Sotheby’s Wine Market Report – The Highlights of 2014
Sotheby’s, one of the world’s top two auction houses, recently released its wine market report for 2014. Each year, Sotheby’s compiles the sales data from its wine auctions and tells an interesting story about buying wine from the auction market, and where the trends are headed. It doesn’t make top French or U.S. wines any cheaper, but it lets you know where to put your money if you ever decide to take out a mortgage on your house! In all seriousness, though, the report makes for interesting reading and there are some curious trends making an impact on traditional markets.
Top Sellers of 2014
One thing that hasn’t changed is the dominance of Domaine de la Romanée-Conti. The Burgundy powerhouse remains top of the total auction sales for Sotheby’s wine, racking in a massive USD$8.9 million in sales in 2014. It’s an increase of 24% on 2013 sales, and helps them remain number one. Of the ten top-selling producers, three hail from Burgundy – the rest come out of Bordeaux. It tells us that Bordeaux wines are the clear leaders in re-sale and collecting value overall. The most interesting point of the top-ten table is the arrival of Joseph Drouhin, clearly making waves in the eyes of collectors. The producer moved from 48th position to 10th in 2014, and all eyes will be on Drouhin in the next few vintages to see whether prices rise alongside auction sales. Drouhin sales increased 545% at auction in 2014 compared to 2013.
Bordeaux wine sales
Pétrus moves from 2nd to 1st in the 2014 rankings, and apart from this point, there is really just a re-shuffle of the existing top ten. There are no newcomers, and therefore no losers in this year’s rankings. What is worth noting is drop in value of Haut-Brion at auction, which fell from 3rd in 2013 to 7th in 2014. Of course availabilities of wine at auction effect rankings, but we should wait to see if this is a sign of a longer-term trend.
Burgundy wine sales
The two arrivals in the Burgundy top ten are Joseph Drouhin and Domaine Georges Roumier. Drouhin, as we saw, had a meteoric rise in 2014, and moved from 13th to 3rd in the Burgundy rankings in 2014. As I said, this might simply mean more availability of desirable vintages in 2014, or the sign of a longer-term rise in Drouhin values. Watch this space! As for Roumier, their rise is almost as impressive, moving from 12th to 5th. There are obviously losers in this ranking, and grabbing hold of wines that have slipped out of the top ten might just save you some money in the short-term.
No surprises here – Krug leads the way, but swaps spots with Dom Pérignon compared to 2013. The rocket in the group is Veuve Clicquot, moving from 12th to 7th in 2014. All other houses in the top ten simply changed positions, but within the top 10, Salon made the biggest move, rising from 8th to 4th.
U.S. wine sales
The big story in the U.S. market is the slump in Opus One sales. The Napa giant fell from 1st in 2013 to 6th in 2014, but as with all sales, this might simply be due to the availability of the best vintages at auction. The biggest mover was Peter Michael, moving from 13th to 7th, and pushing Bryant Family wines down one spot. Sine Qua Non holds a powerful position, moving from mid-table security in 2013 to premium 2nd position in 2014.
Italy wine sales
All the big names are here, and make their presence felt. Gaja (4th to 2nd), Ornellaia (2nd to 3rd), and Sassicaia (3rd to 5th) are pretty much immovable. There are surprises and stings in the tail, however. Bruno Giacosa surprised everyone in 2014 with some really sterling sales, moving from 7th to 1st. Massetto has swapped spots with Giacosa, slipping to 7th from 1st. Another great story for Italian wine is the variability, and ability for newcomers to storm through. Luciano Sandrone leaves all before him, storming through from 22nd in 2013 to 6th in 2014. Paolo Scavino also makes waves, rising from 20th in 2013 to 9th in 2014. Both Sandrone and Scavino’s Barolo is becoming highly desirable, and shows the sheer investability of Barolo over the long term.
Where are the buyers coming from?
The slump in sales originating from Asia continued in 2014, falling to 55% of sales in 2014 from 62% in 2013 and 70% in 2010. The Bordeaux bubble has clearly burst and this is having an effect in resale markets, where general confidence in Bordeaux is effecting auction sales. Indeed, that Asian buyers only purchased 20% of wines sold in New York is the lowest figure in the last five years. A sign of things to come?
Bordeaux v Burgundy
As we saw in the Top Ten Sellers overall, Bordeaux and Burgundy are the places to invest in. What is interesting however, is the general rise in Burgundy prices versus the general fall in Bordeaux prices. Are buyers looking for toward connoisseurship rather than chateau wines, or is this a sign of the decline in Cabernet Sauvignon, Merlot and Cabernet Franc popularity? Time will tell!
Big selling lots
The numbers for a big selling lot at auction are always impressive. The big story last year was the 114-bottle lot of Domaine de la Romanée-Conti, spanned the 1992-2010 vintages and sold in Hong Kong for USD$1,609,776. The previous record for the biggest lot was 50 cases of 1982 Mouton-Rothschild, which sold in 2006 for USD$1.05 million. Probably the most interesting sale was a vertical lot of Chateau Mouton-Rothschild, spanning 1918-1996 and including 57 bottles. The lot sold at auction in Hong Kong for USD$102,083.
Who’s got the money?
Overall in 2014, Hong Kong led the way with USD$28.8 million in sales, followed by London with USD$21.1 million and New York with USD$15.4 million.
The auction market is alive and well, and were we to look at Christie’s, I am sure we would see equally impressive results. Cellared under the right conditions (as the best lots are from these auctions), wines bought at auction will continue to impressive for long periods of time.