Blue Chip Wines Not Only for the Rich and Elite
What is Blue Chip?
So what is a “blue-chip” or how can one define blue-chips? Originally the term “blue-chip” comes from gambling; to be more precise it came from poker (the card game), as the blue poker chips indicated the highest and most substantial denomination or value. Afterwards, the term blue chip was taken over by the stock and share markets, since blue-chip companies nowadays are referred to as the most powerful and largest companies in terms of market capitalization.
Therefore, blue chip is a naturally recognized, well established and financially sound company, or its shares. The term also implies financial strength and stability. Blue chip stocks are seen as a less volatile investment than owning shares in companies without blue chip status because blue chips have an institutional status in the economy.
What are Blue Chip Wines?
So when the term “blue-chip” refers to the biggest companies or their corresponding shares on the stock markets, then what are blue-chip wines? As the name suggests, blue-chip wines refer to the world’s most expensive and prestigious wines. Only selected Bordeaux and some Burgundy wines have the pleasure to have blue-chip status, as they consistently produce the world’s most expensive and highest quality wines.
Not all Bordeaux wines have gained this elite status, but only a few of the so called Grand Crus. These include Bordeaux’s left bank first growths (Lafite Rothschild, Latour, Margaux, Haut Brion and Mouton Rothschild) and the non-classified Grand Crus of the right bank (Petrus, Le Pin, Ausone and Cheval Blanc). From the Burgundy region it is only the Domaine de la Romanee Conti, of which all 5 wines in their production line have reached blue chip status. Due to the continuing production of high quality fine wines and the increasing prices, this blue chip classification reflects their brand.
It is important to point out that very expensive wines are not necessarily blue-chip wines. Since the term “blue chip” is very commonly used in the investment world, blue chip wines are the ones which have proven to be sound financial assets that promise high returns for investors.
This also does not mean that wines that do not have blue-chip status are not suitable for investment purposes; just like it is not guaranteed that every blue chip wine will show significant capital growth potential.
Simply put, wines with blue-chip status have repeatedly shown significant growth and commanded the world’s highest prices on a consistent basis; therefore these fine wines have steadily grown in reputation and value.
Investing in Blue Chip Wines
Since blue chip wine investments are a fairly safe investment, what would this mean for Investment grade Bordeaux wines, which are not of blue chip status? An investment in non blue chip wines would obviously mean that the risk is slightly increased, but the potential returns are also significantly higher.
Moreover, the reason as to why certain top chateaux have gained blue-chip status is because, like with stocks and shares, blue chip investments are very secure. They are highly unlikely to fall in value and promise decent returns (in the case of stocks and shares, even with dividends). A blue chip wine investment is also very secure and grows significantly more in value than blue chip shares. That is mainly due to the limited supply and skyrocketing demand for such luxury goods.
Investing in blue chip wines is slowly but surely taking off as a profitable alternative investment in today’s financial market; hardly a surprise, given the blue-chip status and nature of the top Bordeaux wines.
Bordeaux Traders - The Fine Wine Investment Brokerage GmbH
Mooslackengasse 17, 1190 Vienna
Phone: +43 676 490 51 19