Best Wine Exchanges for Investors

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Contributor, Benzinga
July 13, 2023

The old Latin saying “in vino veritas” translates roughly to “in wine, there is truth.”

Although the popularity of wine dates back thousands of years, its cache is higher than ever. However, the pinot noir, chardonnay, madeira, sauvignon blanc, riesling, merlot, rose wine or cabernet from your mother’s wine club now reaches far past a gathering of friends. Today, you could make a persuasive argument that global demand for wine is so high that there is more profit than truth in our favorite grape libation.

In fact, wine has become so popular that it’s now viewed as a legitimate investment. The rise of internet crowdfunding platforms has given way to a number of innovations in the way people invest. One of them is wine exchanges. 

A wine exchange is an online platform where you can invest, buy, collect, sell and trade your favorite wine. You can also buy fractional shares of super expensive wines and hold them for profit. So, what is investment wine and how does it work?

Best Wine Exchanges for Investors

  • Best for Long-Term Whiskey and Wine Investments: Vinovest
  • Best for Rate Fine Wines and Spirits: Vint
  • Best for Diversification: Live-Ex Fine Wine
  • Best for Wine Day Trading: LiveTrade by Bordeaux Index
  • Best for Initial Bottle Offerings (IBO): Alti Wine Exchange

Wine exchanges have become so popular that several different platforms have opened up online. Investors can use these exchanges to build wine portfolios not too different from stock portfolios.

As the value of the wines in an individual portfolio increases, so too does the overall value of the portfolio. Once confined to an auction house, fine wine has become a much more powerful draw for investors. Below, you will find a quick breakdown of some of the more well-known wine exchanges. 

1. Best for Long-Term Whiskey and Wine Investments: Vinovest 

Vinovest is one of the more well-known and highly respected of all wine-exchange platforms. Signing up is relatively easy and you can start investing with as little as $1,000. The good thing about Vinovest is that even if you don’t know a cabernet sauvignon from a malbec, you can still participate.

Vinovest has in-house sommeliers who combine their expertise with modern analytics to custom build a portfolio of wines for each individual investor. This is not a fractional share, meaning you will own each bottle in your portfolio free and clear. Vinovest will also take care of the insurance and shipping per their delivery policy.

Pros

  • The in-house sommeliers provide you with quite a lot of good information
  • No fractional investing means you fully own each bottle you choose

Cons

  • The minimum might feel high for some investors
  • The lack of fractional investing might be an issue for some new investors

2. Best for Rare Fine Wines and Spirits: Vint

There are investors who have limited funds and they want to get started in the wine and alcohol space, and they can buy into fractional investments instead of hunting for rare alcohols, spirits, wines, etc. When you use Vint, you’ll find that they specialize in these types of investments, including a level of professional storage and management that protects these investments for long periods of time. This means you’re not tasked with installing a wine cellar, etc. This is also a wonderful way to diversify because, as a rule, you want to remain as diverse as you can when you commit money to investing.

Pros

  • Professional storage and management of spirits ensures that they’re always in the best shape and never spoiled
  • You can buy in with a low minimum, meaning that you can slowly grow your spirit portfolio

Cons

  • While you can diversify with many spirits on this platform, not all spirits will hold value like wine often does

3. Best for Diversification: Liv-Ex Fine Wine 

Live-Ex is a wine exchange platform that takes a heavily data-driven approach to wine investing. It relies on a large database to provide both buyers and sellers up-to-the minute pricing and value information on their favorite bottles. Live-Ex’s analytics use nearly 900 million individual data points to give consumers the most accurate valuation and pricing information available.

The platform has thousands of bottles listed for sale by investors and wine merchants around the globe. As a Live-Ex customer, you are free to build your own portfolio and sell bottles to other Live-Ex members around the world. Once you and your trading partner agree on a price, Live-Ex offers secured shipping and superior logistics that will get your products to you fast.   

Pros

  • You can easily broker deals and trades
  • The shipping process is secure and leverages only the finest logistics partners

Cons

  • The database can be overwhelming for those who don’t know their wines all that well

4. Best for Wine Day Trading: LiveTrade by Bordeaux Index 

LiveTrade by Bordeaux Index is a newer platform that is well respected. It won the Drinks Business Awards Best Platform of the Year for 2022. This exchange quotes live prices at which they will buy or sell individual bottles of wine or spirits. 

Users who wish to sell can get a real-time, firm price commitment for their bottles, while buyers can also get up-to-the minute pricing for their preferred bottles. Unlike some other exchanges, LiveTrade doesn’t require you to store your wine in its facility but your for-sale wine must be stored in a professionally run facility in the EU or U.K. Your bottle must also meet LiveTrade’s condition standards.  

Pros

  • No need to store new wines in their facility, if you don’t want to
  • Real-time pricing helps you make snap decisions
  • You can easily price wine you wish to sell without feeling as though you’re being undersold

Cons

  • For-sale wines must be stored professionally, which can complicate the process

5. Best for Initial Bottle Offerings (IBO): Alti Wine Exchange 

Alti Wine Exchange takes a more bespoke approach to wine investing. Its business model allows you to buy wine directly from some of the world’s best wineries through a process known as individual bottle offerings. This custom, pick-as-you-go model allows investors to curate their own collections.

Once you purchase your bottles, you can trade or sell them using Alti’s blockchain technology. Alti also offers a secondary market where you can sell your wine on an open exchange or even put bottles up for bid. All your wines are held securely in a bonded Bordeaux warehouse. 

Pros

  • The pick-as-you-go model is much easier to manage for those who are finicky about their investments
  • Secure holding facilities simplify the process for those who don’t wish to keep a wine cellar

Cons

  • Blockchain technology may be off-putting for some investors who don’t wish to overuse or over-rely on technology

What is a Wine Exhange?

A wine exchange is a platform that enables investors to buy and sell various types of wine including both rare and vintage wines. As an online wine trading platform where the wine bottles aren't physically present, instead, they are documented and verified by experts to provide surety of their authenticity. Platforms like these allow individuals to invest in wines without the need for an extensive wine knowledge.

A wine exchange platform acts as an intermediary between the buyer and the seller, enabling both parties to transfer the ownership of the wine after the exchange. These types of platforms offer various features such as user profiles and wine portfolios to track the investments and stay informed about the wine market trends and prices.

Wine trading has become increasingly popular in recent years, particularly with the increase of online wine exchanges. Overall, a wine exchange provides a convenient and secure way for investors to diversify their assets and get involved in the wine trading market.

What to Look for in a Wine Investment Platform

When evaluating wine exchange platforms, you’ll want to conduct research, compare different wine exchanges, and take your personal preferences and trading goals into account. By considering the following factors, you’ll be in a stronger position to select a wine exchange.

Reputation and Trustworthiness

Research the reputation and track record of the wine exchange platform or company. Look for reviews, testimonials, and feedback from other users to ensure they have a good reputation for reliability and customer satisfaction.

Security and Authenticity

Wine exchanges should prioritize security measures to protect your personal and financial information. Additionally, they should have measures in place to ensure the authenticity and provenance of the wines being traded. Look for platforms that employ secure encryption, verification processes, and have established relationships with reputable wine sources.

Wine Selection

Consider the variety and quality of wines available on the exchange. A diverse selection of wines from different regions and vintages allows for greater flexibility and options when trading or purchasing. Ensure that the exchange offers a range of wines that align with your preferences and interests.

Trading Options

Assess the trading options provided by the wine exchange. Some exchanges may offer direct person-to-person trading, while others may facilitate trading through a centralized platform. Consider which method suits your needs and preferences. Additionally, look for features such as bid/ask prices, trading volumes, and liquidity to gauge the exchange's trading capabilities.

Fees and Costs

Examine the fee structure of the wine exchange. Different platforms may have various fee models, including transaction fees, listing fees, or membership fees. Evaluate how these fees may impact your trading activities and determine if they align with the value and services provided by the exchange.

Regulatory Compliance

Check if the wine exchange adheres to relevant legal and regulatory requirements. Depending on your location, the exchange may need to comply with specific regulations, licensing, or certifications related to the sale and distribution of alcohol. Ensure that the exchange operates within the legal framework of your jurisdiction.

Customer Support

Consider the level of customer support provided by the wine exchange. Look for platforms that offer responsive and accessible customer service channels. This will be crucial if you encounter any issues, have questions about trading processes, or need assistance with your account.

Community and Social Features

Some wine exchanges may offer community features such as forums, user reviews, or educational resources. These can be valuable for connecting with fellow wine enthusiasts, sharing knowledge, and gaining insights into wines before making trades or purchases.

Diversifying Through Wine Exchanges

Wine has become a popular investment asset due to its historical significance and potential for profitability. Wine exchanges like Vinovest and Live-Ex Fine Wine provide an online platform for investors to buy, sell, and trade wines, with features like fractional ownership. Other platforms like Alti Wine Exchange cater to different investor preferences. Fractional wine trading platforms like Vint offer an accessible entry point for interested investors. These wine exchanges provide opportunities for diversification and potential rewards like wine gifts in the growing market.

Frequently Asked Questions

Q

Who can use a wine exchange platform?

A

Wine exchange platforms are designed for wine collectors, enthusiasts, and investors who are looking for a reliable and easy way to acquire or dispose of wine assets. Anyone with an interest in wine trading can become a member of a wine exchange platform.

 

Q

What are the advantages of using a wine exchange platform?

A

The main advantages of using a wine exchange platform are access to a wider range of wines, the ability to trade with other wine collectors and enthusiasts from around the world, and greater flexibility and control over the buying and selling process. In addition, wine exchange platforms offer transparent pricing, lower transaction costs, and better liquidity than traditional wine markets.

 

Q

Are there any fees for using a wine exchange platform?

A

Yes, most wine exchange platforms charge a commission on sales made through their platform. This fee varies by platform, so it’s important to read the fine print before signing up.