Champagne: age drives strong and consistent returns

In the past five years, the Champagne 50 sub index - representing the most recent physical vintages of 12 champagne houses - increased 59%, outperforming the Liv-ex 1000, up 44%. In fact, Champagne has been the second best performing region, after Burgundy (up 86% in the past five years).

While Champagne has lagged Burgundy, as can be seen in the following chart, Champagne’s behavior has been much more predictable and consistent. This has been driven by a combination of powerful brands, widely available stock and accessible price points.

As champagne is consumed - often “too early” - and supply decreases, prices begin to rise. Last week, for example, William Kelley of The Wine Advocate published his review on the new releases of the Louis Roederer, including Cristal 2013. Scoring it 96 and suggesting a drinking window of 2021-2051, he writes: “Less introverted than its 2012 predecessor [which Kelley scored 97+ - R.S.], readers won’t regret trying a bttle of the 2013 Cristal young - even if I’d recommend forgetting some for a decade too”.

And indeed, market prices have a strong correlation to age. The chart below presents the average market price per vintage of the wines included in the Champagne 50 sub index, plotted against the age of the wine in years.

Given the positive characteristics, The Wine Capital has held an overweight position in Champagne, with a diversified portfolio across producers and age.