Italian fine wine proves a winner for canny investors

Investors are reducing their exposure to the traditional fine wines of Bordeaux and Burgundy and turning to Italy for reliable and future-proofed collectibles

Words by Tom Harrow

Casanova di Neri in Montalcino: "Incredible value in the wider context of fine wine".

Italian wines are the new darling of the investment scene, outstripping the average growth rate for the international auction market, according to the global marketplace Liv-Ex and a host of key observers.

Last month New York-based auction house Zachys’ first European sale was based on wines from the cellar of Florence’s renowned restaurant Enoteca Pinchiorri.  The Italian lots went for sums up to 40 per cent higher than their low estimates – over £375,000 in total. Large formats of Super Tuscan Masseto broke records: a double magnum of the 2001 achieved a hammer price of £6,820 (well over double the estimate), and a 15l format realised £18,600, almost double the £9,500 it was expected to fetch.

Liv-Ex, on whose trading platform a number of the Zachys lots soon appeared, says that while the secondary market has grown at an annual rate of 9 per cent, Italian wines have grown 28.5 per cent in the same period.

In November last year, Liv-Ex founder James Miles argued that key factors behind Italy’s emergence were the low entry point into the fine wine market, and the broadening critical landscape that has meant expert voices being disseminated more widely.  Liv-Ex analysts add that as Italian wines are not subject to the new US tariffs that have hit French, Spanish and other wines this year, “interest has particularly picked up among US buyers”.

Piedmont is an excellent alternative to Burgundy, where prices are beginning to make wines unobtainable

At Italian specialist importer Falcon Vintners in London, managing director Eric Sabourin points to a period of rapid change in Piedmont from 2006 onwards, when growers like Bartolo Mascarello “really came to life,” and since when there has been “a considerable amount of better wine, with new benchmarks set in 2010 by producers like Fratelli Brovia.”

Sabourin adds that Piedmont is looking like an excellent alternative to Burgundy, where prices are beginning to make wines unobtainable. Increased tourism to the region, even if the pandemic has curtailed trips this year, can only add to its attraction.

He points to a greater number of new growers like Fratelli Alessandria and Diego Conterno, and the young generation of established producers like Paolo Scavino and Fratelli Oddero, being largely responsible for the increase in quality, moving away from “the Parker-pleasing wines of the 90s” and returning to more traditionally-styled, less-extracted Barolo, matured in larger barrels and using less new oak.

Sassicaia wine for investment (1)
Tenuta San Guido's "supertuscan" blue chip Sassicaia: "consistently sought-after, even with considerable price hikes"

However like Burgundy, Piedmont’s wines are produced in relatively small quantities and demand is already beginning to outstrip supply. Sabourin points out that top growers like Bartolo Mascarello, Giuseppe Rinaldi, Vietti, Cappellano, Brovia and Burlotto have now been discovered by wine lovers – and their prices are increasing correspondingly. The latter’s Cru Monvigliero, until quite recently £30 a bottle, is now nearer £200.

Miles Davis of trading exchange Wine Owners says these producers are all active movers on his platform, but highlights Sandrone’s 2016 Le Vigne, “bought in July at £500 a case and traded in September for £1,250” after receiving a perfect score from Monica Larner, The Wine Advocate’s influential Italian critic.

Other names to keep a close eye on are Cavallotto, Elio Grasso, G D Vajra, and E Pira di Chiara Boschis. Sabourin also namechecked the “stunning” A & G Fantino and Giovanni Rosso, who has inherited vines in Vigna Rionda, Barolo’s finest site.

Liv-ex’s other wines worth watching are Barolo’s Giacomo Conterno’s flagship Monfortino Riserva 2013 – the leading Italian wine traded by value over the year to August – and Tuscany’s already-renowned Sassicaia 2017.

Chianti's Castello di Rampolla: its Vigna d’Alceo and Sammarco offer “exceptional quality and value”

Another key analyst, Wine Lister, shows Piedmont has been out-performing Bordeaux and Burgundy across a six-year period. From May 2014 until May 2020, Piedmont showed 160 per cent price growth on the secondary market. In the same period, Burgundy’s growth was 120 per cent while Bordeaux showed 20 per cent.

While there is a raft of new investable producers, and advisers like Davis are repositioning clients’ portfolios accordingly, the ‘Big Five’ (Sassicaia, Tignanello, Solaia, Masseto and Ornellaia) are still consistently sought after, even with considerable price hikes.

And there is a new contender. Masseto’s second wine Massetino, whose second vintage, the 2018, was released just weeks ago, is already selling for 20-25 per cent more than its launch price of £540 for three bottles in bond, according to Wine Searcher.

The next tier of ‘Supertuscan’ producers such as Tua Rita and Saffredi are also worth watching, Davis says. “With prices at £300-400 for six, they offer good value and are more liquidity on the secondary market”.

Saffredi wine
Saffredi: "Offers good value and liquidity on the secondary market"

Wine Lister COO Chloe Ashton favours other Tuscan IGTs – Castello di Ama’s L’Apparita and Montevertine’s Le Pergole Torte, and picks out Castello dei Rampolla especially, suggesting the estate’s Vigna d’Alceo and Sammarco offer “exceptional quality and value”. Others worth noting are Cepparello and Flaccianello, the top wines from Chianti estates Isole e Olena, and Fontodi respectively.

Ashton suggests Montalcino’s wines “still offer incredible value in the wider context of fine wine,” especially with the superb 2016 Brunellos and 2015 Riservas from producers like Casanova di Neri, Cerbaiona, Valdicava and Poggio di Sotto released next year.  Sabourin, meanwhile, is keeping a weather eye on Barolo’s neighbour Barbaresco, marking out Serafino Rivella and La Ca Nova in particular, alongside Produttori Barbaresco, whose 2016 was the most traded Italian wine on Liv-Ex by volume in the 12 months to August.

For those looking to diversify their fine wine portfolios, even concentrating on the two regions of Piedmont and Tuscany, it’s clear there is plenty to consider. Most enticingly, as Ashton concludes, “there’s still room for more growth compared with Bordeaux and Burgundy – in quality, in price, and in popularity.”