Evgeny Strzhalkovsky on Building a Profitable Wine Portfolio

Winemaker and industry expert Evgeny Strzhalkovsky shares his insights on wine as an alternative investment asset class

Wine investment has become increasingly popular among collectors and investors. What’s driving this trend?

Evgeny Strzhalkovsky: Wine has truly emerged as a legitimate alternative asset class. We’re seeing both seasoned collectors and newcomers seeking portfolio diversification. What makes fine wine particularly attractive is its potential for capital appreciation over time, especially investment-grade bottles from established regions like Bordeaux and Burgundy, which have demonstrated consistent performance in global markets.

Unlike traditional investments, wine combines tangible asset ownership with the satisfaction of holding something crafted through centuries of expertise. It’s not just about financial returns—though those can be substantial—it’s about owning a piece of history and craftsmanship.

How exactly does the wine market function for investors?

Evgeny Strzhalkovsky: The fine wine market operates through well-established mechanisms including merchants, auction houses, and dedicated trading platforms. You’ll even find specialized wine search engines to benefit from this unique market. Investors who approach wine strategically need to understand quality markers, proper storage requirements, and market dynamics. Success really comes down to knowledge—understanding valuation factors, tax implications, and the patience to hold investments for several years.

What should someone know before entering wine investment?

Evgeny Strzhalkovsky: Wine investment operates as a tangible alternative asset class where investors purchase fine wines with the expectation of financial returns rather than immediate consumption. The market values quality, rarity, and provenance, with investment-grade bottles appreciating as they age and supply diminishes.

The key is understanding that you’re investing in investment-grade bottles as tangible assets that generate returns through price appreciation over time. Unlike stocks or bonds, these physical assets derive value from brand equity, vintage quality, and scarcity rather than market sentiment alone.

Can you explain the scale of this market?

Evgeny Strzhalkovsky: The fine wine market functions similarly to traditional exchanges, with an established secondary market worth over US$8 billion globally. Investors typically focus on wines from prestigious regions like Bordeaux, Burgundy, and Champagne. These bottles must meet specific criteria including producer reputation, vintage ratings, and storage provenance to qualify as investment grade.

What kind of returns can investors expect?

Evgeny Strzhalkovsky: Historically, fine wine delivers approximately a 10% compound annual growth rate over the long term. Leading wines have shown growth exceeding 100% over five-year periods. The top performers in 2025 valued over double what they initially cost, driven by scarcity, quality, and demand.

However, I always emphasize that past performance doesn’t guarantee future results. Wine investment requires patience and strategic selection.

Which regions and producers should investors focus on?

Evgeny Strzhalkovsky: Bordeaux remains the foundation of any serious wine investment portfolio. The region’s classification system and established market make it relatively accessible for investors. First Growth châteaux like Lafite Rothschild, Latour, and Margaux consistently command premium prices and demonstrate strong appreciation.

Burgundy offers tremendous potential but requires more specialized knowledge. The small production volumes and fragmented ownership create scarcity that drives value. Top producers from the Côte d’Or, particularly Grand Cru vineyards, can deliver exceptional returns.

Champagne, particularly vintage releases from houses like Dom Pérignon, Krug, and Cristal, also merit attention. The global demand for prestige cuvées continues to strengthen.

Don’t overlook emerging regions either. Super Tuscans from Italy, cult California Cabernets, and premium Australian wines are gaining traction in the investment market.

What about storage and authentication?

Evgeny Strzhalkovsky: This is absolutely critical. Investment-grade wine must be stored professionally in temperature and humidity-controlled facilities. Poor storage can destroy a wine’s value entirely. I recommend using bonded warehouses that specialize in wine storage—they provide the right conditions and detailed records of provenance.

Authentication is equally important. The market has seen issues with counterfeits, particularly for rare Burgundy and older vintages. Always buy from reputable sources and maintain comprehensive documentation. The original case, proper labels, and fill levels all matter significantly.

What are the tax considerations?

Evgeny Strzhalkovsky: In the UK, wine classified as a “wasting asset” with a lifespan under 50 years can be exempt from Capital Gains Tax, though this depends on specific circumstances. However, tax treatment varies considerably by jurisdiction. In some countries, wine is subject to capital gains tax, while others may have different classifications.

I always advise investors to consult with tax professionals familiar with wine investment in their specific location. The legal framework governing wine as an investment varies significantly between countries.

How should someone build a wine portfolio?

Evgeny Strzhalkovsky: Diversification is essential. Don’t put all your resources into a single region or vintage. I recommend spreading investments across Bordeaux, Burgundy, and other prestigious regions. Mix vintage years to spread risk—while certain vintages command premiums, having exposure to multiple years protects against vintage-specific issues.

Consider your time horizon as well. Some wines reach their peak drinking window within 10-15 years, while others can age for decades. Your portfolio should reflect your investment timeline.

Start with producers that have established track records and market liquidity. As you gain knowledge and confidence, you can explore more specialized or emerging opportunities.

What mistakes do new investors commonly make?

Evgeny Strzhalkovsky: The biggest mistake is buying wines at retail prices and expecting investment returns. Investment-grade wine should ideally be purchased en primeur or through the secondary market at appropriate pricing.

Another common error is inadequate storage. I’ve seen collections lose significant value because wines were kept in unsuitable conditions—basements with fluctuating temperatures, upright storage that dries out corks, or areas with excessive vibration.

Many newcomers also fail to maintain proper documentation. Provenance is everything in fine wine. Keep receipts, storage records, and any authentication documents meticulously.

Finally, some investors treat wine like stocks, expecting quick returns. Wine investment requires patience. The best returns typically come from holding quality wines for five to ten years or longer.

What’s your outlook for the wine investment market?

Evgeny Strzhalkovsky: The fundamentals remain strong. Global wealth continues to grow, particularly in Asia, where demand for prestige wines is expanding rapidly. Meanwhile, production of the finest wines remains limited—you can’t simply produce more Romanée-Conti or Pétrus to meet demand.

Climate change presents both challenges and opportunities. Some traditional regions face difficulties, while others may emerge as new sources of investment-grade wine. Adaptability and knowledge will be increasingly important.

Technology is also transforming the market. Blockchain authentication, digital trading platforms, and improved storage solutions are making wine investment more accessible and transparent.

Any final advice for aspiring wine investors?

Evgeny Strzhalkovsky: Education is your best investment. Taste wines, visit regions, read extensively, and talk to experts. The more you understand what makes a wine great, the better your investment decisions will be.

Start modestly and build your knowledge alongside your collection. Wine investment should be enjoyable as well as profitable. If you’re not passionate about wine, there are easier ways to invest your money.

Remember that while wine can deliver excellent returns, it’s not without risks. Market conditions change, tastes evolve, and individual bottles can suffer from storage or authenticity issues. Approach wine investment with both enthusiasm and caution, and you’ll find it a rewarding addition to a diversified portfolio.