Luxury Wine & Spirits Investments: How Can Brands Cultivate Collectibility
“The power of reframing things cannot be overstated.” – Rory Sutherland
Cliché to start with a quote I know, this isn’t a first-year uni essay. But Sutherland’s talk ‘Perspective is Everything’ is an amusingly detailed take on perceived value and how what things actually are matters less than how we see them.
Woven through witty anecdotes and decision science applications is a central thesis: too often — when it comes to human decision-making — psychological, creative, emotionally-driven ideas are totally forgotten about — if they’re even considered in the first place.
One of the great mistakes, Sutherland says, of economics, of business, of life, is the failure to understand something as a function of its meaning, as well as its amount.
With alternative asset investments like fine wines and rare spirits, the financial benefits are manifold, as well as relatively apparent to anyone who isn’t afraid to look at their bank balance. For those people, here’s a quick list.
- Proven Track Record – fine wines specifically have been one of the best-performing assets in the last three decades, with a 10% CAGR.
- Scarcity – they’re an improving asset, where consumption and limited production breeds scarcity and a natural supply-demand imbalance that drives up price.
- Low Correlation – value is fairly unaffected during times of market turmoil like the 2008 crisis, COVID pandemic or other economic downturns.
Especially in the current whiplash-inducing economic climate, those who can are choosing to invest in alternative assets to diversify their portfolio and instil a more reliable quality to what can be risky business.
The numbers add up. But the ‘why’ behind luxury purchases today is far more personal than in previous eras. ‘Credible investment’ doesn’t quite capture the romance of what is usually a considered and thoughtful choice, followed by an extended relationship until a cap is twisted or a cork popped.
Democratised Access
Products which were once exclusive to auction houses and private transactions are more accessible than ever before thanks to marketplaces like BlockBar and Farandole.
Democratising access to luxury wine and spirits, BlockBar works directly with world-leading brands to sell authentic, limited edition bottles via blockchain, offering optimal warehouse storage, airtight insurance, global shipping and their marketplace for resales.
Depending on whether the individual wants to drink or resell, Blockbar handles the storage in temperature controlled warehouses ready for consumption or for trade - ensuring products are authentic and giving consumers a safe, brand-backed marketplace for trading & investing.
In the third episode of our podcast, What The Luxe, Matter Of Form’s flawed masterminds (CEO Anant Sharma & COO Fred Moore) sit down with BlockBar CMO Charlotte Shaw to talk about building a legacy for the industry, backed by web3.
Similarly, Farandole is a global NFT marketplace for wines & spirits. The brand offers membership through the Farandole Club – a digital platform to access exclusive events (both virtual and real), collect tokens and redeem bottles from their virtual collection. With a team spread across France and Hong Kong, their name derives from a human-chain-like dance, standing for unity and the desire to move as one.
With investing in wine and spirits easier than ever for the U/HNW, how are sellers imbuing meaning and perceived value beyond the financials?
Imbuing Meaning & Perceived Value in Wine & Spirits
1) Storytelling
At the heart of a timeless brand is the ability to tell a story — weaving a tale for audiences to invest in, imbued with brand’s founding spirit and unique values, in the hope they too get behind it as much as internal stakeholders.
With products that are distilled and aged for years-on-end, wine and spirits brands have unique opportunities to delve into devotion to their decade-spanning craft.
Glenfiddich brings this to life. Every interaction teasingly unveils the story of their maverick beginnings, raw determination and intense passion. Instead of using heritage & history as a crutch to lean on, they’re guided by spirit. What would the founder William Grant do? How would he innovate today? Are they still reflecting his vision of being ‘the best dram in the valley’? The dark and alluring branding seduces as their story validates them as leaders in their field.
Sparkling wine producer Nyetimber heroes their pioneering role in the space as one of the first British vineyards, in turn rooting their positioning in innovation and courage in an increasingly competitive market.
Sharing similar geology and soils to Champagne in France, the South of England is the home of British wine, made clear by Nyetimber’s overt patriotic pride. Elegantly executed through rich video content and imagery, the brand invites the guest in to discover more — creating romance and a core legacy worth investing in for tomorrow.
I Don’t Think In Years But In Generations.
In 2022, a cask of 1975 Ardbeg Islay Single Malt Whiskey sold for an unbelievable $19m, with the winner receiving 86 bottles a year until 2026 of the uniquely mixed spirit from the barrel.
“Created in a bygone era when the Distillery still malted its barley onsite, the smoky, balanced spirit of cask No. 3 was distilled on Tuesday, 25th November 1975, and laid down to age in two separate casks – a bourbon and an Oloroso sherry.
Those casks were patiently matured by generations of Ardbeg’s skilled warehouse workers over 38 years. Then Ardbeg’s acclaimed Director of Whisky Creation, Dr. Bill Lumsden, decided to marry the two casks, creating an even more extraordinary single malt.
On 31st March 2014, he transferred their whisky into a single refill Oloroso butt, selected to give only the subtlest of wood influence. There it has remained ever since.
Today, more than 46 years after its story began, this single malt is a smorgasbord of sherried, smoky aromas and rich, elegant tastes.”
The cask of whiskey represents the brand's resilience, its fight to survive and ultimate triumph. A reflective moment for Ardbeg and one to admire from a spectator’s perspective.
Through authentic storytelling, brands are capturing hearts and minds — becoming far more memorable, valuable and enticing to investors.
2) True Craftsmanship
In line with the emerging enlightenment among global audiences, wine and spirit brands worldwide are investing in boosting their eco credentials without compromising on flavour profiles — many returning to more traditional methods of harvesting & production to do so.
Last year global brand Diageo began a three-year experiment to find the most effective regenerative farming practice — the findings of which they will share with the wider industry — as well as launching a sustainable farming academy under their festive staple, Baileys.
As climate chaos destabilises a slew of much-loved ingredients (rising temps mean a milder taste for coffee and more sugar acquired in wine grapes), the future of flavour will undoubtedly be earth-kind.
Scientists in Edinburgh are on a six-year mission to restore centuries-old whiskey flavours as the spirit becomes one of luxury’s highest-performing investment classes, demonstrating 428% growth in the past decade (outperforming cars, wine and watches).
Planning to test eight heritage barley varieties, including Britain’s most popular Chavallier and McCallan’s Golden Promise, the hope is they will reintroduce favourable aroma characteristics as well as resilience to changing climate stresses.
It's using innovation to bring back characteristics that have been lost by switching to newer varieties of barley... flavours and aromas that haven't been present in whisky for decades, if not longer.
Brands that show exceptional skill and unique methods attract great recognition & prestige. Through celebrating the people & experts involved, the brands can stand tall on a global stage and instil trust in the quality of their product and brand authenticity - tempting investors and drinkers alike.
3) Striking Design
We are innately drawn to exquisite items, wanting our lived experiences to be punctuated by the extraordinary. Psychologically the accumulation of unique things stimulates the brain in areas linked to the pleasure centre; emotionally we’re finding a connection to either ownership or to the items themselves.
Whilst what inside is arguably what counts, there’s no doubt that the vessel a drink comes in is what drives major value and prestige.
Take 818 Tequila. In 2022, the brand launched a 750ml figure-of-eight ceramic decanter for an ‘ultra premium blend 818 Reserve’ designed by Valerio Sommella and crafted by local artisans in Pachuca, Mexico. The beautiful bottle is distinctive, yet simple — one to display amongst your ceramics, art and keepsakes as a trophy of ownership.
Fellow Mexican tipple mezcal has made waves in the spirit industry in recent years, becoming far more common on drinks and cocktails menus next to its go-to counterparts. Mezcal brands are racing to be the most reputable players in the market, pushing the bounds of creativity.
Female-founded Oaxacan Mezcal is housed in a eye-catching modernist vessel that reflects its earthy, smokey taste. The creative direction is refreshingly clean and geometric: a far cry from the loudly branded labels and bottles which punctuate shelves of spirits.
Whilst producing highly-regarded American whiskey, WhistlePig pride themselves on not taking itself too seriously, pursuing ‘bold experiments’ ‘unbound by tradition’. They’re a refreshing antithesis to the many heritage whiskey brands saturating the market.
Standing out from the crowd, last year WhistlePig dropped a limited edition rye whiskey housed in the shape of a piggy bank, with the spirit dispensed from the pig’s rear end…
Whistlepig Piggybank 10 Year-Old Rye Whiskey. Launched Dec 2022.
From their production methods to launches, WhistlePig looks to defy establishment and encapsulate rebellion; bringing back the sheer joy of drinking which so many brands seem to snub in aid of being taken seriously.
With zero generations of tradition behind us, we’re only looking forward – This is the story of the next decade of WhistlePig – one that will bring new frontiers beyond Rye, even bigger age statements, stupendous complexity and undoubtedly more pig hijinks. There’s no better way to mark the occasion than with an incredibly delicious whiskey that arrives from behind.
Brands who challenge the norm and expectations of wine and spirit design pave the way for innovation and differentiation in the market.
4) Collaborations
For years, we’ve seen exciting partnerships between wine and spirits companies with lifestyle brands to create fusions of the finer things in life. And it works.
By collaborating with fellow brands who share a penchant for excellence., luxury labels are able to enter new realms, tap into niche and potentially new audiences and delight loyal fans with opportunities to invest in one-of-a-kind launches.
In honour of National Tequila Day last year, Patrón dropped its final collaboration with Lalique, the renowned French glassmaker. The decadent crystal bottles are works of art in their own right as well as physical homages to the brands’ shared values of mastery, craft, world-class quality and attention to detail.
Since 1945, Chateau Mouton Rothschild’s has partnered annually with an artist to create unique visuals for their vintage bottles of wine. In December, Rothschild unveiled their latest label by Doig for their 2020 Vintage. The painter joins a list of artistry greats who have partnered with Rothschild, from Anish Kapoor and Keith Haring to David Hockney to Picasso.
Doig commented, ‘The painting shows something of what goes on behind the scenes in the production of wine, what happens offstage, as it were. It’s a sort of ode to workers, to all those involved at the various stages of making a wine before it’s finally bottled. It’s a dream with a romantic streak, as if someone spontaneously decided to sing in the vines. It’s a moment of poetry, where you can take your time. It’s neither really day nor really night, but rather something in between, between waking and sleeping. It is possible to see it as a progression, a dream journey in the world of the harvest.’
In honour of another art, Remy Martin has had a long standing partnership with RnB legend Usher to highlight ‘the cultural connection between Cognac and American music since 1917 in France, and how the two have been synonymous ever since.’
They’ve most recently collaborated on a unique 50-bottle drop with the brand’s first NFT-backed launch on Blockbar, simultaneously sponsoring Usher’s world tours, after parties and one-off events.
Usher’s ‘A Taste of Passion’ Remy Martin Edition on Blockbar used AI to transform his description of the tasting notes into an avant-garde label. Those who got their hands on the 25 bottles available to the public immediately received the NFT of the artwork as receipt for ownership with the ability burn and ‘redeem’ the bottle whenever they would like. The collection sold out immediately, with the product’s digital twin being remarketed for triple the original price within minutes.
Rémy Martin | Usher x 1738 A.I. Powered
The collaboration introduces Cognac to younger generations of drinkers, doing wonders for brand discoverability and evolution through decades.
Creating positive associations and relationships with influential individuals allows brand to drive new traditions and root them sturdily in popular culture. Through inventive partnerships, brands remain culturally relevant and flexible — and as a result, an ever-evolving asset of value for investors.
5. Memorable Experiences
Brands that invite their customers in to ‘behind the scenes’ and opportunities to learn reap rewards in brand loyalty and reputation, further imbuing value.
Through intensive customer research, Johnnie Walker founded a desire among consumers to discover whisky but they were often derailed due to a lack of knowledge and inability to confidently navigate the category. These insights formed the basis of its immersive flagship store in Edinburgh.
Guests can discover their perfect whisky match based upon their taste preferences via the ‘flavour finder table’, where they can start their whisky journey, learn more about their favourite blend, or discover single malts in their personal ‘flavour profile’.
Johnnie Walker's Flagship Store. Princes Street, Edinburgh.
The benefits are manifold. Through crafting an introductory educational experience, Johnnie Walker becomes the ‘entry level’ whisky for explorative drinkers, helps to widen the audience demographics and subsequent demand, and creates a more personal relationship with customers.
Wine and spirit merchants Berry Bros & Rudd offer a Cellar Plan service within their collecting hub. Members are assigned a dedicated Private Account Manager who will expertly curate the perfect collection for that individual client. The act of selecting, decanting and pouring no longer relegated to a butler. Accumulating and housing private collections has become quite the art form.
Obviously, membership comes with a custom app because it’s 2023 and BBR also offers state-of-the-art warehouse storage for those who perhaps don’t want the wine display for dinner party kudos. The app enables wine-fanatics to sell easily as well as bid for wines to perfect their collection.
What’s Next for Imbibers & Investors
There’s a general paradigm shift towards longevity. With populations casting off throwaway culture in favour of items with emotional durability as well as financial. Of course, accumulating zeros isn’t exactly offputting.
Numbers are being placed on the back burner in favour of more abstract meanings, making the phrase ‘quality over quantity’ even more cliché than it already was. It’s a potent movement to be in, a sink-or-swim dynamic for luxury brands.
The forward-thinking among them will find the balance between conversion and building a brand with connection and value. How they go about it will be guided by founding spirit and maybe a dram for some dutch courage.
Whether it’s through storytelling, expert craftsmanship, bold branding choices, collaborations or immersive experiences, our advice is this: be as much a psychological success as an economic one.
Placing brands front of mind is a speciality of our practitioners. With a deep understanding of cultures, behaviours and tastes and well-aged barrels of creative vision, we know what it means to connect with the high-net-worth – some of the most discerning people on the planet, who want to invest in emotional links and expressive purchasing decisions. Chat to one of our consultants via hello@matterofform.com and let’s build bonds with your clientele that go beyond “financially sound” to enduring value across every dimension,
