies. Past performance is not a guarantee of future results. 

Italian Wines Lead the Way as Fine Wine Market Highlights Diverse Performance in March 

Italian wines displayed a positive trajectory, with the Cult Wines Italy Index noting the largest monthly gain in March, at 0.40%. Offering superb relative value compared to their French counterparts, Italian wines stand to benefit as buyers seek value amid mixed economic conditions. Increased interest in recent Super Tuscan and Piedmont releases led to the repricing of back vintages, with the Tignanello 2007 emerging as the top March performer, boasting a 34.7% increase. The 2015 Giuseppe Mascarello e Figlio Monprivato, Barolo contributed an impressive 26.8% jump.  

The Cult Wines Champagne Index rebounded from January and February’s declines, posting a modest 0.39% gain in March. Aided by strong demand for scarce back vintage Champagnes, the 1997 Cristal and the 2002 Ruinart Blanc de Blancs led the recovery with respective gains of 22.5% and 17.4%. 

Conversely, the Cult Wines Bordeaux Index declined by 0.49% in March, following February’s strong 0.45% gain. This drop could be attributed to profit-taking and cash liquidation in anticipation of the 2022 En Primeur campaign, expected to feature an exceptional vintage. 

Burgundy experienced price fluctuations, with the Cult Wines Burgundy Index declining by 0.22% in March after February’s 0.99% gain. Domaine Drouhin Laroze produced both the best (2007 Chambertin-Clos de Beze Grand Cru, +39.1%) and worst (2013 Chapelle-Chambertin Grand Cru, -19.9%) performing wines of the month, further highlighting the market’s focus on relative value opportunities rather than a decline in overall demand. 

The Cult Wines USA Index fell (-0.43%) in March, as prices adjusted following February’s 1.48% surge. The strong British pound against the US dollar may have also contributed to this decline. A larger portion of US wine prices will be denominated in USD, resulting in lower figures when GBP strengthens since the Cult Wines Indices are denominated in GBP. The weaker dollar may have also influenced the Cult Wines Rhone Index’s March drop, as Rhone wines traditionally hold a strong presence in the North American market. 

March’s varied performance across wine regions underscores the intricacies of the fine wine market. Despite some regions facing declines, select wines within these areas still achieved robust returns, emphasizing the significance of a diversified wine investment approach. 

2023 Wine Performance League Table – YTD Return % Across Vintages  

Source: Pricing data from Wine-Searcher as of 31 Mar 2023. Based on average across all vintages of wines contained in Cult Wines Indices, which are rebalanced regularly based on strict, objective liquidity criteria. Prices calculated in GBP and results may vary in other currencies. Past performance is not a guarantee of future results. 

Relative Value Opportunities Shine as Top Performers Span Rioja, Tuscan, and Champagne Wines  

In the current market, a focus on relative value opportunities is proving fruitful, as several exceptional, well-priced wines consistently rank among the best year-to-date performers. Artadi Pagos Viejos leads the pack after one quarter (YTD 30.4%), while Remirez de Ganuza Reserva also continues to appreciate, showcasing the potential of Rioja wines. 

Guidalberto, a Tuscan Merlot-based wine from Tenuta San Guido, narrowed the gap in March, rising two spots from the previous month. Bolstered by the recent release of the high-quality 2021 vintage, Guidalberto is gaining recognition as a serious, age-worthy wine, rather than merely a second label to Sassicaia. 

Emerging names aren’t the only driving forces in the 2023 market. Amid the region’s rebound, three Champagnes entered the top 10 in March. The persistent supply-demand imbalance for vintage Champagne underscores the strong market fundamentals, as evidenced by the remarkable YTD performance of Laurent Perrier’s Brut Millesime (24.6%) and Billecart-Salmon, Vintage (22.6%) wines. 

A noteworthy addition to the list is Cullen’s Diana Madeline, securing the number 5 spot. This Bordeaux-blend from Margaret River has witnessed steadily improving critic scores over the past decade. 

The Cult Wines Global Index can be viewed on CultX.com, the next generation digital trading platform at CultX.com/indices. 

ABOUT THE CULT WINES GLOBAL INDEX 

The Cult Wines Global Index forms a benchmark measurement of the global fine wine market performance. Powered by Wine-Searcher, the world’s most extensive source of powerful wine pricing data, the Index is comprised of a dynamic set of wines that represents the most sought-after, tradeable fine wines in the market based on strict liquidity criteria. The Global Index is comprised of the following regions – Bordeaux, Burgundy, Champagne, Rhone, Italy, USA and Rest of World, providing a comprehensive world view of the tradeable fine wine market. 

ABOUT CULT WINES 

Founded in 2007, Cult Wines is forging the future foundations of the fine wine market by creating products and experiences that unlock opportunities for producers and consumers. Empowering people through technology, data and access to a global community, Cult Wines endeavours to re-define the fine wine market – making it accessible, secure and rewarding. Headquartered in the UK, Cult Wines has offices in Canada, China, Hong Kong, Singapore, Dubai and the US. For more information, please visit www.cultwines.com/ or find us on LinkedIn, Twitter, Facebook, or Instagram.