Champagne Investment For More Than 5 Years | Magnificent Returns Have Set The Stage

Champagne: The home of refined bubbles. The wine connoisseur's favourite destination. The investor's El Dorado. Champagne is a region in France where sparkling wine has been produced for centuries, and only if the wine comes from here can it be labelled with the exclusive designation: Champagne.

Recently, you could read the article Top 5 Burgundy investments of the past five years here on the channel. In it, we argued that while the world was looking at Bordeaux, we started recommending Burgundy as the new investment mecca. Then, as the wine world went Burgundian, we started looking towards Champagne, where the quality is high, but the price did not yet reflect that fact. Prices have come a long way since then, but they are not yet on par with their quality counterparts from Burgundy.

The Champagne category has received a huge boost in recent years, resulting in significant returns. Below you can see performance examples from six of the biggest Champagne houses. Six examples that are all representative of their strong brands. Common to all of them is that they have been under the management of RareWine Invest for five or more years, which also means that the latest releases from the houses are not represented in this article, although several of them have already performed well.

It is also worth considering that multiple releases from the same Champagne house may well have delivered returns as good as those represented below. The following are simply chosen to illustrate the trend we have witnessed over the past half decade.

2005 Jacques Selosse Millesimé: +278%

When Anselme Selosse took over the Champagne house Jacques Selosse from his parents, few would have thought that he would single-handedly revolutionise Champagne. He did, and he is recognised as having started the great grower movement that has since infiltrated Champagne. With Anselme came a quality boost and a significantly greater focus on the simple terroir. The Champagne house of Jacques Selosse epitomises extremely high quality and extremely low supply. Therefore, it is no wonder that Selosse-Champagne has seen some of the highest returns in recent years.

In five years, the 2005 Jacques Selosse Millesimé has increased 278%, which corresponds to an average annual return of 30%. It gets 96 points from Richard Juhlin, 95 points from Wine Advocate and 96 points from Vinous. Until 2007, Millesimé was a blanc-de-blancs made from grapes from two small parcels, but today a Millesimé can contain wines from any parcel - the grapes just have to be good enough. Only around 4,000 bottles are produced per vintage, which is why a Millesimé is extremely rare - and extremely sought after. Hence the big price increases.

2002 Salon: +225%

Every Champagne connoisseur is familiar with Champagne Salon, whose distinctive and eye-catching golden 's' forms the foreground of a bottle-green label. Eugénie-Aimé Salon made history when he created the very first Blanc-de-Blanc. A Blanc-de-Blanc that is only released in exceptional vintages, and only 60,000 bottles per vintage. By its very nature, there is no such thing as a bad Salon, which is why it is released with massive inherent demand.

Salon rarely makes its arrival on our investment platform before it is placed in portfolios, and this is actually very illustrative of why the prices of all Salon releases have generally performed well in recent years. In five years, 2002 Salon has risen 225%, which corresponds to an average annual return of 27%. 2002 Salon receives 97 points from Vinous, 95 points from Wine Advocate and 96 points from Richard Juhlin, which means that across the points from the three critics, it scores 96.8 points - and is only beaten by the legendary vintages 2008 and 1996.

2009 Louis Roederer Cristal: + 138%

A quick search for 'Cristal' on rarewineinvest.com replaces the site's otherwise blue-toned colour universe with a golden foil shimmer that characterises the iconic Cristal bottle from the renowned Champagne house Louis Roederer. Cristal is an investment favourite, largely due to its almost consistently high level and excellent return performance. Seven years ago, the first 2009 Cristal rating was entered into our system, and since then the price has risen 138%, equating to an average annual return of 13%. 2009 Cristal scores 96 points from Vinous, 95+ points from Wine Advocate, 97 points from James Suckling, and 97 points from the Champagne guru of them all - Richard Juhlin.

If you are wondering why the 2009 Cristal is being used in this example instead of the already legendary 2008 Cristal, it is because of two things. The 2009 Cristal was the first time Louis Roederer launched a vintage Champagne out of chronological order. Thus, 2009 Cristal was released two years before 2008 Cristal because the house's vice president and chef de cave Jean-Baptiste Lécaillon thought 2008 needed more time on the lees. The second reason is that there was an extremely high hype around the release of various 2008 Champagnes, which is why the release prices also jumped. In five years, 2008 Cristal has increased 51%, which equates to an average annual return of 9%. And while this has certainly passed, the 2009 Cristal has (so far) performed only slightly better, which is why it is highlighted here.

Did you know that Cristal was created because Tsar Alexander II of Russia wanted the best Champagne the world had ever seen? He also ruled at a time when the threat of assassination was omnipresent. Therefore, the bottle had to be made of clear crystal so that it could be quickly spotted if the contents of the bottle were poisoned. The bottom of the bottle also had to be flat so that a bomb could not be hidden here. And of course, the label had to be made of gold - worthy of a tsar. The story of Cristal is marvellous, and even though the bottle is no longer made of crystal and the label is no longer made of gold, Cristal is still one of the world's best Champagnes.

2004 Comtes de Champagne: +109%

“Taittinger seems to be on a huge tear of late. The wines have never been better” Antonio Galloni, Vinous, in the evaluation of the 2004 Comtes de Champagne.

Taitinger's history dates back to 1734, when Jacques Fourneaux founded the house, and today they are one of Champagne's great and honourable houses. They are known for producing some of the finest Champagnes in the world and the quality is sky-high. The house's prestige cuvée is Comtes de Champagne - a blancs-de-blanc that rivals the absolute best Champagnes in the world.

2004 Comtes de Champagne scores 96 points from Vinous, 96 points from Wine Advocate and 96 points from Richard Juhlin. In this millennium, only 2008 Comtes de Champagne from the great benchmark vintage has received more than 96 points from Richard Juhlin, which only emphasises the quality of the 2004 vintage. In five years, 2004 Comtes de Champagne has increased 109%, which corresponds to an average annual return of 16%.

Dom Pérignon P2 1996: +98%

When listing the world's great Champagne brands, there is no doubt that Dom Pérignon takes the title as the most popular in a broad sense. The distinctive shield-shaped label has found its way into many nightclubs over the years, and mass consumption on a daily basis is therefore an inherent element of Dom Pérignon's Millesimé release.

Dom Pérignon is a world-renowned brand, and its marketing is certainly not hurt by the fact that Dom Pérignon is now owned by the world's largest luxury conglomerate, LVMH Group, which of course is always on the lookout for profit. Of course, Dom Pérignon has not built fame by building castles in the air - their fame has come because their quality is top-notch. And here you have the three key ingredients for a good investment: high consumption, high quality, and high demand.

Dom Pérignon is also a Champagne brand that often appears at RareWine Invest - in many different forms, although their Millesimé is the most frequent. Dom Pérignon P2 1996 has risen 98% in 5 years, which corresponds to an average annual return of 15%. P2 is a term for a late disgorged version of Dom Pérignon Millesimé. P2 is released after 15-18 years, so it is not a release the world gets to enjoy very often.

Dom Pérignon P2 1996 receives 97 points from Vinous, 95+ points from Wine Advocate and a whopping 97 points from Champagne expert Richard Juhlin, which is the highest score he has ever awarded a Dom Pérignon P2.

1998 Krug vintage: +82%

Of course, the knowledgeable Champagne connoisseur has long since realised that Krug also features in this article. Krug resonates with quality in Champagne land and has long since cemented its deserved status as one of the absolute leading producers in this area.

Like Dom Pérignon, Krug is owned by the LVMH Group and Krug is one of their crown jewels. And just like Dom Pérignon, Krug has achieved its great fame because the quality of its Champagnes is unquestionable. Of course, this is also why Krug is a welcome investment favourite at RareWine Invest - regardless of release - regardless of vintage.

For example, the 1998 Krug Vintage has returned 82% in five years, which equates to an average annual return of 13%. It scores 94 points from Vinous, 95 points from Wine Advocate and 96 points from Richard Juhlin. Krug Vintage is only released in vintages where the quality is sublime. It is also estimated by Wine Advocate that the 1998 Krug Vintage's drinking window extends from 2012-2038. So here we are dealing with a wine that gets great points. A wine whose volumes are probably significantly reduced from the market. And a wine whose longevity speaks in the investor's favour. And as we all know, the biggest price increases are seen when the volumes have disappeared from the market.

The Future Of Champagne Investment - What Can We Expect?

It cannot have escaped anyone's attention that the world is in an economically turbulent time, which of course also affects the wine industry. However, there are still some persistent mechanisms at work in the Champagne category, including a persistent imbalance between supply and demand.

Bloomberg reports that LVMH's market capitalisation has exceeded 500 billion dollars, making it the first European company to reach that milestone. The reason for this is partly due to the strong euro, but also a booming luxury goods market in China. Research and consultancy firm GlobalData predicts that the wine market in China will double by 2026. This growth is mainly due to the fact that China's Millennials and Generation Z will be the wine drinkers of tomorrow as their purchasing power increases.

According to the Champagne bureau, more than 33 million bottles of Champagne were shipped to the US in 2022. In terms of value, exports to the US alone increased by 58%. Add to this the fact that total worldwide Champagne shipments totalled $6.6 billion, of which the US drank close to $1 billion. And even though the US seems to be sitting heavily on the throne, and China was only the 14th largest export market for Champagne in 2021 according to the Union des Maisons de Champagne, it is interesting to follow the development of the Chinese market according to the above prediction.

Champagne is a dominant luxury product characterised by high consumption. Furthermore, the rare high-end grower Champagnes are the subject of massive demand from the world's connoisseurs. Add to this the fact that Champagne has an extreme saving potential, and as quantities are slowly reduced from the market - the more the price will eventually rise. We therefore continue to recommend Champagne as a long-term investment - even if inflation puts a pause on price increases for a while.