Wine Basics
Wine Investing
Apr 24, 2025
How We Model Estimated Returns
An Insight into our Historic Return Analysis
We have established ourselves at WineFi as a market-leader in data-driven quantitative analysis within the wine markets. The Investment Overviews for each of our syndicates feature an average historic return. This article outlines the process by which we calculate this historic return:
Analytics: The data team run analysis for each portfolio focusing on:
Trend identification: Defining which wines or groups of wines are most likely to appreciate over the coming 5-7 years;
Price analysis: Identifying producers, labels and vintages that have appreciated most historically, under/overvalued wines and scoring wines with our unique relative value age-adjusted price-per-point metric;
Liquidity analysis: Using trade and listing data to understand which wines have the strongest secondary market demand and how this changes over time.
Modelling: Through the analysis we define a set of rules and criteria that have proven to be predictive of returns, these rules and inputs are used to build algorithms which predict wines to invest in.
Backtesting: The algorithms are tested in each investment period from 2002 to 2024. For each year 1000s of portfolio simulations are run with the algorithm selecting purchases.
Qualitative review: The average CAGR and variance across all simulations are used to define a starting point for anticipated CAGR. We then consider current market conditions and outlook, aligning CAGR expectations of our our veteran investment committee with model simulations.
Variability in year-on-year wine returns:
Fine wine returns exhibit significant year-over-year variability, typically characterised by periods of substantial price growth followed by years of minimal to low single-digit increases. This can be attributed to several key factors:
Supply levels: Wine supply is heavily influenced by weather conditions, which affect annual yields and overall availability in the market.
Global trends and economic conditions: Shifts in global consumer preferences and varying economic environments play a crucial role in determining market performance.
Merchant stock levels: When merchants are overstocked, or face reduced demand, they often implement price reductions to manage inventory levels. This was particularly evident in the wake of covid, retailers and merchants anticipated that post-pandemic demand would continue at pandemic levels.
For further information, please contact support@winefi.co.
Enjoyed the article? Spread the news!
Read More
Producer
Wine Basics
Aug 25, 2025
Producer Spotlight: Hubert Lamy
Investing in Hubert Lamy
Overview
Producer
Wine Basics
Aug 25, 2025
Producer Spotlight: Château Haut-Brion
Investing in Château Haut-Brion
Overview
Wine Basics
Wine Investing
Aug 10, 2025
When is the Best Time to Invest in Fine Wine?
The fine wine market has always been a blend of passion and performance. For some, the allure lies in the artistry of the vineyard; for others, it’s the steady, tangible returns that make fine wine a compelling alternative asset.
But here’s the perennial question for investors: when is the right time to invest?
In our latest analysis at WineFi, we examined one of the most sought-after segments of the market—red Burgundy—to see how timing influences returns. We compared all red Burgundy wines in our investment universe to the Liv-ex Burgundy 150 index, the sector’s benchmark, and looked for patterns that could guide smarter entry and exit strategies.
The Findings at a Glance
Our data paints a clear picture of how red Burgundy performs at different stages of its lifecycle:
🚫 Don’t buy on release – On average, red Burgundy underperforms its benchmark in the first few years after release. That means paying top prices straight out of the gate often isn’t the best move for returns-focused investors.
🎯 Sweet spot: Year 6 – Performance begins to accelerate around the sixth year—coinciding with the median start of the wine’s drinking window. From here, returns tend to outpace the benchmark.
📈 Outperformance window: Years 6–25 – During this period, red Burgundy has historically delivered impressive relative gains. By year 25, the mean return in our dataset was 1.8x higher than the benchmark.
⚠️ After year 25: A trickier game – Performance tends to plateau, and volatility increases. As bottles become rarer and more valuable, prices can swing sharply in either direction. This aligns with the median end of red Burgundy’s drinking window, when investment and consumption dynamics shift.
Why This Matters for Investors
Fine wine, unlike many asset classes, is both finite and consumable. Every bottle opened reduces supply, creating scarcity—but also introducing unpredictability as remaining stock becomes fragmented across cellars worldwide.
By aligning purchases with a wine’s drinking window, investors can:
Maximise potential upside by entering when market demand is strengthening.
Reduce downside risk by avoiding the softer performance often seen in the early years.
Plan exits strategically before volatility overtakes predictable growth.
The Limits (and Power) of the Data
While this study looks at the mean performance of all red Burgundy wines in our universe, individual results will vary significantly by producer, vintage, and even format (bottle size). Legendary producers like Domaine de la Romanée-Conti may defy these trends altogether, while lesser-known estates might follow them more closely.
Still, using drinking windows as a timing tool offers a practical framework for making better-informed decisions—especially for investors building diversified portfolios across regions and styles.
Final Pour
The data tells us that patience pays in fine wine investment—particularly in Burgundy. If you can resist the urge to buy on release and instead enter around year six, history suggests you’ll be swimming with the current rather than against it.
In fine wine, as in life, timing is everything. And for Burgundy lovers, that sixth-year mark might just be the moment when the stars—and the corks—align.
