During shelter-in-place, alcohol sales skyrocketed as millions of Americans entertained themselves at home. The rise in alcohol sales got me thinking about whether there is an investment opportunity in wine. After all, when times are good, people drink. And when times are bad, people might drink even more!
It just so happens there is a way to invest in fine wine via a platform called Vinovest. As someone who is a fan of wine and lives only 1.15 hours away from Napa Valley and Sonoma, I am excited to learn more about their platform.
Vinovest Review: Investing In Fine Wine
Investing in the stock market over the long term is a tried and true way to invest for your future. However, the stock market is volatile. As a result, some investors have turned to alternative investments to diversify their portfolios.
Fine wine investing has gained visibility recently as it is now an asset class available to everyday investors. During the first quarter of 2020, wine prices grew +1.10% while the S&P 500 tanked.
Thanks to the aging process of wine, there is a nice tailwind when it comes to investing in wine.
Investable wines are intended to age between 35 to 50 years, generally increasing in value during this time period. However, price will obviously also depend on buyer demand.
Vinovest states that “wine has outperformed the S&P for the past 30 years, including during downturns.”
Below is a graphic from Vinovest that shows how fine wine performed against other asset classes during the 2008 recession.
There are ultimately three factors that drive wine values over time:
- Brand equity
What Is Vinovest?
Vinovest is a new online platform that provides opportunities for any investor to invest in bottles of wine through their networks and partnerships with established wineries.
Their team includes world-class wine experts (sommeliers), software engineers and designers, and data scientists. They recommend the best wine options for your individual pallet and investment portfolio preferences.
In addition to the technology and personnel, Vinovest provides the infrastructure you need to for storing wine. They ensure that your wine investments are kept in safe conditions at optimal temperatures. So by investing, you essentially have the use of an off-site wine cellar.
|Annual Fee||2.5% to 2.85%|
|Average Liquidity||4 to 6 weeks|
|Advisor Access||Investors with account balances above $50,000|
How Does Vinovest Work?
If you want to get started with Vinovest, here are the steps to follow:
- Step 1: Set aside a minimum of $1,000 for their standard offering or a minimum of $50,000 for their custom offering investments.
- Step 2: Sign up online in minutes and share your risk and investment preferences.
- Step 3: Choose your bottles of wine on the platform or have sommeliers make the choice for you, and make your purchase.
- Step 4: Store your wine with Vinovest or request to have it sent to you to enjoy.
- Step 5: Monitor your portfolio and make requests on their online platform.
- Step 6: Years down the line, you can sell your investments to achieve the best return possible.
Vinovest says their team and their algorithm is actively looking for wines from established wine growing regions such as Bordeaux, Burgundy, Napa as well as up-and-coming regions and newer wineries all around the world.
Here are a couple of strong performers over the past year:
- Armand Rousseau Chambertin Grand Cru 2013, up 114% in the last year
- Sassicaia 2015, up 55% in the last year
Pros of Vinovest
Here are some important reasons to consider investing in wine with Vinovest.
1) Uncorrelated Asset
The stock market has a low correlation with fine wine investment performance, which means that movements in the stock market tend not to affect the returns from Vinovest. This is beneficial for those who want a less volatile addition to diversify their portfolio.
2) Portfolio Diversification
Alternative investments like fine wine make a unique addition to any investment portfolio. Vinovest provides the chance to diversify your portfolio in something typically less risky than the stock market with a history of exceeding returns.
3) Expertise Meets AI
By combining some of the world’s best wine experts with AI technology, Vinovest helps you make data-driven decisions on the best wines to add to your portfolio while also taking your risk tolerance, investment time horizon, and investment amount into account. You can be completely hands-off if you’d like to be, without even touching a bottle of wine.
4) Safety and Storage
Vinovest provides world-class facilities you need to store your wine over time. It is climate controlled and monitored 24/7.
5) Guarantee and Insurance
Vinovest inspects every bottle for authenticity so that they can guarantee your wine’s source. Additionally, Vinovest insures each bottle of wine at full market value to protect your portfolio from catastrophic events or other unforeseeable circumstances.
6) Non-Accredited Investors Welcome
An accredited investor “is a person or business entity who is allowed to deal in securities that may not be registered with financial authorities.”
A person or couple must meet one of the following specifications to be considered an accredited investor:
- Individual income of $200,000, or joint income of $300,000 for the last two years and expect to earn the same amount or more in the current year
- Joint or individual net worth above $1 million
- Individual is a general partner, executive officer, director or combination of these for the entity issuing the unregistered securities
These stipulations are very hard to meet for the average person, which is why Vinovest welcomes non-accredited investors to their platform. This breaks down the barrier of entry to provide stock alternative opportunities to a greater population. Individuals are able to diversify their portfolios with as little as $1,000.
Cons of Vinovest
Here are some disadvantages to investing in wine with Vinovest. Depending on your time horizon, risk tolerance, and asset allocation, this may deter you to look elsewhere for a stock market alternative.
Vinovest charges a 2.85% annual fee on your portfolio value, which is reduced to 2.5% for portfolios larger than $50,000. A $5,000 investment in fine wine would result in a $142.50 annual fee from Vinovest.
If you compare this to a stock market index fund, it is much higher. Compared to other alternative investments, the fee is in-line. The fee includes setting up sufficient wine storage with the proper humidity and temperature control. In addition, the fee also covers the cost of dealing with shipping logistics all around the world.
Wine is not as easy to liquidate since it is a physical item. You might have to wait to find a buyer or consume the wine yourself.
However, if you want to capitalize the value of your wine investment, Vinovest will handle the transaction for you in about 4-6 weeks due to their connections with networks of other professional investors, funds, importers, distributors, and retailers. This grants you access to the global demand for wine.
You may have heard the saying that wine gets better with age. That’s why investing in fine wine is meant for investors who would ideally like to invest for a minimum of three years. This allows enough appreciation on the bottles to occur due to becoming more scarce because of global consumption.
Vinovest recommends wines that age for 30 to 50 years before they reach their peak drinking window. This means that the wine will likely increase in value over time and you won’t see your return until part or all of your portfolio is sold.
While the sommeliers at Vinovest will recommend the best times to buy and sell wine, you’ll ultimately have the final decision.
4) New platform
Wine investing for all has not been available to the mass market for very long. Vinovest started in 2019.
Who Is Wine Investing For?
Vinovest opens its fine wine opportunities to all investors, making this an ideal option for anyone who wants to diversify their portfolio and offset stock market volatility.
While wine connoisseurs may already have a passion that urges them to pursue these investments, an investor does not need to have any knowledge about wine in order to get started. Vinovest can help you either way.
If you’re looking for a nice bottle of wine to enjoy with family and friends, try a local store. But, if you’re looking for a long-term alternative investment that’s uncorrelated from the stock market, Vinovest may be the right choice to diversify your portfolio.
You won’t get updates on their value by the minute, daily or monthly, but it is good to know that fine wine has averaged 11.6% returns for investors since the mid-1980s.
While you shouldn’t put all of your wealth in fine wine, it may be worth it to those who want to add alternative investments to the mix. You can choose from a variety of brands, types, tastes, and aromas that match your choices in time horizon, risk tolerance, and asset allocation.
If Vinovest sounds worth it to you, you can get started here.
Readers, are there any wine buffs out there who have been investing in wine for years or decades? How you decide between wanting to drink your wine and letting it appreciate in value as it ages? What are some of your favorite wine investments and wines to drink at a reasonable price? I’ve asked Vinovest to answer any questions in the comments section.
Vinovest Review is a Financial Samurai original post. I really enjoy investing in private funds. Private funds are less volatile so you can better life your life without distractions.
You can check out my Top Financial Products page for more great products to help you make more, save more, and live a better life.
I wanted to follow up with an actual testimony of what happens with this particular product. I invested a lump sum in January and dollar cost averaged monthly for a few months. The majority of the time there was a large cash balance that was not earning appreciation month over month $5000 to $10,000. I would nudge them as I know they’re a small operation. “Hey, um, you guys going to buy some wine?” “Oh, yeah, we are curating your collection” 24 hours later they’d do a massive purchase after a reminder I existed.
$28,000 Initial Capital Invested in January, DCA $500/mo.
Fees YTD: -$357.73
Est. Appreciation YTD: -$262.70
Thats fine, not all asset classes appreciate and ‘over time’ they tout they’ll beat the S&P 500. The piece that gives me pause is that today I received a marketing email with a YTD return of 11.5%.
I asked to liquidate my account about a month ago as I’m suspicious this is just a pyramid scheme. Transitioning the wine allotment from one unhappy customer to earn their fees. As they’ve liquidated my account, they’re selling the wine at a deep discount.
I’m sure readers would appreciate one testimony (I’m sure there are others that have had a more positive experience). I’m hopeful Vinovest evolves to be a bit more consumer centric and transparent with their operations.
Financial Samurai says
Thanks for the feedback. When you asked them to explain your return with the 11.5% YTD return, what did they say?
Thanks for the article, I just seeded a small invested. I own a vacation house/rental in Oregon wine country and consider Carlton, Oregon to be a second home. The property values in up and coming wine towns are something to consider, we’ve had a huge appreciation over the last year outside of normal statewide property appreciation. Its a phenomenal time to see the wine industry’s ingenuity, creativity with crazy challenges that forest fires, pandemic making this resource all the more scarce. I’m a fan of supporting the wine industry (especially the lesser known Oregon AVA). I see a lot of California love on the responses, just wanted to plug the little brother to the North! I threw my VRBO link in the website in case you’re interested in checking out Carlton :)
I put in 5k my account grew to 6100. I paid 190 in fees durring that time and when I liquidated my account dropped to 5500.
The fees are too high and It’s a bit of smoke and mirrors with how much your wine is worth.
The majority of your return is built in because they buy wine at a discount.
Great idea. I just signed up & will let everyone know how it goes. Couple questions:
– Any plan to open a mobile application?
– How often the bottles/your portfolio will get revalued?
– What if a bottle is shipped to me 10 years down the line & it’s gone bad? (assuming that’s the risk any investor takes, but wasn’t sure if there are any safeguards in place)
– After $50,000, you get access to an Advisor. Possible to shed some light on this?
All in all, sounds great & the platform design is very intuitive.
I read somewhere (from another blogger) that they might look at a mobile app down the line.
I’ve been with them since early September, so I need to ask them about re-balancing. One thing that I did find was that the cost basis for the wines that they bought for me are significantly lower than retail. So that would be nice if I want to sell, they would sell at retail for me.
They talk about being insured at the storage facility, but I don’t know about assurances in regards to it possibly going bad if sent to be consumed.
50K gives you a more attention by an account manager( don’t know what that really is) and some perks. I only invested 5K to try it out.
Only annoying thing is that it took them 2.5 weeks to purchase the wines with 4800 dollars. I still have 200 bucks in cash left. I highly doubt they’ll be able to buy anything with the remaining 200 bucks.
And they’ve been sending me emails to invest more so I can buy more pricier wines that can appreciate more. So I’m wondering if I put another 5K in, are they going to sell what they already purchased for me and then use the 10K to buy more expensive higher appreciation wines?
They’re chat box is helpful at times (depending on who responds). Haven’t really had a chance to take some time to call them to see what they plan to do in regards to Portfolio rebalancing.
Bear with me, since I’m just a casual wine drinker (Pinot’s my favorite), so I’m really not an expert. For all those invested, do you find the description of what was bought not complete? For example, “Chateau Fuisse, Pouilly-Fuisse 2017” was assigned to my portfolio today. But when I tried to look this up online to see what the retail price is, there’s more varieties under the “Chateau Fuisse, Pouilly-Fuisse 2017”. So I don’t which one this is.
Tim M says
I just read this article because I just invested $1,000. Probably should have read it prior. My worry here is that as beautiful as the website is and as much as the concept seems great. There just isn’t a proven track record for these guys. Looking at Linkedin, it seems like there are only 3 employees with everyone else marked as an investor? Great to see that they had a great seed funding round, but not many companies make it out of seed. Alas, I gave in because of how well designed the site was and have been interested in wine.
OK, so I was intrigued by this and took a small position. It’s now been 3+ weeks. My money is still not invested into anything. I contacted a few days ago and they said it would be finished by Wednesday, my portfolio is still pending (the money isn’t, that deposit did complete fairly quickly). I don’t invest money to let it wait around and not grow. I also didn’t appreciate no warning when it was taking longer than normal (they estimate a week) to fill the portfolio. To me this is pretty unacceptable and I’ll probably be pulling my money out soon. A bummer as this looks like a quite appealing alt investment.
After a ton of emailing I did finally get the wines put in the portfolio. I guess we will see how it goes. As a side note I have gotten interested in homebrewing wine since my boyfriend has the stuff (he used to make mead and cider). Wow, it’s really cost effective and pretty easy to do. I guess that’s my next investment (like $100 for 30 bottles…what.)
After reading this article and checking out the reviews i am planning to invest in vinovest . the only disturbing thing i found is the time taken by company to complete the portfolio . does the company provide with a time period within which our portfolio is supposed to be completed ? eager to know how much time will it take to get my money invested ??
I just put some money in on Sep. 7. It cleared on Sep. 9 and they did say that it’ll take two weeks for them to invest my money. That same night, an email from their team said that a small portion of my money was used to purchase 3 bottles of wine. This morning (9/12), I received another email saying that another portion of my money was used to purchase some wine. So that’s about 20% of what I put in. It looks they’re trying to find opportunities when they come for each investor.
I signed up and sent them my money a few days back. still haven’t heard anything
I ended up investing $1,000 on Vinovest because of this article. My deposit has been taken and now they say that they are sourcing my wines using their algorithm. I opted for an aggressive growth strategy.
“Most wines are intended to age between 35 to 50 years, generally increasing in value during this time period. However, price will obviously also depend on buyer demand.”
This is entirely false. Most wine is meant to be drunk within a year or two of its release.
While I don’t disagree that fine wine can be an excellent investment vehicle, the relatively finite number of brand names that are appropriate for investment quality holdings make the sector difficult to approach. If you’re not working with a seasoned wine investment professional, I would stay away. Master Sommelier titles are great for marketing a service like VinoVest, but most don’t have any experience in the investment side of the industry, and hardly any in counterfeit/fraud detection services.
I say this as a Master of Wine student with extensive experience in the wine industry.
Not true. Most wine of any provenance (bordeaux, burgundy, champagne, quality napa cabs, barolo’s, brunello’s, etc.) are meant to be aged for a number of years.
Connor Hudson says
No this is incorrect. I work as a wine buyer for the largest private wine retailer in America. It is true “Fine” wine has the potential to age well. the “most” generalization is the red flag. Most wine sells for 12-15 dollars retail and has a shelf life of less than 3 years in most cases. This depends on grape varietal of course, but over all white wines age very poorly and only specific red varietals will age well. The racking and fermentation process will typically be the decision piece to all this. New world wine uses a lot of added sugars to give the fruit forward taste you typically get out of man Norther coast wines (CA). hopefully this helps. I would say private investments into key wines WILL have a higher return rate. The best benefit of this platform is the fact they insure their bottles. Many times when aging wine…even correctly… there will be issues. Hope this helps.
Dame Hobbs says
Great post! I appreciate the insights of investing in wine. The more we can learn about new investments, the better.
Rachel Bier says
I live in the Napa Valley and have worked for a high end Napa & Bordeaux wine collector for over 10 years and it’s definitely an area of personal interest. I’d be concerned with a couple of things…access to purchasing high end wines and fake wine.
The cult Napa Cabs have extremely limited production with minimum 2 yr waiting lists and high purchase price due to scarcity. The key is identifying new upcoming producers and buying early, however, this is extremely difficult and may be where the algorithms give Vinovest the edge over regular collectors. In addition, Napa is already struggling with an oversupply of wine and being relevant to younger wine drinkers that aren’t buying into cult wines with the same enthusiasm as the past 20 years.
European wines have held their appeal especially as the Chinese market opened up a slew of new buyers and prices have sky rocketed, however, this has led to a glut of counterfeit wines on the global market. Rudy Kurniawan’s counterfeiting activities (Sour Grapes, Netflix) has flooded the market with counterfeits and provenance is more important than ever before.
All this being said I definitely like the idea behind Vinovest and may have a little dabble myself!
Financial Samurai says
Very interesting! I definitely have heard about prices skyrocketing due to Chinese luxury demand. Thanks for the tip on the Netflix documentary. I’m definitely gonna check it out.
Looks like Napa and Sonoma have opened up!
There’s also a great book called In Vino Duplicatis that gives a lot more detail about Rudy’s exploits. It’s fascinating how he managed to con so many high net worth wine collectors.
The Valley is definitely back open for business, downtown St Helena has a lot of foot traffic and many SF folk have rented places for the summer!
Financial Samurai says
BTW, watched Sour Grapes. Entertaining! One of my old clients had a 1 second cameo in it. Funny. He was totally a wine buff.
Wine Lover says
I had a client who got burned by Premier Cru in Berkeley. Following that case, I’ll never leave any wine I’ve paid for in the hands of someone else.
Anthony Zhang says
Hi there, I’m Anthony, one of the cofounders of Vinovest.
Fraudulent wine is certainly a risk in this industry.
That’s why we either source wine directly from the winery or from wine stored in a professionally bonded warehouse where you can see the audit trail of previous owners, how long they want to pay for, and be able independently to trace it all the way back to the winery.
Some Questions: 1) Are the stated returns before or after fees? 2) How is volatility in the wine market measured? How do we know volatility is less than the DJIA? 3) How is Vinovest uncorrelated to the stock market? Vinovest returns mirror stock market returns in the provided charts. If it was uncorrelated, I would expect to see returns that are counter-cyclical, leading, trailing, etc.
Anthony Zhang says
Hi there! I’m Anthony, one of the cofounders of Vinovest.
1) market returns stated are prior to fees
2) we look at fluctuations in annual returns when factoring in volatility. For example, there have only been five down years in the last 40 years in the wine market, whereas the S&P 500 has had many more.
3) most investors are interested in how alternative assets correlate during market downturns. During the 2008 and 2009 crash, while equities plunged 52%, the wine index only went down to single digits. In Q1 of this year, when the S&P went down 22%, our index actually went up 1.1%
I second the prior comments this is an intriguing alternative investment and timely given the recent meteoric rise in equity prices and scarcity of discounted investment options in real estate etc.
In trying to evaluate platform risk, I would be interested to know if you have invested with vinovest and any insights regarding the team that founded and developed this platform given they started this company last year.
Anthony Zhang says
Hi there! I’m Anthony, one of the cofounders of Vinovest.
I would be happy to share more about our team/company.
My co-founder, Brent, and I built this company after becoming wine investors ourselves a few years ago. We quickly realized that despite its lucrative returns, there are still many barriers to entry to investing in fine wine.
We have got a world-class team of engineers, designers, data scientists, advisors and wine experts that have worked at companies like Apple, BlackRock, TikTok, 3 Michelin star restaurants and more!
Jim Bob says
I bought a case of Boone Farm for 60 bucks and sold it for 120 after the liquor stor near me in Detroit closed. Thats real investment gains.
Tiffany R says
You had me at Boone Farm. I’m intently doing my research on Vinovest trying to decide if this venture is the right investment for me. I always read the comment section because theirs a plethora of information one can glean off of when making such an important investment. Low and behold I come across your comment and utterly lost it. I was in hysterics immediately. I haven’t laughed that much in awhile. Thank you for reminding me that you can’t take everything so literal all the time. Well Played Sir. Well Played.
Hey Sam, another great article! I’m honestly glad to see you’ve got a new sponsored post out there. I think that’s one of the best ways for you to monetize this site so you can make some well deserved money off of the free readership. I also appreciate that you curate your sponsored posts and don’t just barrage us with credit card offers (although that would prob be a great money maker for ya). Anyway this platform seems really interesting. Did you happen to get any insight into the company’s financial position? I’m guessing no. My main concern would be that they go belly up in the next 3-5 years if they can’t keep financing whatever burn rate they are currently running at.
Financial Samurai says
Thanks Jon. I’m intrigued by wine investing partly because I like wine, have friends who collect wine, and LOVE the combination of buying an asset that potentially appreciate in value and be enjoyed.
This combination is really why I like real estate so much, and not stocks. When you can enjoy your investment, it makes that investment so much more worthwhile.
I’ve asked the founder to respond to the questions as I’m interested as well.
Anthony Zhang says
Hi there, I’m Anthony, one of the cofounders of Vinovest. We are fortunate to be backed by some incredible VCs and angels and are also currently generating revenue as a company.
Additionally, in the unlikely event that we do go under in a few years, investors will still be able to retain full title and control over their assets!
Fascinating! I never even thought about wine as an alternative investment. I knew a guy who started his own winery, but that’s a totally different ballgame.
It’s really cool how there are so many different niche investment products out there. One of my friends wants to be a sommelier so I’ll let her know about this. I bet she’d love it!
I don’t know much about wine myself but I do know it makes my bolognese go from good to amazing! ;)
I’m curious if the 11.6% return quoted is net of fees or not.
Agreed, I am also interested in the answer to this as well. Can’t seem to find the answer anywhere.
Anthony Zhang says
Thanks for your question Bill!
I’m Anthony, one of the cofounders of Vinovest. These returns stated are prior to fees.
Please let me know if there’s anything else I can help clarify.
This seems like a very niche investment. I enjoy wine, but I have no idea what would make a good investment. I guess Vinovest will help select the investment. I’ll go check it out.
Joe! A joke for you….
Q: How do you create White Whine?
A: Start with grapes that have very thin skin!
Seema Maheshwari says
That is a great idea. My only concern is the tariffs placed on foreign wines by Trump, which may or may not be repealed by other Presidents. Would this negatively impact my investment?
Anthony Zhang says
I’m Anthony, one of the cofounders of Vinovest. All of our wines our securely stored in bonded warehouses which are designated tax free zones.
This provides tax advantages to our investors so that they do not need to incur any additional duty taxes when buying and selling wine from around the world.
Robert C. says
What a interesting investment idea! Had a long conversation with a chef about how profitable fine wine was for his restaurant over a year ago. The key to being successful is getting vintages and wineries that are not readily available, but highly coveted. High end restaurants get access to that kind of wine. If this company get access to these wines and stores and insured them properly this could be a great investment. This is not for the average investor, but as someone who loves wine, and looking for a diversified asset this might be worth looking at.
Financial Samurai says
Sounds like the key to investing in fine watches actually. ACCESS to these more rare watches/wines is key.
Once you have your in b/c you know someone or bought enough to be on the priority list, access gets better.
Related: How To Buy And Sell Watches For Profit