Cult Insider

EDITION 016 | FEBRUARY 2024

Exploring the Complexity of Wine Market Liquidity

Written by - Cult Wines Team

Dmitry Selemir, Head of Quantitative Solutions, takes us through the intricate challenge of developing a liquidity indicator for the fine wine market. This endeavour is no small feat. The advantages of possessing such an indicator are manifold, aiding portfolio managers in tasks ranging from the creation of market benchmarks to portfolio rebalancing. However, the fine wine market's inherent complexities and lack of transparent data present significant obstacles.

Market liquidity is fundamentally about the ease of buying and selling assets at stable, transparent prices. Yet, transparency is precisely what the fine wine market lacks. Most transactions occur out of public view, with critical information on deals between negociants, merchants, and investors remaining undisclosed. This opacity extends to pricing information, where even publicly listed prices can be outdated or unreliable, further complicating the liquidity assessment.

Despite these challenges, Dmitry points to emerging platforms and data sources like Wine-Searcher and Liv-ex as valuable, albeit limited, windows into the market's dynamics. These tools offer insights but capture only a fraction of the market's full breadth.

The scarcity of reliable data necessitates a creative approach to assessing liquidity. Dmitry describes leveraging Wine-Searcher and Liv-ex data to navigate around the data void. Wine-Searcher, in particular, provides a broad view of market prices. However, it has its limitations, such as the issue of brokering activity and the lack of depth indicators for specific offers.

The article dives into the nuances of trading in bond versus ex-tax and with-tax formats, highlighting the complexities these different trading conditions introduce into liquidity assessments. Additionally, the discussion touches on the importance of format considerations, prioritising case formats over single bottles to better align with the wine investment market's preferences.

A significant portion of the market visibility comes from offers for sale, with actual bidding activity remaining a minor component. This situation reflects historical market operations and the current limitations of trading platforms in facilitating sufficient trading volumes. The article critically examines the nature of these offers, noting the challenges they pose in accurately assessing market liquidity.

The culmination of Dmitry's exploration is the development of a "liquidity indicator" for Cult Wines, designed to provide a comparative measure of liquidity across different wines. This innovative approach involves calculating indicators based on Wine-Searcher and Liv-ex data, tailored to reflect the market's activity levels and trading frequency.

The full article promises a comprehensive exploration for those intrigued by the complexities of this unique market and the innovative approaches to understanding its liquidity and the sophisticated methodologies to navigate them.

Read the full article

News in brief

Apple Vision Pro: A New Era for the Drinks Industry?

The Apple Vision Pro, priced at $3,499, introduces augmented reality or "spatial computing" to the masses, potentially revolutionising the drinks industry. This technology merges the digital and real worlds, offering immersive experiences like virtual wine tastings with real-time translations and interactive learning. It could transform on-trade operations with applications for inventory management and enhance consumer transparency by providing instant product information. While widespread adoption may take years, Vision Pro's impact on drinks education, on-trade efficiency, and consumer engagement could be profound, mirroring the transformative journey of mobile phones from niche gadgets to indispensable tools.

Château Angélus Launches 'Le Majestueux' in a Stellar Limited Edition

Château Angélus celebrates its 2022 vintage, "Le Majestueux," with a unique bottle design featuring 20-carat gold and mother-of-pearl, symbolising a new era for the esteemed St-Emilion estate. A decade after its last special edition, the estate presents this bottle as a tribute to one of its most successful vintages. Inspired by celestial themes and a personal touch of jewellery art, the design marks a historic turning point for Angélus following its departure from the St-Emilion classification. This move signifies a quest for unparalleled excellence, unbound by previous norms, as the estate embarks on a future of freedom and extraordinary ambition.

London to Bordeaux: Direct 'Wine Train' Set for 2026 Launch

A new direct train route from London to Bordeaux dubbed the 'wine train', is set to launch in 2026, offering Brits a direct link to France's largest wine-producing region. This route, operated by HS1, aims to cut travel time to around five hours by bypassing Paris, enhancing access to vineyard tours and wine tastings in southwest France. The initiative, part of a broader plan to utilise the Channel Tunnel's capacity more effectively, also hints at future direct connections to other European cities, including Cologne, Frankfurt, and Geneva, potentially transforming London's St Pancras into a hub for European rail travel.

Lauren Delahoy, CRM Manager - Cult Wines - 2022 Gribble Bridge Rosé

What we’re drinking

2022 Gribble Bridge Rosé

Lauren Delahoy, CRM Manager - Cult Wines

• Biddenden is a family-owned and managed vineyard in Southeast England, established initially as an apple orchard. In 1969, they ventured into viticulture, dedicating one-third of an acre to grape cultivation, and producing their inaugural wine in 1972.

• During the recent months of cold and wet weather, I needed a refreshing beverage reminiscent of sun-soaked gatherings with friends, which led me to rediscover Gribble Bridge Rosé, a cherished local favourite.

• Crafted from a blend of Ortega, Dornfelder, and Pinot Noir grapes sourced from their vineyard, this Rosé epitomises the essence of their terroir. Best enjoyed when chilled, it offers a delightful sensory experience.

• The first sip was vibrant with raspberry notes, gradually revealing subtle hints of strawberry as the wine lingered. Its gentle acidity and harmonious interplay between sweetness and dryness render it effortlessly drinkable.

• Versatile in its culinary companionship, this well-balanced Rosé complements a range of dishes, from spicy fare to cheese and seafood, enhancing the nuances of each flavour profile.

Our fine wine feature

Journey through Lebanese wine heritage with Chateau Musar

Written by - Aarash Ghatineh, CRO - Cult Wines

Nestled in the picturesque Bekaa Valley, amid the rugged landscapes of Lebanon, lies a winery that embodies the essence of resilience, tradition, and excellence in winemaking – Chateau Musar. With a legacy spanning decades and a reputation that transcends borders, Chateau Musar is a beacon of Lebanese wine craftsmanship, captivating the palates of oenophiles worldwide.

The legacy of Chateau Musar is one steeped in history and passion, rooted in the vision of the late Serge Hochar, a visionary winemaker hailed as a pioneer in Lebanon's wine renaissance. Founded in 1930, by Serge’s father, Gaston Hochar, who was inspired by Lebanon’s 6,000-year winemaking tradition and his travels in Bordeaux the winery endured tumultuous times, including civil unrest and conflicts, yet emerged stronger, fortified by a commitment to quality and tradition.

Under Serge's stewardship, Chateau Musar gained international acclaim for its distinctive wines, characterised by their complexity, depth, and age-worthiness. Drawing inspiration from both Old and New World winemaking practices, Serge imbued each bottle with a sense of terroir, reflecting the unique microclimate and soil of the Bekaa Valley.

Journey through Lebanese wine heritage with Chateau Musar

The winemaking techniques of the Hochar Family

At the heart of Chateau Musar's success lies its unwavering dedication to traditional winemaking techniques, passed down through generations of the Hochar family. Embracing organic and sustainable practices, the winery eschews modern inventions, allowing nature to shape the character of each vintage.

Hand-harvested grapes, indigenous yeast fermentation, and extended ageing in French oak barrels are a few hallmarks of Chateau Musar's winemaking philosophy. Chateau Musar practices minimal intervention winemaking, using natural yeasts and eschewing filtration and fining techniques. This meticulous approach yields wines of remarkable complexity and nuance, evolving gracefully over time to reveal layers of flavour and texture.

Situated at the crossroads of ancient civilisations, the Bekaa Valley boasts a terroir ideally suited for winemaking, characterised by its limestone-rich soils, Mediterranean climate, and high-altitude vineyards. The valley's warm days and cool nights create optimal conditions for grape ripening, resulting in wines that strike a harmonious balance between fruit expression and acidity.

Chateau Musar is famous for its unconventional blends, often incorporating Bordeaux grape varieties like Cabernet Sauvignon, Cinsault, and Carignan. This unique terroir imparts a distinctive character to Chateau Musar's wines, imbuing them with a sense of place and identity that sets them apart on the global stage.

A glimpse into Chateau Musar's vintage distinctions

For enthusiasts seeking to experience the pinnacle of Chateau Musar's craftsmanship, exploring the winery's cellar is a journey through time and terroir. While each vintage tells a story, specific years stand out for their exceptional quality and ageing potential. Critically acclaimed vintages such as 1999, 2001, and 2010 showcase the depth and complexity that define Chateau Musar's wines, with critics lauding their balance, structure, and age-worthiness.

• 1999 Chateau Musar Rouge
"A vintage that showcases the resilience and complexity of Musar's vineyards amidst challenging conditions. The wine reveals a tapestry of dark fruits, leather, and spice, with a robust structure that promises further evolution."
- Jancis Robinson

• 2001 Chateau Musar Rouge
"An exceptional vintage for Chateau Musar, the 2001 combines elegance with power. Layers of cassis, dried cherries, and a hint of tobacco lead to a silky, enduring finish. A testament to the winery's craftsmanship."
- Robert Parker's Wine Advocate

• 2010 Chateau Musar Rouge
"The 2010 vintage is a vibrant expression of the Bekaa Valley, with a lively bouquet of red berries, violets, and a touch of oak. The palate is well-rounded, with a refreshing acidity that complements its depth."
- Wine Spectator

These wines, with their fruity, velvety tannins and lingering finish, exemplify the mastery of the Hochar family and the unique terroir of the Bekaa Valley.

Chateau Musar's performance in the Cult Wines Top 100 Wines of 2023 Analysis underscores its exceptional standing in the wine investment market, driven by impressive short-term and long-term returns.

With an average 1-year return of 34.2%*, it significantly outpaces many of its peers, reflecting strong demand and appreciation for its vintages. This immediate growth, coupled with an 89.4%* return over three years and a remarkable 164.4%* over five years, positions Chateau Musar as a premier choice for those seeking investment-grade wines.

Moreover, Chateau Musar's strategic market positioning amplifies its appeal among a wide audience of investors and collectors. Despite its stellar performance, it maintains an accessible average price point of £60 per bottle, compared to others mentioned in our Top 100 Wines of 2023, with an average of £1,347.

This blend of affordability, quality, and strong market performance cements Chateau Musar's status as a key player in the global wine investment landscape.

Honouring tradition and embracing innovation

As Chateau Musar continues its journey into the future, the legacy of Serge Hochar lives on, inspiring a new generation of winemakers to push boundaries while staying true to their roots. In the heart of the Bekaa Valley, amidst vine-clad hills and sun-drenched landscapes, Chateau Musar stands as a testament to the enduring power of passion, perseverance, and the pursuit of excellence in winemaking. With each bottle bearing the Chateau Musar label, wine enthusiasts are invited to embark on a sensory voyage through Lebanon's rich winemaking heritage.

*Source: Cult Wines and Wine-Searcher, analysing performance from January 1st, 2023, to December 31st, 2023.

Explore & travel

Basque in the Beauty – The Allure of Spain’s Vibrant Basque Country

Written by - Connor Adams, Relationship Manager EMEA - Cult Wines

From San Sebastian to Pamplona, then Biarritz by proxy of Bayonne, I was lucky to enjoy a week traipsing around the Basque Country last Summer. Enjoying endless sunshine, friendly faces and, of course, my fair share of Vino, Cerveza and Pintxos. The mixing of cultures on the border of Spain & France had always fascinated me, and I was keen to explore and form my own memories and experiences.

San Sebastian lived up to the hype! A perfect mix of beachside relaxation, old-town exploration and endless Pintxos to accompany the evening glass of Vino. San Sebastian is one place I would happily book and go back to when making future holiday plans.

When you're in San Sebastian, make sure to try a 'Gilda' pintxo. It's a simple but delicious stick of olives, anchovies, and pickled peppers. It's salty, a bit tangy, and has a kick. Have it with a glass of Txakoli, a local white wine that's a bit fizzy and dry. This pairing really shows off what Basque food is all about.

Pamplona is home to the San Fermin Festival, and this was undoubtedly an exciting time to be in town, given the famous Running of the Bulls Festival that occurred each morning we were there.

Basque in the Beauty – The Allure of Spain’s Vibrant Basque Country

In the bustling streets of Pamplona, seek out 'Pintxo de Solomillo'—a succulent piece of sirloin topped with roasted peppers and a slice of foie gras. This rich and flavorful pintxo goes beautifully with a glass of Rioja, a bold red wine that stands up to the robust flavours of the meat.

Outside of this, it is undoubtedly a student town; the narrow streets are endearing, and as is often the case, the local bar patrons tend to spill out onto the streets as the night progresses.

Biarritz is the surfside town that houses many a Parisian holidaymaker and is beautiful in its own right. However, as far as the surprise of the trip goes, that must go to Bayonne. A slight mix-up with the hotel booking location meant I found myself much closer to Bayonne than Biarritz, and in hindsight, I wouldn't have had it any other way. Biarritz is the flashier cousin, but Bayonne exhibits the quieter Basque charm that gives an authentic feel. Bar hopping and dinner on the canal were highlights.

Sadly, I didn't make it on this trip, but how could I not mention the Rioja region? The anticipation grows as I imagine pairing a classic Rioja Reserva with 'Bacalao al Pil Pil,' a traditional Basque salt cod dish in a garlic and olive oil emulsion. This pairing promises to be a delightful exploration of Basque culinary heritage. I like to think I'm saving it for a more "focused work trip" to study up-and-coming wines in the region. Watch this space!

The entire region shows off its tradition, history and a natural beauty that endears them to any traveller.