LivEx Members See Global Economy as Biggest Challenge in 2023

The global economy will be the fine wine market’s biggest challenge in 2023, members of Liv-Ex said in a survey. 30% noted that a global economic downturn and regional recessions would impact the market, and 20% said currency volatility is a concern.

More than 625 members, ranging from startups to centuries old merchants, in 44 countries were surveyed in November, Liv-Ex said.

The second biggest challenge the global wine trade expects is logistic and supply chain issues, with 16% mentioning one or the other in their response. Some members noted additional paperwork due to planned UK duty changes and labeling as a headache, while others referenced ongoing disruption to Chinese imports.

Stock shortages accounted for 12% of answers. Many noted there needed to be more stock to satisfy demand, particularly the upcoming release of Burgundy’s 2021 vintage. Members also mentioned the increasingly limited released volumes of vintage Champagne.

Most in Demand Brands and Regions

41.8% of respondents stated that Burgundy is the region with the most demand. Low yields and restrained releases coupled with high demand were cited as the reason for this. Several referenced white Burgundy in particular, with one citing its ‘lack of supply and speculation,’ as a reason for its increased demand.

40% also indicated that Champagne was the most in-demand region, with the majority noting decreasing supply and high demand for vintage Champagnes. Liv-ex members shared that Champagne was a relatively good value compared to others, with substantial investment growth.

Bordeaux also remained a firm favorite in the wine trade. 9% indicated that it was the most in-demand region, with many praising its strong vintages, reliable quality, and value. Other responses included Tuscany (3.6%), California (3.6%), and, interestingly, whisky (1.8%).

One of the most agreed-upon brands in demand was Domaine de la Romannee-Conti (7%). A respondent noted that it was ‘consistently the most sought after and requested.’ Dom Perignon was also frequently mentioned (7%), with one London retailer noting that they sell Dom Perignon daily despite charging some of the highest prices in retail.

Customer Buying Patterns

While 14.5% shared that their customers’ buying patterns had remained the same, 10% said buyers had become more selective and 7% said portfolios had become more diversified. Several noted increases in Champagne (9%) and Californian (5%) buying. Others indicated that customers were spending more on average but emphasized that this was due to customers focusing on quality over quantity.

New Customers

48% indicated that their customer base had remained the same. In comparison, 37% reported an increase in new customers due to expanding their private client sales teams. The growth came from Asia and Europe, while another specified that although they had seen new customers, there were still fewer than in 2020 when Covid led to a boom in sales.

Wine Prices

60% of those surveyed predicted that the Liv-ex Fine Wine 100 Index would rise in 2023, which represents the price movement of 100 of the most sought-after fine wines on the secondary market. The most optimistic respondent expects gains of 45%; the most pessimistic predicts a drop of 28%.

Big Predictions for 2023

14% of respondents predict Burgundy price corrections, primarily on the most speculative brands, as prices are not sustainable in the long term. Many also believe Burgundy’s white wines will have a successful year.

7% of respondents forecast a resurgence for Bordeaux and predicted that there would be increased demand for the region. However, views on the region remained mixed. Equal amounts of respondents indicated that Bordeaux would have both a successful and a not-so-successful 2022 En Primeur campaign.

This demand also extended to Piedmont, where several suggested that the region would go ‘crazy’ and an increased interest in Barolo and California. Members also noted an increased interest from buyers of fine wine from other regions in Asia, Japan, Taiwan, Singapore, and South Korea.

Changing Role of Technology

While some believe that the industry is not ready for blockchain technology (and thus predicted its demise), most suggest that technology will continue to change how wine is traded. One respondent noted that customers would demand more transparency, more liquidity, and faster transaction time, more choices, and want it all online.