- Champagne has been one of the best performing themes of the last 2 years. Surpassing Burgundy in August 2022, as the top performing region.
- As an investment metric for Champagne, vintage perception is far more important than score. The 2014 vintage is rated as “Outstanding” by the Wine Advocate.
- Louis Roederer is one of the region’s most prestigious and sought-after producers. It is a proven investment performer, especially in ‘top’ vintages.
- Champagne has recently experienced an explosion in demand, and with only a finite supply available, prices have skyrocketed.
- Our market intelligence cautions us to expect large price hikes for the upcoming 2015 vintage. These will make top scoring back vintages like 2014 even more appealing.
2020 Production Cuts Set Scene for Champagne Bull Market
The COVID pandemic had a significant impact on Champagne, with production capacity significantly affected. The Comité Interprofessionnel du Vin de Champagne (CIVC) reduced the annual limit on Champagne production in 2020 by 25%.
Once lockdown restrictions ended at the end of 2020, Champagne demand re-emerged from newly re-opened on trade premises. This sudden increase of demand met a reduced supply curve which resulted in a scramble for available stocks. This imbalance was, in our view, the main driver of the remarkable price performance of Champagne in 2021 and 2022.
Champagne Eclipses Burgundy in Price Performance
Champagne shares with Burgundy a strong tendency for demand to exceed supply. Over the last two years, Burgundy and Champagne have competed for best performing region status. Recently, Champagne has edged in front with a sensational 68% price appreciation between Jan. 2021 and Dec. 2022).
Latest Cristal Releases Have Skyrocketed in Price
The last three releases of Cristal (2013, 2012 and 2009) serve as a useful comparison for the 2014, as they are of comparable quality in terms of vintage perception and Wine Advocate score.
The table below demonstrates the clear pathway for price growth as Cristal ages. Luxury Champagne benefits from having a much wider appeal than comparable quality still wines and is also able to be enjoyed much younger. This combines with little to no stock being held back causing a supply shortage as the wine ages resulting in higher prices.
Vintage is the Best Indicator of Investment Potential in Champagne
For investment purposes, you need to buy Champagne based on vintage, as opposed to score. Vintage perception is more important in Champagne than in any other region. Since the turn of the Millennium, there have been 11 vintages rated as “Outstanding” or above by Wine Advocate:
2014 is the Best Cristal ‘Buy’ – Hong Kong is Best Price
Having established (as if it were necessary) the investment credentials of Cristal, and of the 2014 vintage, the investment case for Cristal 2014 is simple.
In a few markets around the world, the 2014 vintage is still available at the original release price.
One of these markets is Hong Kong, where the pricing of Cristal 2014 represents an exceptional entry point:
Two Strong Short-Term Price Catalysts
China (and Hong Kong) recently lifted almost all Covid restrictions which should result in a pronounced increase in demand as individuals begin to socialise and celebrate again. Cristal 2014 is the cheapest vintage on the market, and as it is ready to drink now, we believe this one will see an immediate spike in demand from on-trade premises.
We also have intelligence that suggests that the upcoming Cristal 2015 vintage, which is expected to come to market in early summer this year, will be released with a significant price increase. This will likely put upward pressure on all back vintages, the 2014 especially.
Furthermore, once vintage roll over starts from 2014 to 2015, supply direct from Louis Roederer of the 2014 will drop almost overnight to zero, which usually results in an instant tightening of the market.
Cristal 2014 is a Great Long-Term Hold – But Hong Kong Offers Best Entry Price Right Now
We therefore encourage all collectors to look at purchasing Hong Kong landed Cristal 2014. We like Cristal 2014 in general as a medium to long-term play, but the price and near term re-opening catalyst in Hong Kong makes this the most attractive market in which to place this bet.