Ones and zeros may dictate the world, but those same data points reflect a new generation of professionals bent on living a comprehensive and sustainable life. Millennials and Gen-Z are integrating their consciousness into the careers they choose, the cities and homes they live in, and the journey their earned money takes along the investment trail.
The younger generations aim to rebrand what an authentic life looks like not just Monday through Friday, but 24-7 and through the vertical of their respective lives. Many work for companies focused on Diversity, Equity, and Inclusion (DE&I) and Environmental, Social, and Governance (ESG) targets. Along the way, some are investing in new ways to enjoy old pleasures.
Michael Doerr, CEO of Oeno Group, an investment advisory service in collectible wines, is trying a different approach to the investment model. The International Investor Awards named him the Wine Investment CEO of the Year Award for 2022, with the company awarded Best Global Wine Investment Firm two years running.
Doerr’s mission from the beginning has been to bring something different to the world of investing. It’s a full life cycle approach that connects a long-term investment model to the culture of wine enthusiasts.
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Nothing is ever recession-proof, but Doerr operates multiple offices worldwide, knowing that wine is celebrated during the good times and embraced during nail-biting periods of economic unrest.
Understanding Fine Wine Investment
For those with little understanding of an investment advisory for wine, Doerr explains the concept.
“It’s the investment in the appreciation of fine wine. Many people are unaware that they can invest in wine and that it rises in value,” says Doerr. “It represents about 5% of the wines on the market and is closer to pieces of fine artwork made in the most extraordinary ways and low in production with a huge following behind them. Asset appreciation works with supply and demand. As time passes, fewer bottles are on the market, and the price appreciates.”
According to Doerr, adding to the investment lifecyle, once the wine is bottled, it’s still evolving. “For instance, it can take 10-to-15 years for a Bordeaux to reach that ‘drinkable window’ state,” adds Doerr. “As a company, we buy [wine] stock early on, our investors and collectors hold on to that stock, and then we release it back into the market. By that time, it’s risen in price through supply and demand. Because the wine has evolved, it’s now drinkable at a high price.”
While some view the younger generation as a fast-moving crypto-buying segment, many young investors are more interested in long-term opportunities and tangible strategies to address the uncertainties of their financial futures. Doerr stresses that fine wine investment is not a highly liquid asset but a more sustained investment strategy.
“It acts more like a property waiting for a buyer to come into place that can take a year or two to sell,’ he says. “It should be treated more as an Incentive Stock Option (ISO) and part of a diversified portfolio. In most countries, it’s capital gains tax-free.”
Part of the appeal is the global market and volatility-free component. “When the market is thriving, everyone’s making money and spending money on wine. When the markets dive, everyone’s still spending money on wine, drinking more to get through the issue at hand,” states Doerr.
Doerr opines hypothetically if the U.K. stopped consuming wine altogether, it doesn’t make a difference to investors because consumers are still readily available worldwide. “We were tested when the Russia and Ukraine crisis happened,” adds Doerr. “Suddenly, no one could import into Russia, a big fine-wine-drinking country. But we saw no change because all the excess wine that would have sold in Russia was soaked up by China, India, the U.K., or North and South America.”
While many companies offer wine investment, the Oeno Group approach is unique because it improves on an old model by concentrating on all aspects of the wine life cycle. When Doerr approached this sector, he didn’t want to start up another wine investment company but looked to see how he could improve the model.
“I saw from the investment standpoint that the cycle was broken. I love it and put everything into it because there’s a lovely natural life cycle attached,” says Doerr.
“There are multiple investor-to-investor tie-ins created through a seamless and sustainable process. As soon as you find that consumer, you can sell assets at a profit to a happy consumer on the other end. Money is made, and the consumer can hold the asset or enjoy a beautiful bottle of wine with friends and family. It’s the most lovely life cycle of an investment.”
Doerr explains that with most other asset classes, someone along the way is losing out. But with fine wine, a different dynamic exists. “In fine wine, as long as you can bridge the gap between the collector and the investor to the consumer, it’s a match made in heaven,” he says. “The whole thing marries up.”
A spike in interest is growing within the younger generation. Five to ten years ago, fine wine investment was more of an old-fashioned model with an appeal to older segments of the population.
“We’ve tried to be a much newer, younger company open to the opportunities of everyone,” says Doerr. “We’ve seen huge growth in the younger generation (25-to-35-years-old) that are taking an interest. That generation appears more proactive in investments to find choices that match their lifestyle. They recognize that they need to make their money work harder than their parent’s generation.”
The Oeno Group is developing educational models as part of its future offerings. An online academy is already taking shape to educate more people on fine wine and investment. The goal is to share knowledge through podcasts and other sources so people can make their own decisions. It’s a financial literacy angle with fine wine at the helm.
“I think education is such an important tool. I’m a huge advocate for getting out there and educating investors on how this asset class works while bringing more attention to it,” shares Doerr. “No matter the age group, it’s significant on our radar to ensure we’re educating investors on how to invest safely in the sector.”
According to Doerr, the industry average market returns are usually between 8% and 12%. However, over the last three years, the Oeno Group has seen numbers climb toward the top of the spectrum. Last year alone, the rate of return for Oeno clients reached 15.56%.
Classic investing resembles traditional western education based on tried-and-true methods mitigating market risks in the name of stability, if not predictability. Financial literacy reaches into communities and empowers its respective citizens to craft a strategic path of financial independence.
Doerr, with returns that regularly exceed expectations, is laying a foundation of sustainable and enjoyable investing that allows the next generation to sip their returns while taking on a more vintage lifestyle.
Interviews have been edited and condensed for clarity.