If you’re lucky, you’ve experienced this situation. A friend descends into their basement and returns with a bottle of Bordeaux, maybe Burgundy, that has been resting for decades. “Can you believe this wine is four figures now? I bought it for a few euros!”
Stories like that make wine collecting sound like a profitable gig—and it certainly can be. In 2018, for example, bottles of Domaine de la Romanée-Conti sold for $558,000 (over 17 times its original estimate) and Domaine Leroy Musigny Grand Cru 2012 for $233,000 at Sotheby’s.
That year, total sales for Sotheby’s wine and spirits auctions hit a record high: $100 million sold over the year. By 2023, sales skyrocketed to $159 million. Even fraudster Rudy Kurniawan sold an estimated $30 million in counterfeit wine over his career.
These sorts of paydays unsurprisingly raise questions for lovers of wine. Can anyone turn these kinds of profits? Do old bottles always equal big bills? Below, expert sommeliers and collectors weigh in on the potential paycheck of investing in wine.
Entering the Collectors Ring
“Wine collecting absolutely can be profitable,” says Molly Austad, wine director at Bludorn, Navy Blue and Bar Bludorn in Houston. “But it’s more nuanced than bottle price, plus storage, plus time equals profit.”
“Life is simple, but not that simple,” adds Aldo Sohm, wine director at Le Bernardin and Aldo Sohm Wine Bar.
Yes, you can make a profit collecting wine. But there’s a big asterisk beside that yes. Turning a profit isn’t as easy as investment and time: selection, provenance, storage and trends will dictate if a wine will excel as it ages and appreciate in value.
“You have to collect and sell the right wines to make a profit,” says Sohm. “Take, for example, commercial Pinot Grigio. You’re not going to gain value from that. However, if you consider a very rare Burgundy, it’s very likely you will.”
“Only very few wines in the world will become valuable with age,” says Matthew Hyland, chef and culinary partner at Zoé Tong, one of Bon Appetit’s most anticipated new openings.
He references wines that offer empirical evidence of aging and appreciating well. “Big California Cabs, like Harlan and Screaming Eagle, and culty wines, like Bionic Frog and Sine Qua Non, are always increasing in price as it ages,” he says. “As do famous—for a reason—producers of first growth Bordeaux, Grand Cru Burgundy, Brunellos, Super Tuscans and Barolos.”
Not every new collector can walk in off the street and pick up all of the above. Top wines are elusive. The best of Bordeaux is sold off en premiere and California’s top Cabs are released to mailing lists with decades-long wait lists. “Relationships with suppliers are everything,” says Sohm.
The Ups and Downs of Dusties
“Personally, I think collecting wine is far too risky for those only seeking to turn a profit,” says Will Taylor, beverage director of La Compagnie Flatiron in New York. “Can you make money off your collection? Absolutely, but it requires considerable buy-in from the investor and a somewhat steep learning curve, lest you seek the guidance of a professional, which of course cuts into the profit margin.”
And the guardrails for good investment wine have moved over the last few decades. “Sadly, over the last decade, and particularly post-pandemic, wine has become a lifestyle product,” says Sohm.
He’s seen supply and demand move prices up and down at the whims of markets and trends. This is especially true, he notes, with cult brands, like Screaming Eagle and Opus One, which have become more of a status symbol than a thing passionate wine-lovers covet.
Price inflation has also sent Premiere Cru prices into outer space and made allocations of coveted cuvees almost impossible to land. Non-oenophiles have become aware of the potential financial rewards of wine, and wine collecting has shifted from a hedonistic hobby to an asset-class investment.
“A lot of people in finance have realized there's an opportunity to make money, and came up with the idea to collect wine as an investment,” says Sohm. “Demand has begun to outweigh supply, which explains the rise in prices.”
Tech platforms have popped up to capitalize on the commodification of wine. One, VinoVest, uses sommeliers and an investment algorithm to direct customer’s investments while storing and insuring all bottles in-house. Another, Rally, allows investors to buy equity shares of wine.
“Wine is inherently a long-term commodity that gets better as it ages, so its value only goes up,” argues Anthony Zhang, cofounder/CEO of VinoVest.
What’s the Return?
With this new boom in collecting wine as an investment, what do possible profits look like?
Probably, not as high as one would think.
Jeff Gillis, the founder of the Winelikes app, flips bottles at auctions to make extra cash—funds for wines he really loves. But it’s not a big-figures game.
He recently bought a 2019 Schrader Double Diamond Oakville Cabernet Sauvignon for $62 and sold it for $90: $28 profit. “The margins aren’t huge, but they add up over time,” he says.
Collecting also requires the cost, time and labor of proper storage. Hyland collects for personal consumption, but will sometimes sell for the right price. It’s still work. ”With all the costs associated with storage, shipping and reselling, I will probably break even when the time comes to sell my high-end collectibles,” he says.
Former Tampa Bay Buccaneers player, trader and venture consultant Pete Najarian is meticulous with his collection: he buys from reputable dealers and auctions, logs his details in CellarTrackers, purchases insurance on investment-grade wines and stores them in a temperature- and humidity-controlled home cellar.
Success still isn’t a guarantee, but the former professional athlete embraces the occasional loss. He was drawn to wine collecting not for the promise of premium returns, but the ability to happily consume an investment that didn't appreciate as he'd hoped.
“What a fallback plan,” he says. “How many equity or commodity investments have we made that have lost money, and left a sour taste in our mouths? I even consider the risk of a corked wine loss much lower than some investments I've made over a similar time frame.”
So, what, exactly, is his return?
It’s not clear-cut. He looks at it this way: A $150 bottle of wine may be worth $300 down the road. “But if I sell, I need to look at the costs of insuring, storing, shipping, taxes and transaction fees, handling, buying special shipping boxes and insuring the shipping,” he says. “Or, do I enjoy an incredible $300 wine that I bought for half the price with friends and family at weddings, anniversaries or Thursday night pasta dinners? What's the return measured with happiness?”
Regardless of his vacillating on the topic, Najarian says, “I enjoy investing in wine as it presents so many win-win scenarios.”
Understanding the Intangibles of Wine
While collectible wine is somewhat less sensitive to market sway than say, stocks, it’s still ambiguous and requires an acceptance of the unpredictability.
“Lately, I have been collecting big, young Napa Cabernet Sauvignons, because we don’t know how climate change and wildfires will affect the growing region in 30 years,” says Hyland. “Maybe I’ll have some of the last Napa Cabernets—I can pass them on to my kids!”
There’s no guarantee any wine’s quality will ascend or that the market will favor these wines in five, ten, fifteen or twenty years. “I just don’t like to think of wine as an investment like one would a 401k,” says Sohm.
The industry is fickle and full of surprises. A bottle can be faulted, oxidized, inadequate or just not what you’d expect. Uncertainty is part of the whole collecting schtick—as any wine nerd knows, opening a bottle could result in sheer delight or absolute disappointment.
“Wine is ultimately an agricultural product with a fairly distinct story arc,” Taylor continues. “I think it's a bad investment for anyone just looking to turn a profit because it requires too much time, attention and space. Wine collecting is great for hobbyists with the stuff: collect at your own risk.”
More Collecting Coverage
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- Choose the right wine fridge and cooler for your collection.
- Keep your collection happy with these 7 wine storage tips.
- Get to know the five enemies of wine.
From the Shop
The Best Wine Coolers
A refrigerated wine cooler is the best way to ensure your wine is stored properly, and these attractive units allow you to show off your collection in style.
Published: September 19, 2024
