See full version: How to Invest in Wine
Even with powerful wine brands, scarcity can drive prices higher. As an example, in 2012, Domaine de la Romanée Conti in Burgundy produced fewer than 4,500 bottles, which now sell for upwards of $13,000 per bottle; by comparison, First Growth Lafite from Bordeaux reliably produces 15,000 to 20,000 bottles per year, which sell for closer to $500 per bottle. 9
Potential investors should also consider the costs of building and maintaining a wine cellar. “Improper storage can destroy asset value,” says Curtis. Between the costs of a cooling unit, racking and installation, starting a wine cellar could cost $10,000-$15,000 in initial outlay, with additional annual maintenance upkeep and insurance costs. 12
14 Hay, Colin. “Buying En Primeur Wines.” Decanter, 14 May 2018 [links]
There are as many reasons people wish to own a winery in British Columbia as there are wineries. Often times, the allure of “lifestyle” can drive some to invest before understanding the amount of capital, time and active work it will take not only to get your first wine released, but to continue year after year as a business. Many find that the initial amount of capital they budgeted for runs out before the winery opens. Many impulsively purchase a property and then seek advice on how to get started, whereas to be successful in the industry that order should be reversed.
The information below is meant to give a better understanding of the process and its complexity, but it is not a step by step roadmap. It is not possible to explain every possible pathway a winery owner will take to get from idea to launch. Instead, this document is set up as a checklist with three stages: Idea to Investment, Ownership to License, License to Launch. There are no definite lines between these stages, they flow into one another and overlap. They are meant to illustrate the homework that should be done before investment, the organizations that will be involved along the way and the foundation you will need to build before selling your first bottle.
Advice from wineries owners who have gone down this pathway before you includes: [links]
What exactly will investors own if they invest in the Hemelzicht Vineyards venture? here
How will dividends be issued to shareholders?
20% of the wine production is declared as dividends to shareholders, which will be 220+ bottles per share by 2026.
Shareholders will own equity in the company that owns the wine estate land, the brand,villas and winery. here
Below is a brief Q&A with Peens which further explains how the model works. more
Be sure to include the electricity costs to run your wine coolers in your budget. The best way to calculate the estimated cost of electricity use is to check energy ratings of the wine coolers you are considering buying, and then relay this information to your electric company to see what it would average per month. more
To properly store wine, you need a dark area with optimal temperature and humidity levels. This can be accomplished in your basement or a dark closet if you live in a moderate climate. To decide whether your area of the country is suitable to store wine, talk with wine cellar managers in your area. If you don't have optimal conditions, you will need a wine cooler, which for a large collection could run into thousands of dollars. You'll also need substantial space. more
Expensive wines are considered valuable items, similar to jewelry. You will need to discuss with your home insurance company how to cover your collection to its full value, which will most likely include adding coverage for valuables. You will want to compare prices for wine insurance from other carriers as well. Remember to consider the deductible amount, the coverage amount in relation to the value of your collection and the cost of the insurance policy. more
If you graduate to selling a valuable wine in the future, most of this is done through auction houses. The commission charged varies quite a bit between an online auction house, such as winebid.com or winecommune.com, and Sotheby's or Christie's. However, before you decide to go with a cheaper online alternative, make sure the sale prices of the wines you wish to sell are similar. If you have a wine currently going for $10,000 a case at Sotheby's and $5,000 at an online auction, the difference in commission costs is worthwhile. You can find bid prices for online auction houses on their websites, but brick-and-mortar auction houses will require a phone call to acquire more details.