Investing in Champagne: spotlight on prospects

Top blends hit the mark

Champagne’s recent fine wine market performance, backed by an exciting run of releases, has thrust the region further into the spotlight. A select band of vintage prestige cuvées at the very top end of the market have been firmly in the sights of savvy collectors.

UK merchant Goedhuis & Co said in its Q1 2021 fine wine market report that Champagne ‘has been on a quiet bull-run for the past five years’.

Investing in Champagne – prestige cuvées

Attention has focused on releases from the lauded 2008 vintage, which has been described by some as a worthy successor to the vaunted 2002. But prestige cuvées from the class of 2012 have generated particular excitement, too.

There have been several market debuts at the top end of the market so far in 2021, including Louis Roederer Cristal 2013, Bollinger RD 2007 and Pol Roger’s Sir Winston Churchill 2012.

The Liv-ex Champagne 50 index outperformed all other regions in the year to 31 May, rising in value by 13.2%. It was up by 60% over five years.

Of the names tracked in the index, Dom Pérignon, Salon Le Mesnil and Taittinger Comtes de Champagne have shown particularly strong growth, according to Liv-ex. However, some market data suggests price momentum has been soft on younger Dom Pérignon vintages.

Taittinger’s Comtes has been interesting to track; the hotly anticipated 2008 vintage launched in October 2020 at a premium to market prices of the 2007 and 2006, as reported by analyst group Wine Lister at the time.

According to Goedhuis, the 2008 ‘immediately rose to trade at £700 [for 6x75cl in bond] from its initial release price of £535’. Interest in the release also helped to fuel demand for other available vintages of Comtes de Champagne, notably 2006 and 2004, Goedhuis said.

‘Clearly in 2008 they changed the price context and all the back vintages went up [too],’ said Matthew O’Connell, head of investment at Bordeaux Index, of the latest Comtes release. O’Connell also highlighted Cristal and Bollinger as showing good momentum.

Both O’Connell and Goedhuis noted that there was a particularly strong relationship between price rises and diminishing supplies in prestige cuvée Champagne. O’Connell pointed to recent price gains on Krug 1998 and 2000 as a possible example of this.

However, even at the top level, Champagne doesn’t tend to generate the biggest returns in the fine wine market. O’Connell said prestige cuvée Champagne was generally a solid performer in investment terms, albeit more at the ‘lower risk, lower return’ end of the market.

Nothing is guaranteed, of course, and O’Connell also offered a note of caution on smaller- production wines, including grower Champagne, due to lower liquidity – despite unquestionable drinking pleasure. ‘It has to be tradeable’ from an investment perspective, he said.

Miles Davis of Wine Owners exchange said Champagne investment was worth considering. ‘The best wines can age gracefully for a long, long time and the prices for top Champagnes (of both colours) from top producers and vintages only travel in one direction,’ he said in a June report.

He highlighted rosé Champagnes as a lesser-explored area of the market with value potential. ‘Vintage rosés are not produced as often as whites and are often more vinous or “gastronomique”.’

With the release of Krug 2008 still to come, plus the planned debut of Dom Pérignon 2012 this autumn, collectors have plenty to consider.

Monitor: the latest sales activity

Champagne moment

Old and rare vintage Champagnes demonstrated staying power on the market during a recent Acker auction involving a series of top cuvées going back to the 1920s. A bottle of Salon, Le Mesnil Nature from the fabled 1928 vintage fetched $27,390 (£19,442), versus a presale high estimate of $16,000.

Other highlights from Acker’s two-day Trinity Auction in June included three bottles of Louis Roederer, Cristal 1947, also sold for $27,390 (high estimate $12,000). Six magnums of Pol Roger, Sir Winston Churchill 1975 fetched $19,920 (high estimate $16,000), while 12 bottles of Taittinger, Comtes de Champagne 1976 sold for $16,185 (high estimate $9,500).

Looking at the broader market, Shaun Bishop, CEO of US merchant JJ Buckley, said prestige cuvée Champagnes were seeing strong interest from customers, especially Cristal, Dom Pérignon, Comtes de Champagne, Cuvée Sir Winston Churchill and Bollinger’s RD. ‘We think the increase in prestige cuvée Champagne is in part due to higher household discretionary income while they look for ways to find some enjoyment through lockdowns,’ he told Decanter. ‘As people are entertaining more at home, they are stepping up their purchase price and seeking better quality.’ This analysis also suggests some of the wines are being drunk rather than cellared (see comments below on supply and demand dynamics).

Tasted & rated for Decanter Premium

Billecart-Salmon, Elisabeth Salmon Brut Rosé, Champagne 2008 98pts

An example of serious rosé Champagne at the top of the market, the 2008 was recently launched and rated 98 points by expert Peter Liem. ‘A superb vintage of this renowned prestige cuvée,’ said Liem, who also co-hosted a Decanter virtual masterclass with Billecart-Salmon. ‘Despite ageing on its lees for 10 years, it remains almost shockingly youthful,’ Liem said. At the time of writing, Farr Vintners was selling 12 bottles in bond for £1,380. Millésima UK was selling one bottle in a presentation case for £180 or a magnum for £410, both including duty & VAT.

Investing in Champagne: The Bordeaux Index view

Fine wine & spirits specialists Bordeaux Index kindly sponsor this section of Decanter, and provide their view on the market here. They can be found at bordeauxindex.com

Champagne has been one of the best-performing segments of the market in recent years, with US trade tariffs and the strong 2008 vintage helping to fuel existing positive momentum. The segment is perhaps the clearest example of supply/demand dynamics in fine wine, with older vintages (most recently 2002 and 2004) seeing significant moves once supply dwindles – something that happens in quite a short time-window, especially given the level of early consumption.

Two notable recent factors: the interplay of Krug and Cristal, the latter having gained ground before Krug recovered more recently, driven (as the chart shows) in particular by older vintages; and the flattening of prices across recent vintages of Dom Pérignon, which we ascribe to Asian demand for young-drinking vintages without much focus on a specific year. We did expect performance to slow as tariffs came off and the market was perhaps less excited about 2012/13 than it was for 2008. However, signs so far this year suggest a more positive outlook.

Decanter’s investment articles are published for informational purposes only and do not constitute investment advice. Wine prices may vary and they can go down as well as up. Seek independent advice where necessary and be aware that wine investment is unregulated in several markets, including the UK

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