The last two decades has seen the fine wine market experience an evolution. Historically wine collection has been the reserve of old world ‘gentleman’ and a select few in China and the States. Now investing in wine is a borderless pursuit, with the market available to anyone with a passion and an internet connection. This increase in participation has been elemental in the explosion of price and demand in a market where supply is fixed and finite.

This transition from a shuttered market full of nepotistic relationships, to a truly global and free market place, has happened rapidly. Stimulated primarily by the global proliferation of high-net-worth individuals looking to enjoy a classic symbol of status, the wine market simply needed to embrace evolution. The old world way of trading needed to be brought into the 21st century.

The Rise of The Global Millionaire Population

(Source: BiBO Investment Guide)

Ultra High Net Worth (UHNW) Growth by Region

(Source: BiBO Investment Guide)

The market opportunity created around the globe by this new wealth could not be ignored, and while wine infrastructure has for years been striving to catch up, we are pleased to say it now meets standards set by similar investment markets.

Projections of Wealth Proliferation Around the World

(Source: Knight Frank Wealth Report)

The radical transformation of the last decade is encapsulated best by the evolution of the Asian market, particularly China. The level of education, engagement and desire surrounding the consumption of the very top-tier of wines in China has rocketed. Now highly motivated and more than financially capable, the value and volume flowing East now ranks China comfortably as the largest consumer of fine wine in the world.

The Eastern Market’s Expansion Since 2009

(Source: IWSR, Daxue Consulting)
(Source: GlobalData Market Analyzer)

This BRIC’s (Brazil, Russia, India, China) driven expansion will continue to have two major impacts. The now truly global marketplace includes a wide range of participants whose primary currency is not GBP Sterling. Consequently, the fine wine market responds well to a weak pound, providing routes for timely liquidation all over the world. In addition, the continued exacerbation of the supply and demand imbalance, which underpins favourable price development, does not look likely to wane. As more new hyperwealth is generated within these BRIC’s nations the market looks set to march on. The number of individuals looking to enjoy and own the old world trappings of success is, and will continue to, rapidly increase.

The Expansion of BRICs Appetite For Imported Wine

(Source: Wine Australia)