Last Frontier Investments: The Case of Alpine Wines

Masset, Philippe; Weisskopf, Jean‐Philippe; Fauchery, Clémentine

doi:10.1017/jwe.2019.30

Cited by 9 publications

(7 citation statements)

References 35 publications

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“…Studies based on more recent data sets draw mixed conclusions regarding the return of fine wines (see Le Fur and Outreville [2019] for a literature survey). This can be explained by the fact that over the last two decades, wine has become an investment in the eyes of some market participants (Masset et al, 2020). Its market has also become globalized with consumers from all countries, including China (Masset et al, 2016).…”

Section: Types Of Wines Present On Restaurant Menus the Unitedmentioning

confidence: 99%

“…For instance, sparkling wines from Champagne have a long-standing association with the notions of luxury and festivities. More recently, wines from Tuscany and Piedmont have developed a strong reputation, and their prices have subsequently risen (see, e.g., Masset et al (2020)). However, other wines, such as sweet wines from Sauternes or Madeira, have experienced an opposite dynamic characterized by less interest from consumers and stagnating prices over the last two decades.…”

Section: Introductionmentioning

confidence: 99%

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New York Restaurants: A Wine Odyssey Between 1865 and 1920

Masset¹,

Weisskopf²

2021

Cornell Hospitality Quarterly

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We examine the existence of wine in New York City restaurant menus over the period 1865 to 1920 for a sample of 850,000 restaurant menu items and 51,000 wines. Wine was already commonly present on menus in 1865, and its offering increased up until 1914 before dropping with the outbreak of First World War (WWI). Casual restaurants offered a narrower wine selection. Special menus displayed a significantly higher probability of containing wine but with a more limited choice indicating that wine was especially appreciated on special occasions. French wines, especially from Bordeaux and Champagne, were the most represented on menus followed by wines from Germany. The average selling price of a bottle of wine was around US$40 in 2018 terms. Prices, however, fluctuated widely over time and wine type. Notably, American wines were about 50% less expensive than French or German wines.

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Section: Types Of Wines Present On Restaurant Menus the Unitedmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

New York Restaurants: A Wine Odyssey Between 1865 and 1920

Masset¹,

Weisskopf²

2021

Cornell Hospitality Quarterly

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“…Asset selection is fundamental to portfolio management. While the set of investment-grade fine wines continues to expand (e.g., Masset, Weisskopf, and Fauchery, 2020), the majority of the literature on the returns to investing in fine wines focuses on the five first-growths of Bordeaux's Left Bank (c.f., Le Fur and Outreville, 2019). In this paper, I address the asset selection question: over the long run, has it been better to invest in wines from the superstar châteaux of the Left Bank, Right Bank, or both?…”

Section: Introductionmentioning

confidence: 99%

Left, right, or both? Long-run returns from Bordeaux

Tolhurst

2022

J Wine Econ

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As the market for fine-wine investing matures, basic questions of portfolio strategy remain unexplored. I evaluate how adding fine wine from the superstar châteaux of Bordeaux's Right Bank might complement the traditional focus on the five first-growths of Bordeaux's Left Bank. Fundamentals for the Right Bank's superstars are attractive: they produce roughly an order of magnitude less, face different production conditions, and receive equally impressive critical reviews. However, they receive far less attention than their Left Bank counterparts. To examine returns over the long run, I hand-collected 10,885 prices for eight wines from an archive of 391 Sherry-Lehmann catalogs, a New York City retailer, which began at the end of Prohibition. Using these historical price records, I compare the real returns from investing in the five Premier Cru to a portfolio that adds three superstar châteaux from the Right Bank: Ausone, Cheval Blanc, and Petrus. I find the geometric-average annual return was 6.78% in real terms from 1938 to 2017 for the joint portfolio, less than 0.01% different, but with better risk-reward as measured by the Sharpe ratio. Additionally, I find the life cycle of aging is substantially different across the two Banks, which could provide further diversification benefits for the strategic investor.

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“…Examining our data more closely the 5% price increase is because of around one-quarter of sample wines (consisting of reputable producers and/or high-quality Pinot Noir cuvées). Thus, it appears that producers who could exploit this opportunity to position themselves more durably in the fine wine category did so to gain a reputation through which they would become more comparable in terms of market, quality and prices to similar wines from neighbouring regions (Masset et al , 2020b). Overall, this strategy appears rational in a country that has built its success on innovations developed to overcome a structurally strong currency (Auer et al , 2018) and adds to the literature on the impact of trade frictions in the wine trade (Dal Bianco et al , 2015; Santeramo and Lamonaca, 2019; Santeramo et al , 2019).…”

Section: Introductionmentioning

confidence: 99%

Fine wine pricing in a small and highly competitive market

Masset

Mondoux

Weisskopf

2022

IJWBR

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Purpose This study aims to identify the price determinants of fine wines in a small and competitive market. These characteristics are found in many lesser-known wine-producing countries and are often difficult to analyse because of lack of data. Design/methodology/approach This study hand-collects and transcribes wine-related data for 149 Swiss wineries and 2,454 individual wines over the period 2014–2018 directly from wine lists provided by wineries. This study uses multivariate ordinary least squares regressions to analyse the relation between wine attributes and prices and to assess the effect of a currency shock caused by the sudden appreciation of the Swiss franc in 2015 as well as a reduction in information asymmetries induced by the novel coverage of Swiss wines by The Wine Advocate. Findings Prices mainly depend on collective reputation, production techniques and product positioning. Surprisingly, following a sharp appreciation of the Swiss franc, producers did not reduce prices. The arrival of a highly influential wine expert on the market also had a positive price effect on rated wines and producers. Both hint at wineries attempting to position themselves relative to competitors. Originality/value Few studies examine the price drivers in lesser-known wine markets, where competition is fierce. This study’s results show that wine pricing differs from other more famous and larger wine regions. In addition, to the best of the authors’ knowledge, this study is also the first to analyse the impact of a currency shock and a reduction in information asymmetries on wine prices.

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Last Frontier Investments: The Case of Alpine Wines

Cited by 9 publications

References 35 publications

New York Restaurants: A Wine Odyssey Between 1865 and 1920

New York Restaurants: A Wine Odyssey Between 1865 and 1920

Left, right, or both? Long-run returns from Bordeaux

Fine wine pricing in a small and highly competitive market

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