A Guide to Investing in Champagne
Lucy Shaw, Contributing Writer
1 September 2023
Having ruled the roost for centuries, Champagne remains the ne plus ultra of sparkling wines and the benchmark against which all other fizz producers measure themselves.
With stringent production and ageing regulations, limited vineyard space and cellar masters that pay forensic attention to detail during the blending process, the top expressions from the region have also been flexing their investment mettle in recent years, proving themselves to be valuable additions to balanced fine wine portfolios.
Presenting investors with a unique opportunity to own a piece of luxury liquid history, over the last decade Champagne has made a big splash at Bordeaux Index and now accounts for around 20% of its annual turnover. A growing global demand for prestige cuvées among high-net-worth individuals over the last five years, coupled with limited supply and inexorably rising release prices, has driven up the value of the most sought-after Champagnes, such as Cristal and Dom Pérignon, which has benefitted investors who were savvy enough to recognise their potential for strong returns.
A brief history…
Romans were cultivating vines in what is now the Champagne region as far back at the 1st century, and by the 9th century, Champagne's association with the coronation of French Kings in Reims Cathedral made the still wine popular across France. While French monk Dom Pérignon is mistakenly credited for inventing sparkling Champagne in 1693, the cellar master at Hautvillers Abbey certainly made his mark in the region, importing stronger glass bottles from England and reducing yields through pruning to improve concentration.
An hour's drive east of Paris, Champagne’s 34,000 hectares of vineyards across 319 villages are divided up into small plots, the most prized of which are its 44 premier cru and 17 grand cru sites that are used in the production of prestige cuvées like Salon and Cristal. Setting Champagne apart and making it perfect for fizz production is its northerly location and abundance of chalky soils that encourage vine roots to burrow deep in search of water.
The art of blending
With the exception of blanc de blancs, blanc de noirs and single vineyard expressions, the great majority of Champagnes are made from a blend of Chardonnay, Pinot Noir and Meunier. The sparkler gets its fizz as a result of a secondary fermentation that takes place inside the bottle, while its complexity and signature toasty notes come from time spent on its lees (leftover yeast particles) while ageing in the limestone crayères Champagne is famous for.
While a collective of over 16,000 growers own 90% of the vineyard land in Champagne, 15 leading houses produce more than a third of the region’s annual output, with one in every five bottles sold being an LVMH brand – the luxury goods giant presides over top labels including Krug, Dom Pérignon and Ruinart – Champagne’s oldest house. Other houses that have played a pivotal role in shaping the Champagne region include Bollinger, Taittinger, Louis Roederer and Pol Roger, all of which remain family owned – a rarity in the region.
Notable vintages for investment
While the Champenois pride themselves on their ability to blend exemplary wines year on year, when it comes to vintage expressions, following on from the highly-rated 1996 vintage, certain years have stood out as exceptional since the start of the new millennium – namely 2002, 2008 and 2012, making this trio a savvy investment choice. The quality and critical acclaim of the 2002 vintage was a game changer for Champagne, leading to increased collector and investor interest in the wines.
The lauded 2008 vintage – a standout year for both Pinot Noir and Chardonnay – was another marker in the sand, injecting excitement into the market and cementing Champagne’s status as an integral part of a balanced fine wine portfolio. The 2012 vintage built upon the success of 2008, while being an excellent vintage in its own right. While Pinot yields were small in 2012, the concentration and quality of the grapes that were picked was superb, resulting in rich, full-bodied wines, making 2012 a standout year for Pinot-dominant blends like Cristal, Bollinger La Grande Année and Philipponnat Clos des Goisses.
Spotlight on Bollinger
Founded in 1829, Bollinger was the first Champagne house to be awarded a Royal Warrant. With 178ha under vine, the house is famous for its focus on Pinot Noir, and has carved a reputation for its rich and complex sparklers with incredible ageing potential. Helping to steer the house through the 20th century was the indomitable Lily Bollinger, who took the helm in 1941 following the death of her husband Jacques. During her reign Lily expanded production and travelled the world promoting the brand. She was also the driving force behind Bollinger R.D. – the house’s prestige cuvée, which spends at least eight years on its lees and benefits from the freshness of having been recently disgorged, while delivering the complexity of vintage Champagne.
An attractive investment
As investors seek to diversify their portfolios, Champagne offers an attractive alternative asset class with the potential for long-term capital gains. The top labels, from vintage Krug to Taittinger Comtes de Champagne, have a strong track record of investment performance over time, having consistently appreciated in value, outperforming other traditional investment options. Much of this newfound interest in top tier Champagne stems from a greater appreciation of the craftsmanship that goes into the making of prestige cuvées, and a better understanding of their impressive ageing potential.
Champagne offers a pleasurable drinking experience on release along with the promise of further evolution for those willing to lay them down. Prestige cuvées have made for great investments as prices have risen materially over the past 5 years. Yes. When viewed against spiraling Burgundy prices, they continue to represent excellent value for money.
Star performers on LiveTrade
Louis Roederer, Dom Pérignon, Bollinger, Krug and Taittinger account for the lion’s share of Champagne’s total turnover on LiveTrade, with Roederer leading the charge – buoyed by its recent run of critically acclaimed Cristal releases – and Salon, Philipponnat, Pol Roger and Jacques Selosse also important players in the field. When it comes to five-year returns on the platform, there are a plethora of success stories with the Champagnes as diverse as Salon 2002, Bollinger Grand Annee 2008 and Krug 2000 all doubling in price.
At a vintage level, 2008 stands out for both its quality and market importance.. Sunny late summer days coupled with cool night temperatures allowed for slow ripening, leading to complex, powerful flavours balanced by electrifying acidity. Dom Pérignon and Cristal’s 2008 releases in 2018 kicked off a successful run of releases from the lauded vintage, with the former garnering a 98-point score from Antonio Galoni and the latter receiving a slew of perfect 100-point scores from leading critics including Roger Voss and James Suckling. The launch of Bollinger La Grande Année followed a year later, which netted 98 points from Champagne specialist Richard Juhlin. Later to the party, Taittinger released the 2008 vintage of Comtes de Champagne in 2020, with Krug 2008 following in 2021, both of which were hotly anticipated and rapturously received.
