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2
Through
Provides
“Investment Grade Wine” – Cases of physical wine from various vintages,
regions and producers
Diversification, to establish a collection, store of value, real asset
UK market, exchanges, direct
Individuals, Wealth Managers, Collectors, Trusts and Estates
WHAT
HOW
WHY
WHO
3
Through
Provides
Provenance, Price, Profile and Performance
Analyze the market, trade on secondary market, write research
Wealth managers, investment advisors, to clients and clients to wine
Technology – Advent, Wine Owners, Liv-Ex, Auctions
ADVISE
CONNECT
RESEARCH
VALUE
THE MARKET INFLUENCERS - WOMEN
5
Women and Wine – The Stats Women do have more fungiform
papillae and taste buds
34% of all wine drinkers are
high frequency, 50% are women
Of 135 Master Sommeliers in
the US, 19 are women
Approximately 10% of the
winemakers in California are
women
There are 366 Masters of Wine,
93 are women
Men spend on average $4.00
more than women on wine 6
Market Trends
70% of all wine sales in the
US are made by women
As a demographic over 55%
of the wine drinkers are
women, 100 million wine
drinkers in the US
80% of the readers of Wine
Spectator, Decanter and
Wine Enthusiast are men
Target millennial women7
Marketing to Women, Really?
Skinny Girl
Smarty Pants, Rebel
Red, Drama Queen
Be, Flirty, Bright,
Fresh
Relax
Chateau
Domaine
Napa Valley
Willamette Valley
Burgundy
Premier Cru
First Growth8
WHAT
10
11
What Wine?% of Wines Offered by Region on Liv-ex
Argentina Portugal Bordeaux Red Bordeaux White
Burgundy Red Bugundy White USA Aus
Rhone Italy Spain Champagne
Chile NZ SFR Germany
Alsace
12
Burgundy, Bordeaux,
Champagne, Rhone, Italy,
California, Niche
The further from the vine, the lesser the
wine
Most liquid and transparent wines,
UK, France or exchange traded
Current and back vintages
The Secondary
Market for
Investment Grade
Wine
IGW market, as measured by the London
International Vintners Exchange, Liv-ex, is
approximately $8 billion.
Niche market with unique supply and
demand characteristics
Secondary market provides liquidity, price
transparency
Daily pricing allows for “mark to market”
valuation
Secondary market volumes of wine are at a
record high with over 400 traders representing
33 countries
Christie’s Wine Department has
approximately 7,500 clients
13
Liv-ex Market
Recent Trades
Latest 25 Trades on Liv-ex
Source: Liv-ex as of 09/19/14. GBP. Current exchange rate 1.65.
14
Liv-ex 100 Index
C Region Wine Vin Size Last Eu/btt Qty
SEP bdxr Angelus 2012 12x75 2,139 223.3 10
SIB bdxr Cos d'Estournel 2011 6x75 390 81.5 14
SIB bdxr Reserve Comtesse 2010 12x75 220 22.9 4
SIB bdxr Pontet Canet 2009 12x75 1,330 138.9 2
SIB bdxr Reserve Comtesse 2009 12x75 235 24.5 10
SIB bdxr Duclot Collection 2007 9x75 2,450 340.9 1
SIB bdxr Malescot St Exupery 2006 12x75 339 35.4 8
SIB bdxr Mouton Rothschild 2005 12x75 3,420 357.7 1
SIB bdxr Haut Brion 2003 6x75 1,190 248.5 1
SIB bdxr Latour 2003 12x75 6,380 664.8 1
SIB bdxr Pontet Canet 2003 12x75 650 68.0 1
SIB bdxr Palmer 1996 12x75 1,550 161.7 1
SIB bdxr Mouton Rothschild 1993 12x75 3,015 315.8 1
SIB bdxw Yquem 2009 12x75 3,340 349.2 1
SIB bdxw Pape Clement Blanc 2005 6x75 495 103.5 2
SIB bgnr Lambrays, Clos Lambrays 2012 12x75 1,144 119.5 6
SIB bgnr Bouchard Pere et Fils, Vosne Romanee Suchots
2009 6x75 235 49.1 1
SIB cham Moet & Chandon, Dom Perignon 1999 6x75 440 92.0 5
SIB cham Bollinger, Special Cuvee NV 6x75 115 24.0 10
SIB rho Guigal, Cote Rotie Landonne 2010 12x75 2,690 280.7 5
SIB rho Guigal, Cote Rotie Mouline 2010 12x75 2,690 280.7 3
SIB rho Guigal, Cote Rotie Turque 2010 12x75 2,690 280.7 3
SIB rho Roquete, Chateauneuf Du Pape 2010 12x75 145 15.2 2
SIB rho Clos Papes, Chateauneuf Du Pape 2009 12x75 465 48.6 10
SIB sfr Tempier, Bandol Rose 2013 12x75 136 14.2 39
80
100120140160180200220240260280300320340360380
Jan
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Jan
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Jan
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Jan
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Jan
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Jan
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Jan
-11
Jan
-12
Jan
-13
Index Value (Dec 03 = 100)
WHY
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Wine – Growing Demand,
Rare and Regulated
17
Global wine market is valued at $200 billion
Lack of transparency, barriers to entry,
specialist knowledge
Auction house revenues for wine $400 million
US demand for wine up 34% since 2000
Source: International Organization of Vine and Wine, IWSR. Demeter Group
Investment Grade Wine
18Source:Liv-ex
At a cyclical low point in traditional five year cycle
Supply diminishing, 2010 the last great vintage in Bordeaux,
Burgundy at historical low yields
Shift in market focus from Bordeaux to Italy, Champagne,
California
Market as measured by the Liv-ex 100 peaked in June 2011 and
has since pulled back
New trading platforms emerging helping transparency
80100120140160180200220240260280300320340360380
Jan
-03
Jan
-04
Jan
-05
Jan
-06
Jan
-07
Jan
-08
Jan
-09
Jan
-10
Jan
-11
Jan
-12
Jan
-13
Index Value (Dec 03 = 100)
Investables
S&P 500
Liv-ex Investables vs. S&P 500
“IOP” Demand
0
5
10
15
20
25
30
35
40
NorthAmerica
Asia-Pacificex. Japan
Japan Europe Latin America Middle Eastand Africa
GlobalAverage
ALLOCATIONS TO INVESTMENTS OF PASSION (%)
Other Collectibles - Wine, Coins, Antiques Alternatives Sports Investments
Alternatives Art Alternatives Luxury Collectibles
Alternatives Jewelry, Gems & Watches
19Source: World Wealth Report 2013. HAGI.
Art Market $58 billion
Collectible Cars $12
billion
Investment Grade Wine Market $10
billion
20
1 year change Q3 ‘12 to Q3 ’13, Art, -3%, Furniture -2%, Chinese 3%, Jewelry 3%, Watches 4%, Wine 3%, Cars 28%, Stamps 5%, Coins 10%, Index 8%
The Wealth Market
21Source: 2013 World Wealth Report.
Global High Net Worth Market
$46.2 trillion
Alternatives Market $4.6 trillion
Annualized Growth In HNW Investable
Wealth 6.5%
Ultra high net worth, $30 mm +, grew 10.9% 0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
US Japan Germany China UK
HIGH NET WORTH POPULATIONS('000)
2011 2012
1.2 1.7 7.3 10.2 11.6 10.81.1 1.7
7.110.1 11.4 10.7
1.3 1.8
7.510.9
12.7 12
1.4 2.2
8.3
13.115 15.9
A F R I C A M I D D L E E A S T
L A T I N A M E R I C A
E U R O P E N O R T H A M E R I C A
A S I A -P A C I F I C
INVESTABLE WEALTH ( U S $ T R I L L I O N )
2010 2011 2012 2015
HOW
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The Catalysts Top storage – further
from the vine the lesser
the wine
Entry point, relative
price, too expensive to
drink, upside
Parker Points, PPP,
production, brand
History of aging,
consistency of vintages
Provenance
Price
Profile
Performance
24
The Circle of Wine
AOCIA
Clients
Current
and
Future
Consumers
Producer/
Market AOCIA
Individuals
Collectors
Auction
Houses
Foundations
Endowments
Trust
Departments
Wealth
Advisors,
Brokers
•Wine producers, collectors and investors have an obligation to steward
the understanding of fine wine and future growth in the market
•Proper vintage management can support this process
•Engagement with younger demographics can help grow demand
25
Market Trends
Diversification away from
Bordeaux
Bordeaux now stabilizing,
new demand
Super Tuscans finding favor
Vintage champagne trading
well
Climate and price are
creating relative value in
back vintages26
Source: Liv-ex as of 9/12/14
Market Expands Beyond Bordeaux
27
21.1
22.2
25.5
30.6
31.3
31.7
35.2
35.4
38.3
40.4
41.4
42.9
45.3
49.2
62.6
82.8
88.7
145.0
400.0416.1
-50
0
50
100
150
200
250
300
350
400
450
2009 100 Point Wines Price per Point versus Performance
Sell off in Bordeaux
Creates Opportunity
The 2009 and 2010 First Growths had an
average rating of 99 points, two of the top rated
vintages of all time in Bordeaux.
Since the release of the 2009 vintage en
primeur, Lafite Rothschild has contracted over
40%, Mouton Rothschild 28%, Margaux 22%,
Haut-Brion 19%, and Latour 5%.
Looking at the return profiles of the 2000 and
1990 Lafites, there appears to be substantial
upside, with returns of 533% and 1,410%,
respectively.
2009 and 2010 Haut-Brion is the second least
expensive per Parker point at $98 and $99
respectively.
En primeur pricing appears to be a major driver
of volatility and market perception.
28Source: Liv-ex as of 9/17/13. Constant
currency of 1.55 USD/GBP
En Market
Production % Change Primeur Price RP EP$/PP MKT$/PP
Lafite Rothschild 20,000 (43) 18,600 10,540 98 190 108
Mouton Rothschild 15,000 (17) 12,013 9,920 98 123 101
Margaux 10,000 (22) 12,276 9,610 99 124 97
Haut-Brion 10,500 (16) 11,774 9,920 100 118 99
Latour 18,000 2 17,050 17,360 100 171 174
Average (19) 14,342 11,470 99 145 116
En Market
% Change Primeur ($) Price ($) RP EP$/PP MKT$/PP
Lafite Rothschild (41) 20,150 11,974 99 204 121
Mouton Rothschild (28) 12,090 8,680 99 122 88
Margaux (22) 13,175 10,230 99 133 103
Haut-Brion (19) 12,090 9,765 100 121 98
Latour (4) 17,050 16,275 100 171 163
Average (23) 14,911 11,385 99 150 114
En Market
% Change Primeur ($) Price ($) RP EP$/PP MKT$/PP
Lafite Rothschild 635 2,868 21,080 98 29 215
Mouton Rothschild 364 3,410 15,813 96 36 165
Margaux 370 2,472 11,610 100 25 116
Haut-Brion 192 2,868 8,370 99 29 85
Latour 359 2,868 13,164 98 29 134
Average 384 2,897 14,007 98 30 143
2010 First Growths Return Profile
2009 First Growths Return Profile
2000 First Growths Return Profile
29
Cos d’Estournel 2009
30
Ducru Beaucaillou 2009
31
Montrose 2010
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Guigal La Mouline, 2005
33
Chapoutier Ermitage l’ Ermite Blanc, 2009
34
DRC, DRC 2009
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Grange 2008
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Vega Sicilia 2004
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Sassicaia 2010
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Dom Perignon 1996
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Screaming Eagle 2010
WHO
41
Our Clients are Your Clients
Individuals
Financial Advisors
Wealth Managers
Financial Institutions
Collectors
Wine Educators
42
What Clients Want Access to wine
Easy to understand process
Trustworthy knowledge
Transparent inventory
Valuation services
Vintage management
Actionable content
Risk controls
43
AOCIA What We Do
Advise
Vintage Management
Research
Educate
Connect
Consult
Import
Taste – a lot
44
The
Differentiator
45
Platform provides analysis of vintages, regions, producers, vineyards, color etc.
Active portfolio management to
maximize returns and minimize risk
As a “wasting” asset wine deserves active
management, for both current and future
wine lovers
AOCIA’s platform is familiar and
transparent, it looks just like any traditional brokerage statement
Partnered with Advent Software recognized as the “gold” standard in
RIA community
46
SAMPLE STATEMENT
Wealth Managers and
Wine White Label
Customizable design elements
Static pages & content
Own URL/ SSL
White Label admin
Extensive security
Highly configurable
Data feeds/ Restful interfaces
Peer to Peer Fine Wine
Trading Exchange
The worlds first peer-to-peer
fine wine trading exchange
Assured trading process &
faster settlement
Wine Owners facilitates, does
not participate
49
Top Tips to Owning the List Start with Geography 101
Varietal, think region, if its hot, if its cold, basics of wine expression
Don’t play the margin game, Italian wines, lots of good but not great
Just because its from France or Napa it does not need to be expensive
Vintage matters in top wine, not as much in New World
Be willing to step outside of your varietal comfort zone
Be wary of Pinot from hot climates, 14% Pinots are an 80/20
proposition
Value regions, Jura, Languedoc, Spain, Southern Italy, Finger Lakes
New York, Argentina, Austria, Ontario, Sud-Ouest, Savoie, Rhone
50
Wine Menu Restaurant versus Retail
Chardonnay Cabernet Sauvignon
• Hedges, 2011, Red Mountain,
Yakima Valley, Washington $58/$20
• Colgin, Herb Lamb Vineyard, 2004,
Howell Mountain, Napa Valley,
California $775/$265
• Château Margaux, Premier Cru,
1995, Margaux $1200/$450
• Pichon Longueville-Comtesse de
Lalande, Réserve de la Comtesse,
2006, Pauillac $150/$40
51
• Au Bon Climat, Sanford &
Benedict Vineyard, 2010, Santa
Ynez Valley, Santa Barbara
County, California $70/$44
• Aubert, Lauren Vineyard, 2011,
Sonoma Coast, California
$225/$120
• Chevalier-Montrachet, Jean-
Marc Pillot, Grand Cru, 2008,
Côte de Beaune, $650/$300
• Bouzeron Aligoté, Aubert de
Villaine, 2010, Côte
Chalonnaise, $54/$20
THE WINES OF THE NIGHT
53
Sparkling
Domaine Chandon, Brut, Carneros
Whites
Blend, Seven Daughters, California
Viognier, Cline, Sonoma
Reds
Zinfandel, Kunde, Sonoma
Pinot Noir, Davis Byrum, Russian River
54
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