Investing in Wine: Bordeaux Futures

Investing in wine is not an easy thing to do. There seems to be this myth out there than anyone can just pick up some bottles, put them in a basement for 20 years, and then sell them easily for a large financial gain. This is possible, but only for astute buyers with lots of patience and lots of cash. Today I'm looking at Bordeaux futures as an investment, and I'll look at other regions in future articles. 

Physical considerations: The wines need to be properly stored their entire lives from release to selling. Only the best natural basements or professional storage work. Basements need to be humid and very stable in temperature. A small seasonal fluctuation is fine, but it can't fluctuate daily. Wine fridges work, but they need to be top of the line models which add a huge cost (about $5,000 per 300 bottles for instance), as many cheaper models vibrate the wine or don't manage humidity well. Lastly, the best option, professional storage spaces keep wine in ideal conditions but cost roughly $5-$10 per year per bottle. 

Bordeaux en Primeur (futures): This is the most sure bet one can make in wine investing, but it still isn't easy to get a sizable return. Every May producers release access to the previous harvest's wine which is still in barrel. I'm writing in May 2025 and we are currently getting offers for 2024 Bordeaux with great pricing in a tricky, wet vintage. Mouton Rothschild can be purchased for about $325-$360 per bottle this vintage from some major retailers across the USA (we offered 2023 futures but are skipping this year). That's super cheap for Mouton, but you are giving an interest free loan to the importer and the producer before actually acquiring the bottles some time in 2027 or 2028. Looking back to 2021, a similar vintage to 2024 that is now physically released, prices start in the low $500s to pick up a bottle today. A 40%+ return in 3 years sounds great and easy, but here's the caveat: private parties selling wine for retail price is essentially impossible. 

Auction houses are the easiest route for private individuals to sell their wine collections, but these houses charge a buyer's premium typically between 20% and 25%. This in turn makes the hammer prices closer to and often lower than wholesale as it makes no sense for someone to buy at auction for a total price that's higher than a retailer. So say you bought 24 bottles of 2021 Mouton Rothschild at $350 each (but they were actually much more expensive than 2024) and now want to unload them. The auction will not fetch you $500 per bottle but at best about $417 which would end up costing the buyer around $490. The same result would occur if selling directly to a retailer as it makes no sense for the retailer to pay full market value and have no profit potential on those bottles. 

So let's just wait longer. Here's a table of approximate en primeur release prices and current average retail price of Mouton Rothschild from 2000 to 2023. The 4th column shows an expected bottle prices at auction currently, then the 5th the total return if one were to buy at en primeur upon release and sell at auction right now. Finally the compound annual growth rate is noted. 

The wine market boomed around the release of 2005 Bordeaux, and anything bought since has seen a higher release price and has yet to be a worthwhile investment. It should also be noted that anyone who bought futures in the 1980s or 1990s is probably seeing good returns, but a 30-40 year timeline is quite a commitment. At best Bordeaux futures can give a return similar to the S&P 500, but that's ignoring the cost of storage and moving the wine. Bottom line: buy some futures for fun and to drink some great Bordeaux with the option to liquidate if needed, but don't make it your 401(k) or Roth IRA replacement.