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Champagne: Cashing In On Older Vintages

Written By: Kasey Carpenter on Thursday, November 20, 2008

Buy now, drink now - that's the modus for champagne. This trend leaves an opening for investment in older vintages.

One doesn't often think of Champagne when they think of investment potential. But why not? It is a scare commodity, a rather pricey one, can age pretty well (though not as long as Bordeaux, typically) and is sought by those with money. Oh and then there is the sexy factor, which makes people forget their senses when they absolutely have to have it.

One of the more interesting factors in why Champagne can be such a lucrative investment: Champagne is typically a wine that is bought and consumed immediately. You don't hear of too many people laying down Champagne they way they lay down other wines. Because of this practice, the availability of vintage Champagne is rather scarce. Imagine if Bordeaux was consumed in such a manner, where everyone went out the night before a celebratory party, bought a few cases for the event, popped the corks that night and filled all glasses present. Think of just how much less Bordeaux there would be on the market.

So, with this in mind, let's take a look at prices for vintage Champagne, at least eth collectible ones. Now for the purposes of this study, we aren't going to get into a debate about which house is the best, or if you should be drinking single-grower Champagnes versus "house" Champagnes such as Krug and Dom, etc.. (Note: you should invest in what's investable, and drink the single grower stuff - for a good jumping off point, look to the Champagne section of Terry Theise's portfolio, this is some of the most fun, best valued Champagne around, but no one knows it from an investment standpoint.)

To get a glimpse of the profitability of this sector of wine investment, lets take the most recent blockbuster vintage that is in its sweet spot of drinkability, the 1996 vintage.

1996 Krug CdM reporting a best auction price of $14101 a case.

1996 Salon Les Mesnil reporting a best auction price of $3441 a case.

1996 Roederer Cristal reporting a best auction price of $4700 a case.

1996 Billecart-Salmon reporting a best auction price of $3658 a case.

So what do these numbers mean? Well when you consider that the Krug was the highest priced Champagne of the bunch with a release price of around $350US, and the rest tracking down to just above $100US, you see the value. Can you name a '96 Bordeaux that released for $350 and is now selling for over $1000 a bottle (besides Petrus)?

So should you chuck the Bordeaux model in favor of the bubbly? Not at all. But, when you can diversify, even in the narrow band of wine investment, why not? Also, Champagne is still relatively off the radar of the hardcore investor/collectors who are typically dialed into Bordeaux, Cult Cali Cabs, Burgundy, etc...

I personally never gave much thought to Champagne as an investment, but it is that time of year when Champagne gets sold and consumed in record numbers. Perhaps we should all buy a bit extra and sock it away.

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