Q1 2025 Wine Market Update

2025 – The Year ahead

Now that 2024 is behind us, the time has come to review, analyse, reflect, and look ahead to the future. Back in September 2022, when the market downturn first reared its ugly head, few would have predicted that the decline would stretch into 2025. Yet here we are. The stark reality is that the Liv-ex 100 is down 21.9% over the past two years. Throughout this period, no fine wine-producing region or wine producer has been immune to the malaise.

Is this the result of a perfect storm of macroeconomic uncertainties, geopolitical tensions, and shifting wine consumption habits? Or could we be witnessing the effects of an En Primeur system that has creaked under pressure, perhaps even breaking down as a mechanism for providing value to collectors? The likely explanation is a combination of all of the above.

So, the million-dollar question remains: What does the Fine Wine Market look like for 2025, and what opportunities will it present for investors, collectors, and fine wine enthusiasts alike?

As a starting point, we believe it’s crucial to analyse the available data. Market context is key, so we’ve reviewed the Liv-ex 100 Index (the industry leading benchmark for monitoring fine wine prices) from its inception in July 2001 to provide the broadest possible picture of market performance.

This led us to the following observations:

  • There have been three significant periods of negative performance: 2008, 2011-2014, and from 2022 to the present.
  • The longest decline the Index has experienced to date lasted 37 months in total between 2011 and 2014, including 15 continuous months of negative performance.
  • The current downturn has lasted 26 months so far, with the longest period of continuous decline being 11 months.
  • The most recent decline was halted in December 2024, when the Index posted a 0.2% gain. Is this the light at the end of the tunnel?
  • Since the Index’s inception, it has never posted a negative return over any given five-year period.

What conclusions can we draw from these observations?

If we look for a cyclical pattern in the data, it suggests that the current difficult conditions are likely to persist for a further nine months at most before we see a meaningful and consistent recovery in the Index. The data strongly emphasises the importance of viewing wine investment as a medium- to long-term proposition, with five years being the absolute minimum time horizon.

So, what does this mean in terms of opportunities for the year ahead?

We believe that any recovery will be driven by consumption, and as such, back vintages will be the first to see a rise in value. Ultimately, wine prices are governed by the forces of supply and demand. The market is currently flooded with young stock that is a long way from its drinking maturity, and with general expectations that the 2024 En Primeur campaign is likely to be mispriced, we see this as reinforcing our view. With pricing dynamics the way they are, there is a window of opportunity to take advantage of the current market conditions.

Our outlook for 2025 suggests that holding back vintages of physical stock across a diversified regional profile will likely yield the best results. At present, all fine wine is trading at a discount, and by selecting highly desirable, well-scored, and mature vintages, investors can leverage these conditions to their advantage. Without being reliant on new releases, this strategy offers investors and collectors a more dynamic and multi-faceted approach to opportunities the market presents throughout the year.

If you would like to discuss this market outlook or explore potential opportunities for the year ahead, please don’t hesitate to contact a member of the Waud Investment Wines team.

Will Buckland, Head of Trading and Operations
[email protected]