Smart Tips For Investing In Wine
Investing in wine can be quite profitable because fine wine never really goes out of style. Besides, with the recent boom in the travel and tourism sector, alongside the flourishing restaurant business in general, the need for quality wine is higher than ever before. So, the question is, what do you need to know about the business before actually getting into it? To help make the best decision, here are five things that every businessman who is thinking about getting into the wine business should consider first.
Deal in the Best Wine Possible
When it comes to wine, cheap just doesn’t cut it, and it’s even truer in case of the wine business. Invest in products such as first-growth Bordeaux wines like Mouton Rothschild, Margaux or Haut-Brion because they have a history of being in constant global demand. Some of the other popular wines that you should consider include Tuscan red wines such as Sassicaia, Tignanello, and Ornellaia, or California’s own Screaming Eagle Cabernet. The bottom line is that a smaller collection of fine wines is better for business than a much larger collection of cheap wine when you factor in the storage costs and the profit margins.
Watch Where You Store Your Wines
One cannot stress enough on the importance of choosing the right wine cellar because if it’s not at par with the very specific standards that are necessary for wine storage, you will lose all your investment. Go to a bonded wine storage company like octavianvaults.co.uk, who have years of bottle storage experience behind them. They have taken the science of controlling humidity and temperature inside wine cellars to the point of perfection. Also, make sure that the crate boxes are made of pure wood and properly sealed before putting them in the cellar.
A 5-Year Investment is Minimum
Everyone knows that the older a bottle gets, the better it tastes and the higher it sells for in the market. In order to make full use of this situation, you should be looking to buy fine wines that are not only popular but are also produced in small quantities. They will cost more, but five to ten years down the line, you will be making a very hefty profit on that investment as the bottles keep getting rarer and rarer. The general idea is to not buy anything that is being made in excess of 20,000 bottles.
When you pre-purchase a bottle while it still is in the barrel, you are making an en primeur purchase. Now, there are some risks associated with such purchases and, therefore, consider the following points.
- It’s a long-term commitment, with the delivery itself happening 2-3 years after the purchase
- The barrel samples you taste at the time of purchasing may not be the same taste that the final bottles will offer; for better or worse
However, as long as you are dealing with the top merchants and winemakers, you will also have the advantage of acquiring the wine at its lowest possible price. It’s a tried and true business move, but just make sure that you know what you are doing.
There are, of course, other details which you will get to know about the business with experience, but for now, these four should help you get started.