Investable Wine Markets Hit New Highs in 2022

Fine wine markets had another record year in 2022 as investors’ interest in alternative, tangible assets continued to grow, but there are warning signs of weakening sales in the short term, according to a year-end report from Liv-ex, a global marketplace for the fine wine trade.

All the major indices compiled by Liv-ex reached new highs and outperformed major equities and commodities this year, according to Liv-ex.

Liv-ex Fine Wine 1000, the broadest index of the fine wine market, was up 16.1% year over year, while the benchmark Liv-ex 100 rose 3.8%, according to the report released Thursday.

Those results greatly outperformed major equities. By comparison, the S&P 500 lost 15.6% year over year, while Hong Kong’s stock market benchmark, the Hang Seng Index, dropped 19.8% and London’s FTSE 100 Index fell 17%.

“As a diminishing asset which encourages long-term storage, fine wine is an inherently low-volatility investment. This gives it advantages over mainstream assets especially in turbulent economic times,” Liv-ex said.

However, there are signs of a slowdown in fine wine markets due to supply chain turmoil caused by rising energy prices, according to the report. Despite its annual gain, the Liv-ex 100 recorded its first decline in 18 months in July, and again in October and November.

While trade volume hit a new high, it only increased 2.4% in 2022, compared to a 10.4% rise last year. The number of active buyers for wines identified by specific vintages, which tend to have higher price points, fell from a year ago, Liv-ex said.

A survey of Liv-ex merchant members also pointed to a less promising future, with a slight majority of respondents having a “neutral” or “quite pessimistic” view about next year. Two respondents even predicted that the Liv-ex 100 Index would fall more than 25% in 2023.

Merchant members noted their continued concerns about the potential of a global recession, rising logistics costs, foreign exchange volatility, and a loss of consumer confidence, according to the Liv-ex survey.

“The fine wine market has been on the up since 2015. An increasing amount of indicators are pointing to a pullback in the short term,” Justin Gibbs, Liv-ex’s deputy chairman and exchange director, said in a statement. “But the wine market has never been about the short term.”

The marketplace has spoken and, at least for now, it’s showing preference for hybrids and plug-in hybrids (PHEVs) over battery electrics. That makes Toyota’s foot dragging on EVs (and full speed ahead on hybrids) look fairly wise, though the timeline along a bumpy road still gets us to full electrification by 2035.

Italian supercar producer Lamborghini, in business since 1963, is also proceeding, incrementally, toward battery power. In an interview, Federico Foschini , Lamborghini’s chief global marketing and sales officer, talked about the new Urus SE plug-in hybrid the company showed at its lounge in New York on Monday.

The Urus SE interior gets a larger centre screen and other updates.
Lamborghini

The Urus SE SUV will sell for US$258,000 in the U.S. (the company’s biggest market) when it goes on sale internationally in the first quarter of 2025, Foschini says.

“We’re using the contribution from the electric motor and battery to not only lower emissions but also to boost performance,” he says. “Next year, all three of our models [the others are the Revuelto, a PHEV from launch, and the continuation of the Huracán] will be available as PHEVs.”

The Euro-spec Urus SE will have a stated 37 miles of electric-only range, thanks to a 192-horsepower electric motor and a 25.9-kilowatt-hour battery, but that distance will probably be less in stricter U.S. federal testing. In electric mode, the SE can reach 81 miles per hour. With the 4-litre 620-horsepower twin-turbo V8 engine engaged, the picture is quite different. With 789 horsepower and 701 pound-feet of torque on tap, the SE—as big as it is—can reach 62 mph in 3.4 seconds and attain 193 mph. It’s marginally faster than the Urus S, but also slightly under the cutting-edge Urus Performante model. Lamborghini says the SE reduces emissions by 80% compared to a standard Urus.

Lamborghini’s Urus plans are a little complicated. The company’s order books are full through 2025, but after that it plans to ditch the S and Performante models and produce only the SE. That’s only for a year, however, because the all-electric Urus should arrive by 2029.

Lamborghini’s Federico Foschini with the Urus SE in New York.
Lamborghini

Thanks to the electric motor, the Urus SE offers all-wheel drive. The motor is situated inside the eight-speed automatic transmission, and it acts as a booster for the V8 but it can also drive the wheels on its own. The electric torque-vectoring system distributes power to the wheels that need it for improved cornering. The Urus SE has six driving modes, with variations that give a total of 11 performance options. There are carbon ceramic brakes front and rear.

To distinguish it, the Urus SE gets a new “floating” hood design and a new grille, headlights with matrix LED technology and a new lighting signature, and a redesigned bumper. There are more than 100 bodywork styling options, and 47 interior color combinations, with four embroidery types. The rear liftgate has also been restyled, with lights that connect the tail light clusters. The rear diffuser was redesigned to give 35% more downforce (compared to the Urus S) and keep the car on the road.

The Urus represents about 60% of U.S. Lamborghini sales, Foschini says, and in the early years 80% of buyers were new to the brand. Now it’s down to 70%because, as Foschini says, some happy Urus owners have upgraded to the Performante model. Lamborghini sold 3,000 cars last year in the U.S., where it has 44 dealers. Global sales were 10,112, the first time the marque went into five figures.

The average Urus buyer is 45 years old, though it’s 10 years younger in China and 10 years older in Japan. Only 10% are women, though that percentage is increasing.

“The customer base is widening, thanks to the broad appeal of the Urus—it’s a very usable car,” Foschini says. “The new buyers are successful in business, appreciate the technology, the performance, the unconventional design, and the fun-to-drive nature of the Urus.”

Maserati has two SUVs in its lineup, the Levante and the smaller Grecale. But Foschini says Lamborghini has no such plans. “A smaller SUV is not consistent with the positioning of our brand,” he says. “It’s not what we need in our portfolio now.”

It’s unclear exactly when Lamborghini will become an all-battery-electric brand. Foschini says that the Italian automaker is working with Volkswagen Group partner Porsche on e-fuel, synthetic and renewably made gasoline that could presumably extend the brand’s internal-combustion identity. But now, e-fuel is very expensive to make as it relies on wind power and captured carbon dioxide.

During Monterey Car Week in 2023, Lamborghini showed the Lanzador , a 2+2 electric concept car with high ground clearance that is headed for production. “This is the right electric vehicle for us,” Foschini says. “And the production version will look better than the concept.” The Lanzador, Lamborghini’s fourth model, should arrive in 2028.