The strong performance of Champagne over the course of the last five years is evident – it has been, forgive us for being on the nose, sparkling. A result of supply being overwhelmed by global demand, this is true of back vintages and reflected in the price of new releases (primary market). The general trend is up. We noticed four years ago major houses complaining about future supply and forecasts, and in some cases, they began clandestinely buying stock back from the secondary market to help guarantee future key provisions.
This translated into material growth in 2022, with the Liv-ex Champagne 50 seeing an overall growth of 12.5%. The most notable names out of the Champagne indices in 2022 were Bollinger La Grande Annee ’12 which grew by +16.1%, Dom Perignon ’10 by +15.1% and Krug Vintage Brut ‘03 by +23.1%.
These figures however pale in comparison to the 2-year and 5-year figures, those being +59% and +88.5% respectively. The main performers being the previously mentioned Bollinger, Dom Perignon and Krug with increases of 34.3%, 70.5% and 89.6% respectively at the 2-year mark. For the 5-year mark, Bollinger ’07 grew by +83.2%, Dom Perignon ‘09 grew by 103.1% and Krug ‘03 grew by 125.8%.
Taking a moment to reflect on this and looking ahead, one must consider that the permitted harvest yield in Champagne has been below the average permitted supply between the 2007 and 2022 vintages. This correlates to the wine releases from the 2013 vintage onwards until present; couple this with increasing demand and the result is lower stock levels for years. The impact of this is forward looking – we are only now seeing the release of the prestige 2013 Champagnes in 2023.
The keen technical eye might notice in the chart above that we have seen a slight dip, a 5% decline over the months of December and January 2022. This is not unusual and often observed as the Asian market slows coming into the New Year and the demand in Europe softens short-term after the Christmas flurry.
Given the market dynamics, the incredible sustained trend and price trajectory, this should prove as a strong buying opportunity and a short-lived discount. Stocking up on top Champagne is wise given the thesis for the next decade. Our team are at present keenly parceling up some of the leading names for you to stock up on, and support your portfolio growth over the coming months and years. Speak to us for tailored advice, or explore Champagne currently available here.