When one thinks about the history of wine, changes resemble small shifts rather than outright transformations. But today, wine is not just an enjoyable drink or a high-value good. To forward-thinking and ambitious minds, it is an investment that offers real reward due to its everlasting nature. In his role as CEO and founder of Oeno Group, Michael Doerr is entrusted with delivering that message to the masses. And beyond the potential profits available, the industry is making strides in accessibility that equally necessitates communication with prospective investors.
Michael Doerr lays out three keystones of this riveting progression:
Reserving and selecting
Previously, wine was distinct from traditional assets such as stocks due to its opaqueness. Put simply, one needed an insider’s knowledge to begin hoping their investment could be a success. It is arguably the biggest aspect of the industry that is changing right now.
“Investment companies now have product insight to rival their economic expertise,” Doerr said. “They recruit Masters of Wine as directors and ambassadors as well as investment experts with strong financial backgrounds. Today, it’s about approaching the industry with a fresh point of view while retaining leading insight.”
Providing world-class advice could significantly lower the barrier to entry for a new wave of investors. While the product is characteristically consistent, trends are always on the move, such as Bordeaux’s current decline in the market. People will no longer have to be sure of their personal judgment to start building a portfolio.
One of the sector’s less flashy but important shifts is coming in the area of exit strategies. One probably shouldn’t day-trade wine, that much is true, but ultimately all investments are judged on their value at sale. Reaching that point securely has previously been one of the biggest challenges for investors.
“For decades, fine wine merchants have been providing customers with portfolios and performance reports without having built-in exit strategies,” Doerr explained. “Companies with liquidation paths, such as hospitality clients like hotels, restaurants and private clubs and of course high-end retail customers, provide profitable pathways at the end of the investment cycle.”
The service many advisors provide begins and ends with initial portfolio creation. In the future, the masses will likely only flock to companies that can ensure a route to sale.
Putting a face to the grapes
Alternative investments such as wine and whiskey have historically shared the impersonality of stocks and shares. However, personalizing experiences could be central to their further rise. Bucking the trend of figure-based cycles, investors increasingly want to get a feel for the commodity they are trading.
“After the pandemic, most retailers were distancing themselves from their physical presence,” Michael Doerr said. “But the few companies that understand the market went against the tide and launched boutiques. Producers then benefit from showcasing their wines in person while clients appreciate the additional liquidation path.”
Oeno Group, International Investor Magazine’s Best Global Wine Investment Firm for 2022, has conducted virtual portfolio tastings, inviting producers to create video content for their wines and professionals to taste them. Further to the digitalized services of Oeno, the wine investment firm recently launched an app to extend their offering in portfolio management tools for their clients. One can still manage their portfolio and stay up to day with the value of their assets without necessarily having to meet their account manager in person. For the client, offerings such as these complement the permanent option to meet those who manage their portfolio. The sensation of tangibility makes their wine feel within their control, contributing to a greater willingness to invest.
With each development, wine industry specialists are changing the narrative on the beverage’s potential. Rather than adopt a traditional outlook, where investment, experience, and consumption are separate, the requisite parts intertwine to match or exceed the intricacy of stocks or cryptocurrency. Only nominal obstacles faced by all sectors in the current climate stand in the way of wine’s inevitable ascension to popular commodity status.