News

Fine champagne: fizzing with potential

26th January 2018


Champagne enjoyed the highest ever listing in the recently published 2017 Liv-ex Power 100, with it’s top performer Krug occupying 15th place.

Liv-ex director Justin Gibbs says “it’s a 2002 story,” referring to the hotly anticipated release of this highly acclaimed vintage back in February.

But it’s not just about the Krug 2000. Champagne is becoming an increasingly important part of any fine wine portfolio – now representing 6.2% of the secondary market in total, up 3.5% from last year, as a region it is almost as large as Italy.

“The old Champagne story still holds true: it gives an almost guaranteed 10% return per annum regardless of market conditions,” says Gibbs.

Phillipponnat, for its Clos des Goisses cuvée, is also “a brand on the move, but not quite in the power 100”, according to Gibbs.

 

Analysing the Champagne sector

Champagne benefits from strong brand names and only the best vintages, released ready to drink. Champagne houses are so acutely aware of their reputation as producers of blue chip wines that they will sacrifice an entire vintage if the grapes aren’t ‘just right’. Roederer produced a Cristal in 1997 and 1999, whilst Krug made neither and instead offer a 1998.

This unpredictability makes Champagne a difficult region to analyse in comparison to other Bordeaux sub-sectors.

In terms of complexity, it lies somewhere between Bordeaux and Burgundy. There are nine producers, three of which add in a Rosé for good measure. These vary hugely in terms of scale, with Moët releasing several million bottles of Dom Pérignon and Philipponnat releasing only 20,000 of their Clos des Goisses, with varying degrees of frequency.

Salon may think only four harvests per decade are worthy of making their vintage Mesnil, while Taittinger may pick as many as six or seven years per decade to produce their Comtes de Champagne.

The other issue is “the Parker factor”. While the opinion of Richard Juhlin holds considerable ground in the fizzy wine world, they could never be as all-pervasive as those of the eminent Robert Parker’s in Bordeaux. Nor do his ratings of the region hold as much sway as his Bordeaux or Napa valley scores.

There is also little homogeneity, as with the rest of the fine wine market, in terms of individual price movements. Taittinger’s Comtes de Champagne 2002 and 2004 performances over one, two and five years, respectively are: -17%, +35%, +95%, and +7%, +26% and -2%. As ever, we have to analyse the whole picture to steer us towards the bargains.

 

Which wines to buy

Fine champagnes do not last as long as quality reds, so the investor needs to aware of sell-by dates and the sketchy market for older vintages.

Also, even Champagne has ‘off years’ – over the last few decades the 1996 stands pre-eminent, with the 2002 just behind. Next best are the 1998, 1999 and 2000, followed by the 2004 and 1997.

In our opinion, three vintages represent a particularly good bargain:

  • Krug 2000 (95 pts), trading at below the level of the 1998 which also has 95 points.
  • Cristal 2004 (95 pts) trading at less than its ‘inferior’ 1997 with 91 points.  
  • Taittinger Comtes de Champagne 2004 (94 pts), a bargain compared to its 2002 (95 pts) equivalent.

The Krug 2000 rose 6% last year, the Cristal 2004 rose 12% and the Taittinger 7%. Whether you are balancing a portfolio or simply looking for ideas, we recommend you talk to us in more detail about these three future winners.