Category: Wine Economics

South Africa’s Wine Exports Bounce Back After Two Years

The South African wine industry is making a comeback after facing serious challenges the past two years.

There was a distinct silver lining when wine exports recovered to a healthy“volume of 388 million litres, which amounted to R10.2-billion” according to a statement by Wines of South Africa.

There was a strong demand from UK, US and China, these three countries helped South African wine exports increase by 12.1% in value to R10.2bn in 2021.

Top Export Markets

The UK remains South Africa’s largest export market. Volume sales to UK increased 12% to 92.5 million litres; value sales up 20% to R2.5bn.

Germany was the second largest export market, with volumes at compared to the previous year.

Shipments to the US increased 134% by volume and 39% by value to reach R887m.

The Netherlands was the fourth largest export market (by value), followed by other African countries, with exports increasing 50%. Canada and France were also very strong.

The fastest growth came from China, with exports increasing 189% by volume and 59% by value to R458 million. China is now South Africa’s eighth largest export market.

The South African alcoholic drinks industry suffered a very challenging few years as the government imposed a series of domestic sales bans and export bans during the pandemic.

“It is good for our recovery efforts, as the alcohol industry has suffered almost five alcohol bans which amount to about 26 weeks of non-trading,” said National Liquor Traders Council spokesperson Lucky Ntimane. “So the announcement is a welcome relief, but people need to understand that this is also not a licence for non-compliance. It does not mean that Covid-19 is gone or disappeared.”

The popular trade show Cape Wine is set to take place in October, which could give the industry an added boost. It was initially scheduled for September 2021, but it had to be postponed due to a coronavirus outbreak.

#southafricawine #wosa #southafrica #winewinewine #winelover #winelovers #instawine #instagramwine #winetime #wineculture #cheers #wineinsta #wineinstagram #winenews #wineeconomics #winetravel #wine #redwine #whitewine #rosewine

Burgundy’s Rising Prices Drive Liv-ex 1000 Index In January

 

  • The Liv-ex 1000 continued its bull run into the new year, rising 3.5%.
  • The Burgundy 150 was its best-performing sub-index, up 6.4%.
  • Champagne 50 and Rest of the World 60 followed, both rising 5.6%.

The broadest measure of the market, the Liv-ex Fine Wine 1000 index, rose 3.5% in January to close the month at 439.3.

The index is up 22.3% over one year versus 25.2% for the industry benchmark, the Liv-ex 100. All of the Liv-ex 1000 sub-indices increased last month.

Burgundy outperforms the broader market

The Burgundy 150 index was the best performer, up 6.4%. Prices for the region’s wines continue to soar, driven by looming shortages. Meanwhile, the 2020 En Primeur campaign stimulated demand for back vintages and the region took 24.6% of the market by value last month.

Both the Champagne 50 and the Rest of the World 60 sub-indices rose 5.6%.

Louis Roederer Cristal 2008 – the most traded wine by value in January – was also the top price performer in the Champagne 50, up 19.2%.

The biggest mover within the Rest of the World 60 was Dominus 2015, up 17.7%.

The Bordeaux 500 index has continued to lag behind the other sub-indices, rising just 1.0% in January. The performance of its sub-regions has been mixed, with some of the best-performers coming from Pomerol and rising between 14% to 18%.

Source Liv-Ex

#finewine #wineinvestment #wineinvestors #champagne #winenews #bordeaux #burgundy #frenchwine #livex #alternativeinvestment #investment #alternativeinvestments

@livexwine

Cult Wines Americas – The Future of Fine Wine Investment [Part 1]

The “Silver Linings” are real when it comes to fine wine. Despite 2021 being an unprecedented year due to COVID lockdowns, volatile markets, and Brexit challenges, it has been a record-breaking year for fine wine investment.

Both Champagne and Burgundy have an excellent final quarter, with Champagne gaining 22.98%, according to the Liv-ex Champagne 50 index, and the Burgundy 150 posted a 11.19% quarterly gain in advance of the upcoming 2020 vintage en primeur releases. The fine wine market certainly shows encouraging signs that a brighter future is ahead.

According to the Liv-ex Bordeaux 500 Index, over the last 18 months, there has been a resurgence of interest not only from those who have been building their wine portfolios over the longer term but also from new investors.

There are some big investors looking into this alternative-asset class including Warren Buffett himself, so I thought it would be a good idea to investigate further. Cult Wines Investment came on top of my searches.

About Cult Wines Investment
Founders Tom and Phil Gearing launched the Cult Wines platform in London during 2007 with the idea to revolutionize the way fine wine investment works and make the asset class more accessible. Not only is Cult Wine Investment the global leader in fine wine collection and investment management, but they are also on a mission to make investing in wine as enjoyable and rewarding as the wine itself.  The leadership team have a deep-rooted passion for fine vintages, and close relationships with prestigious and respected growers, as well as market-leading investment expertise.

Enters “Cult Wines” Americas
Cult Wines enters the North American market in 2021 with headquarters in New York and Toronto, as one of the first wine investment platforms with a special focus on US and Canadian investors.

“The US is a big player in the auction and collectors’ market but historically has been underserved in the wine investment market,” describes Tom Gearing, the CEO and co-founder of Cult Wines.

“Historically, the wine investment category has been perceived as only for the wealthy, or those with considerable wine knowledge. We know that is not the case and are enabling more people to invest effectively while maintaining the client service, impeccable standards, and returns for which we are known,” said Atul Tiwari, CEO Cult Wines Americas.

Cult Wine Investments website: www.wineinvestment.com

Here is a list of the Americas leadership team and either wines they have really enjoyed or regions they love.

Tom Gearing, Global CEO

Tom Gearing oversees the company’s overall strategy, global operations, and technology innovation. Tom has grown this start-up to an award-winning global company with $390 million assets under management (AUM) and 80+ employees in six offices including: United Kingdom, North America, and Asia Pacific.

Tom has been regularly quoted in the New York Times, Financial Times, Wall Street Journal, and Forbes. As well as being the recipient of numerous awards, he has received the Queen’s Award for Enterprise in the International Trade and the Spear’s 500. He also holds a WSET Level 3.

Tom’s Favorite Wines:

Tom enjoys chardonnay and pinot noir, and at the same time, he likes to try as many different styles and grape varieties as possible. His most memorable vinous experiences to date are Petrus ’61 en Magnum, Liger Belair La Romanee ’09 and Domaine Leroy, Richebourg ’03.

Atul Tiwari, CEO, Americas

Atul Tiwari leads the team and is responsible for the overall strategy and development of Cult Wines Americas. Hailed by Investment Executive as ‘having a knack for knowing what’s next.’

As former CEO of Vanguard Canada, Atul and his team helped pioneer ETF investing in Canada and grew the company to $30 billion in assets over 7.5 years. Prior to Vanguard, he was the founding President of BMO Exchange Traded Funds. In 2018 he received the Indo Canada Chamber of Commerce award for Corporate Executive of the Year and has twice been named to Wealth Professional’s annual list of People to Watch in the industry. Atul is a member of the Independent Review Committee for Mackenzie Funds, a Director of the D.D. Foundation, Atul is also a member of the Advisory Council for the CFA Society of Toronto and an Honorary Trustee of the Royal Ontario Museum.

Atul has previously managed a 4,000-bottle cellar of Bourgogne for Confrerie des Chevaliers du Tastevin (Toronto). It’s interesting to note that he also has a law degree from Osgoode Hall Law School and has practiced in both London (UK) and Toronto before transitioning to finance.

Atul’s Favorite Wines:

Atul has a passion and is very knowledgeable on Bourgogne, in addition he enjoys Bordeaux and Italian wines.

Carrie Tuck, CMO, Americas

Carrie has spent nearly two decades working in public relations and marketing for multimillion-dollar brands and start-ups within the financial services industry.

Prior to joining Cult Wines Americas as Chief Marketing Officer, Carrie was the Head of Marketing for Vanguard, Canada and was instrumental in building the brand in the region. Throughout her career, Carrie has held various senior positions at asset management and fund companies, where she ran marketing, product and client service. Carrie also holds a Bachelor of Arts (Honours) from Concordia University.

Favorite Wines:

Carrie likes to experiment with wine, so she seizes opportunities to try new wines whenever she can.

 

Jonathan Stevenson, EVP, Americas

Jonathan brings over ten years and extensive experience in the alternative investment sector of fine wine to his role of Executive Vice President at Cult Wines. In 2021, he was appointed to oversee Cult Wines’ global expansion into the Americas and is responsible for growing the client base.

Previously, Jonathan was the Sales Manager for the UK sales team. He began his career at Cult Wines as a Portfolio Manager after graduating from Newcastle University (UK) with a degree in Marketing and Management.

 

Favorite Wine:
Vega Sicilia Unico

– Up Next –

Cult Wines Americas – The Future of Fine Wine Investment [Part 2]

I will explore and do a deeper dive into this growing alternative-asset class, and explore Cult Wine’s new investment platform how it makes investing in fine wine more accessible!

#wine #finewine #wineinvestment #alternativeinvestment #winenews #winelovers #winecollectors #champagne #bordeaux #burgundy #finewinelovers #wineindustry #winebusiness #winetrade #winetrends #vin #frenchwine #winemarket #winenews #wineeconomics #vintagewine #wineinvestors #cultwines #cultwinesamericas #cultwinesUSA #cultwinescanada #cultcru #bourgogne #mycultcollection #winewednesday

 

Disclaimer

Past performance is not indicative of future success; the performance was calculated in GBP and will vary in other currencies. Any investment involves risk of partial or full loss of capital. The Cult Wines Index is a hypothetical tool. The results depicted here are not based on actual trading and do not account for the annual management fees that may be charged to a Cult Wines customer which ranges from 2.95% to 2.25% depending on the size of the portfolio, and there is no guarantee of similar performance with an investor’s particular portfolio.

SVB Wine Report: The US wine industry sees some challenges in 2022

According to the latest Silicon Valley Bank Wine Report shows that although 2021 proved to be a good year for the US wine industry, several serious challenges signal uncertain times ahead.

The report points out that underlying trends remained a big concern, with the most serious being that younger consumers are not getting interesting in wine, and wine is losing market share to spirits, craft beer, RTDs and other alcoholic drinks.

“This issue has yet to be addressed or solved, and the negative consequences are increasingly evident,” Rob McMillan, EVP and Founder, Premium Wine Division warned in the report. “Wine as a product has lost the lustre it once had with the consumer 20 years ago and is probably entering a phase of negative volume growth.”

“By 2025, 27.9 million Americans will cross normal retirement age at 66, while 30.3 million will cross age 40.5. That will be too many consumers leaving their best buying years, and too many consumers entering their best buying years, to ignore,” McMillan states.

The report also points out out the homogeny and lack of transparency of many entry level wines that was failing to appeal to younger, more health-conscious potential wine drinkers, who wanted to drink less but better, while the high price of more premium offering was another deterrent.

“Premium wine producers haven’t figured out how to produce their wine for an entry-level consumer. Without an on-ramp, it’s going to be hard to grow the wine category,” McMillan further states.

Declining volume sales

Across the on and off-trade, data from SipSource shows that growth in wine compared to spirits stalled at the onset of 2021, having both shown comparable volume growth during 2020. As the report showed, when businesses reopened in January 2021, that comparable trend took a dramatic turn and while spirits finished the year in 6.1% growth, wine was down -8.9%.

Although the report highlighted a number of tailwinds, it criticized the “lack of leadership within the wine industry to counter these obvious trends and cooperate to form a marketing organization to promote the wine category”.

This points to the potential decline of restaurants as an important channel for the wine industry in the US, the report also warned.

“The restaurant industry will likely continue to decline in its importance to the wine industry as a viable sales channel due to overpricing on the menu and consumers who value other alcoholic beverages over wine,” the report said. “Restaurants may find that wine is not in demand at the prices charged and that the cost to maintain deep stocks of wine is becoming senseless.”

There was evidence that the amount of wine sold through the wholesale channel fell throughout the year despite tasting rooms, restaurants, hotels and travel resuming business. This indicates that as restaurants reopened, wine inventories are being streamlined into smaller wine lists.

“The investment in long wine lists might be limited going forward,” McMillan said.

Other highlights:

• Consumer behaviour has irrevocably changed as a result of the pandemic – the switch to homeworking is set to stay, and the move to online purchasing is also set to remain.
• Premiumization has continue to accelerate, however the higher price points are being offset by lower total volumes.
• The industry needs to invest to accelerate, looking at online and ecommerce driven by data, rather than focusing on more traditional channels, such as the cellar door.
• A key warning came around anti-alcohol messaging, which it said continued to grow while guidelines from a variety of government and health organizations “loosely apply science to influence consumption and taxes”. However the greater threat was a push to place “additional and more dire cancer warnings on wine”. “The industry can’t allow that to become a reality.”

#wine #winetrade #winenews #wineeconomics #wineindustry #winelovers #SiliconValleyBank
#USwinemarket #SipSource #instawine #vin #instawine

Bordeaux Index records a 47% sales growth in 2021

The Bordeaux Index has reported sales growth of almost 50% year in 2021, to a company record total of US$174m.

Increased activity in Asia and the US (where trade tariffs on many French wines were suspended in Q1) has been most significant. The Bordeaux Index has also seen pronounced gains in the UK. Their client base also increased by c.30% in 2021.

The strong growth in volumes on the LiveTrade online platform, a trading venue in the market for Bordeaux, Champagne and Italian wines, came as the company prepares for the launch of a new, expanded version of the platform this year, when users from across the wine market will be able to trade the full spectrum of fine wines rather than the core set which LiveTrade has focused on to date.

Gary Boom, Founder and CEO of Bordeaux Index, commented:

“We are delighted to report record-breaking results and indeed such strong progress compared to 2020. While activity in the wine market – just as in other luxury assets and collectibles such as art – has no doubt been high, we believe our outsized growth is a clear vindication of our strategy to improve market access and transparency alongside providing best-in-class product expertise.”

“Looking ahead to 2022, there is certainly room for an optimistic outlook, with the global pool of wine collectors on a different scale to a decade ago, and also investors increasingly looking towards hard assets such as wine which deliver consistently strong performance, capital preservation and protection against inflation.”

“Building on the tremendous growth last year, we have invested in new technology to improve our LiveTrade platform, which we firmly believe will continue to transform the way fine wine is bought and sold globally.”

#bordeaux #bordeauxwine #bordeauxindex #burgundywine #greatwine #grandcru #finewine #winelover #champagne #champagnelover #vintagechampagne #livetrade
#wineinvestment #wineinvestors #wine #vin #frenchwine #madeinfrance

@bordeaux_index