Q&A With Atul Tiwari, CEO Cult Wines Americas

Cult Wine Investment & Investing in Fine Wine

Tell us about Cult Wine Investment? 

Cult Wines is the global leader in fine wine collection and investment management. We have $300 million of fine wine assets under management, a 14-year track record of performance and governance, 6 offices around the world, and 80 people on the team. We are on a mission to make investing in wine as enjoyable and rewarding as the wine itself.  We provide access to individual portfolios of fine wine paired with market-leading investment expertise to make it easier for people to invest in this alternative asset class.  Our investment portfolios emphasize enjoyment and discovery of wine while making investing in wine even simpler and more accessible than ever before. With just four simple steps and starting at $10,000, anyone from experienced investors to wine lovers to novice investors can build a customized collection of investment-grade wine and start enjoying enriched benefits immediately.

Is fine wine investing a relatively new concept in the United States? How does it differ from collecting fine wine for personal use?

Although investing in fine wine is well established in many parts of the world, fine wine as an organized asset class is relatively new in the United States. But it is quickly gaining popularity thanks in part to its low correlation to traditional markets, low volatility, and its historical performance over the long term. The US is the world’s largest wine market and is a natural fit for wine investment. 49% of Americans drink wine and 431 million cases of wine were sold in 2020. Fine wine is considered an alternative asset – like real estate or gold – and is an excellent diversification tool as part of a portfolio alongside other uncorrelated assets.

Investing in fine wine is very different than collecting wine. Collecting wine may be driven more by passion, whereas other factors like performance, historical data, and market trends will come into play when investing in fine wine. It Is difficult to do on your own as it involves sourcing, transporting, storing, and ensuring the fine wine to preserve and grow its value.

Your Burgundy 2022 campaign launched last week. What is Burgundy En Premeur?

There’s no substitute for Burgundy. It’s the ultimate wine region and over many years our team has proven to be the experts at investing in it. Burgundy En Premeur, an annual event, is an opportunity to invest in world-renowned Pinot Noirs and Chardonnays before the vintage is bottled. Through Burgundy En Premeur our clients get access to highly allocated wines that offer considerable long-term investment potential. In our view, the quality of wines from the region has never been higher and the technical data and internal market dynamics suggest we are likely in the middle of another Burgundy bull run (Liv-ex Burgundy 150 Index +31% in 2021 versus +19% for the broad market Liv-ex Fine Wine 1000).

The price of fine wine has appreciated a lot in the past two years, especially wines such as Domaine Leroy, Bruno Giacosa, Chateau Rayas Chateau neuf-du Pape Reserve, which have appreciated a lot faster than their peers. What common traits do these appreciating wines share? Do you think they have reached their highest points? 

Common traits are a combination of exceptional quality, scarcity of supply, and strong global brand awareness and demand. Once a global audience wakes up to the allure of the finest and rarest of wines, the wines can deliver incredible price appreciation.

Even the most expensive segments of the fine wine market can continue to deliver onward growth. One of the fine wine’s strengths is its ability to deliver consistent returns when viewed over long time periods. However, as with all investments, it is important to not put all your eggs in one basket so while iconic names, such as Domaine Leroy or Bruno Giacosa, should form a core part of a well-diversified wine portfolio, our research team is constantly searching for up-and-coming producers and wines that can deliver strong growth.

We all know that it’s hard to get a quota of the top wines. What’s the secret of Cult Wines developing and maintaining good relationships with the chateaux and negociants? Any tips that you are willing to share? 

As well as investors, we at Cult Wines are wine lovers. Therefore, we develop relationships with chateaux, producers, and negociants because we are passionate about their wines and want to help share their amazing wines with the world. With over 14 years of experience, we have direct relationships and access to leading winemakers and negociants. Great relationships are not formed overnight but through working together year after year.

To find out more, please visit our website at www.wineinvestment.com.

 Written in partnership with Cult Wines