Investing in Italian wine: spotlight on prospects
Interest in top-tier Italian wines for investment has risen in recent years. Will this continue? We asked some of the wine market’s leading lights.
Investing in italian wine: The next rising stars?
With increasing numbers of collectors seeking opportunities from Bolgheri to Barolo, Italy has arguably been the star of the fine wine market in the past two years.
Underpinning this development is collectors’ rising awareness of the value on offer.
‘The cost to purchase from a top-tier producer making wine from a respected site is significantly less in Piedmont and Tuscany than in many other wine regions,’ says Ben Aneff, managing partner at Tribeca Wine Merchants in New York. ‘It’s become close to impossible in Burgundy and Napa, for instance,’ he adds.
READ ALSO: Collector’s guide: the rise of Piedmont
‘There’s as much interest in Italy as there has ever been,’ says Will Hargrove, head of fine wine at UK merchant Corney & Barrow. For all of the buzz surrounding recent vintages, he thinks a big shift has been that ‘people are more likely to follow producers year in, year out’.
Farr Vintners’ sales director Mark Ross says that although ‘Italy isn’t a huge part of our business, it’s one of the biggest growth areas in the 10 years I’ve been here’.
Where does all this lead to? Despite all of the drinking pleasure on offer, there are different opinions about Italy’s prospects on the secondary market. Dynamics vary, too.
It’s an oversimplification, but Piedmont’s set-up and tendency towards smaller volumes make for natural comparisons with Burgundy. On the other hand, SuperTuscans are often weighed against top Bordeaux, not least due to their shared grape varieties.
Matthew O’Connell, head of investment at Bordeaux Index, says there are still reasons for investors to tread relatively lightly. He says secondary market demand for Piedmont remains uncertain beyond the very top names, while much of Brunello has yet to really show investment potential.
He adds that top SuperTuscan labels, such as Sassicaia, Ornellaia, Masseto, Solaia and Tignanello, ‘still look pretty cheap’ in a wider context but have also ‘come a long way in price’ in recent years. ‘Sassicaia has the greatest following of all of them. There are just more collectors looking for it,’ he adds.
Sotheby’s revealed recently that its 10 bestselling Italian wine producers by sales value across auction and retail in 2020 were: Ornellaia, Sassicaia, Masseto, Antinori, Gaja, Soldera, Tenuta di Trinoro, Sotheby’s (own-label), Fontodi and Biondi Santi.
At Liv-ex, Italy’s overall momentum appeared to have slowed slightly in 2021, but trading data also showed signs of broadening collector interest. ‘Piedmont is seeing more trade,’ said Liv-ex in a report on the region in mid-March. ‘Vietti, Luciano Sandrone, Roberto Voerzio, Ceretto and Domenico Clerico have been among the most sought-after producers, seeing consistent volume trade [year-to-date],’ it said.
Top-tier Barolos, such as Giacomo Conterno’s Monfortino Riserva, already command lofty prices but could be worth considering if you have the funds. ‘People will always pay for the best,’ says Miles Davis, head of professional portfolio management at Wine Owners.
He adds that pricing can be an indicator of demand. ‘If it’s trading at £100 a bottle then that’s interesting as it tells me there’s proper secondary market interest.’
Davis says Italy is in an ‘adolescent’ phase in terms of its market development but is being taken more seriously by collectors. ‘Even compared to five years ago, it’s a different scene.’
Investing in italian wine: the latest sales activity
Brunello hits the heights
After the excitement surrounding Barolo 2016 releases last year, has the mantle passed to Brunello di Montalcino? ‘Demand is furious,’ says Giles Burke-Gaffney, buying director at UK-based merchant Justerini & Brooks, commenting on the rush to acquire the newly released Brunello 2016s.
‘We are only two days into our offer but sales have already reached three-quarters of what they were last year – I would not be surprised if we ended up doubling the 2015 vintage total.’
Further north, Barolo 2017 has had the sometimes dubious honour of following last year’s hype, and yet again there are signs that Italy is a more established part of collectors’ annual buying strategies. ‘Demand isn’t what it was last year, but I’m pleased to see people are still buying wines that they believe in,’ says Mark Ross, sales director at Farr Vintners.
Looking at indicators of market momentum more broadly, Liv-ex’s Italy 100 index rose by about 11.3% in the year to the end of April and was up by about 50% over five years.
However, it slightly underperformed on other regional indices in the first four months of 2021, still rising by 2%. Liv-ex added in May that Sassicaia 2018 ‘is the top traded Italian wine by value year-to-date and has seen its price rise 11.4% from its release earlier in the year’.
Tasted & rated for Decanter Premium
Ornellaia, Bolgheri Superiore, Tuscany 2007 98pts
This was recently rated 98pts by Monty Waldin, who reviewed it alongside several vintages after co-hosting a Decanter virtual masterclass with the SuperTuscan estate. Waldin praised its ‘remarkable, Peter Pan-like freshness’ with generous fruit and ‘benign but still purposeful tannins’.
Liv-ex data as of 11 May showed the market price was £2,100 (12x75cl ib), having roughly doubled over the past decade.
Ornellaia 2018 was recently released by UK merchants at about £1,600 (12x75cl ib), and was rated 96pts for Decanter by both Jane Anson and Aldo Fiordelli.
Investing in italian wine: 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.
Tuscany has clearly been one of the market’s standout performers across the last two to three years, driven by a combination of strong 2015 and 2016 vintages and also exemption from US tariffs; and earlier, in 2017, Piedmont saw a focused spike in pricing of top ‘traditional’ producers.
Our current expectation is that Italy may be somewhat in the shadow of Bordeaux and Burgundy – where buying activity is very strong at present – over the coming year or two. Mainly this is because the catalysts for further gains in Italy are not obvious, and the Tuscan wines especially have seen a relative step-change in value, which often sees a corresponding subsequent period of price consolidation.
Tuscany’s price performance in 2021 so far is broadly encouraging (Piedmont is more static, although with good activity) and there is a case to be made that as Bordeaux rises in value – a clear trend of the year so far – Tuscany may look cheaper again and this could bring renewed buying interest.
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