When people think about investing, they likely think of stocks or bonds. But the reality is that you have many more options!
One of those options is wine. Over the past 20 years, wine has proven itself as a solid investment.
There are primarily 4 reasons why wine can make a great investment:
- First, as a physical asset, it typically performs well through periods of inflation.
- Second, wine’s value is not highly correlated with the stock market. Wine typically holds its value through periods of market decline.
- Third, rare wines are made in limited quantities. This scarcity can drive the value up as it ages. Additionally, as people drink the wine, the already limited quantity is reduced even further.
- And fourth, wine can be an enjoyable investment for those that have a passion for wine.
So, the question is, how does someone actually invest in wine? How do they deal with storage? What about transportation? And insurance?
In this article, we provide an in-depth review of Cult Wine Investment, which is a platform that makes wine investing more accessible for investors.
What Is Wine Cult Investment?
Cult Wine Investment got its start in 2007.
Historically, wine investments, like other alternative investments, have been held in reserve for the ultra-wealthy.
Cult Wine began with a mission to make wine investments more accessible for all investors.
The company was founded in London and has since opened offices in Hong Kong, Singapore, ShangHai, New York, Toronto, and Dubai.
Today, they have approximately 1.25 million bottles of wine in their storage facilities worth roughly $360 million US dollars.
They also have clients in over 83 countries worldwide.
They believe that investing in wine should be as effortless as drinking wine. To do this, they employ a team of expert sommeliers and data scientists to make investing in wine simple and secure for investors.
The three major challenges with wine investing are finding invest grade wines, storage, and insurance.
With Cult Wine, investors do not have to worry about any of this. Instead, they get the opportunity to diversify their portfolio and gain access to an expert team.
Cult Wine currently offers investors 4 account plans starting at £10K or roughly $12K.
How Does Wine Cult Choose Investments?
The wine market can be difficult to navigate for the average investor. Because of this, many investors do not add it to their portfolio.
With Cult Wine, investors really do not have to know much about wine at all.
Cult Wine takes a 5-step approach to ensure the wine they offer to investors is top notch:
- Analysis: As part of their due diligence, the Wine Cult team conducts an analysis on both the macro and micro level. At the macro level, they look at trends in the market to determine where wine may be headed. At the micro level, they have identified 14 key points of data that help them identify individual bottles of wine or collections.
- Forecast: Using the data they’ve gathered, they predict trends and look to invest in regions where wine has the greatest potential to appreciate.
- Strategy: In order to ensure steady returns, they strive to build portfolios with a diverse set of wines from a wide range of geographic locations.
- Tactics: Their team regularly reevaluates market trends and portfolio performance to understand if trends are moving as predicted.
- Management: Through active management, Cult Wine’s team rebalances portfolios as needed.
This 5-step approach helps Cult Wine feel confident they are giving investors a great opportunity in wine.
Wine Cult Investment Plans
With Cult Wine, investors currently have 4 account options. Each plan comes with a different set of perks and fees.
Regardless of the plan selected, each investor will receive a custom-built portfolio with their risk level and time horizon in consideration.
Let’s review each of the plans in more detail.
- Account Minimum: £10K ($12,000)
- Annual Fee: 2.95%
With their starter plan you actually get quite a few perks.
- First, you benefit from storage and insurance of your portfolio. In addition to the managed portfolio built custom to your risk level and time horizon, you can also buy and sell bottles with zero fees.
- Second, you qualify for automatic rebalancing as trends change over time.
This wine is 100% owned by you and its performance can be tracked in your account.
- Account Minimum: £25K ($30,000)
- Annual Fee: 2.75%
With the Premier Cru plan, investors get all the benefits from the Cru Classé plan with a few additional perks.
This includes invitations to wine tastings and certain events throughout the year, buy/sell recommendations on their marketplace called CultX, and increased customization options with their portfolio.
- Account Minimum: £100K ($121,000)
- Annual Fee: 2.50%
With the Grand Cru plan, investors get all the benefits from both of the other account plans.
Additionally, this account plan comes with priority access to exclusive wine releases, vineyard tours upon request, and invitation only events with producers.
- Account Minimum: £500K ($605,000)
- Annual Fee: 2.25%
With the Cult Cru plan, investors get all the benefits from each of the other account plans.
The extra perk with the Cult Cru plan is membership to their Cult Connoisseur’s Club. This club grants you access to a special visit to some of the leading vineyards in the world.
What is the Investment Process?
Once you determine how much you want to invest, Cult Wine will put together a recommended portfolio based on your risk appetite and time horizon.
If you aligned to the custom-made portfolio, then you will need to fund your account to move forward.
Once your account is funded, Cult Wine will allocate your wine into your name in their bonded warehouse.
From there, you are able to monitor the performance of your wines. This includes looking at historical sales, current market prices, and storage account information.
When Can I Sell?
As the wine is truly yours, you are able to liquidate at any time with Cult Wine’s secondary market.
Their team recommends a hold time of at least 3-5 years for the best chance to appreciate, though you can work with their team to sell at any time. Selling your wine early may not bring the best return.
Their specialist trade and wholesale team will work to sell your wine to the global wine trade as well as to private collectors and consumers.
They advise clients that the sale process can take around 8 weeks to finalize.
Where Is The Wine Stored?
All of the wine is stored in Cult Wines storage facility in Melksham, UK, which is near London.
Using Wine Cult’s storage is advantageous for a few reasons. First, because the wine is stored in London, the wine hub of the world, its value is trusted and facilitates an easier sell process.
Second, with 24hr CCTV and a state-of-the-art facility, your wine is stored securely, not to mention the insurance that Wine Cult offers all investors. In their warehouse, they are able to perform authenticity checks with their local team as well as provide photos of your portfolio upon request.
In fact, you can request a visit and see your portfolio with your own eyes.
Third, each client receives a unique sub account. This ensures that the wine in your portfolio is yours.
What Is CultX?
In addition to each of the plans mentioned above, clients will actually be able to buy and sell bottles of wine they choose with Cult Wine’s marketplace CultX.
This feature is still being built, though you can join the waitlist to be the first to get started.
With this platform, members will gain access to a trading platform with data about each wine available for trading.
Cult Wine Investment Review: Final Thoughts
Experts say that just 1% of all wines are invest grade. Thus, finding wine that belongs in your portfolio can be quite difficult.
Additionally, if wine is not stored properly, it can lose value!
With Cult Wine, investors only have to worry about the fun part – owning the wine!
Because Cult Wine handles the sourcing, portfolio management, transportation, storage, and insurance, investors can truly sit back and monitor performance.
Be sure to check our beginner’s guide to wine investing here to learn more about this asset!