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The (Opus) One That You Want

  • Anthony Maxwell, Liv-ex Director

  • 29 Mar 2017 | News & Views

From mid-2011 to mid-2014, Bordeaux made the headlines for all the wrong reasons. Over the course of three years, prices for the First Growths plummeted by 40%; the broader Bordeaux market dropped 22%.

At the same time, prices for wines from the New World—particularly those from California—kept climbing higher. Over this period, the Rest of the World 50 index increased by 17%. Its Californian components, Dominus and Opus One, climbed 18% and 24% respectively. The top price performer of the 2015 Power 100—Scarecrow—also hails from the Golden State.

While Bordeaux was in the doldrums, it seemed that California could do no wrong, prompting Liv-ex to ask Opus One CEO David Pearson whether price rises were sustainable: “Yes—because it is based on the market’s and consumers’ true assessment of quality.”

But now that strength—and with it, more positive sentiment—has returned to the Bordeaux market, is California falling into the background? A cursory glance at the most recent Power 100 list might suggest so. Both Dominus and Screaming Eagle have fallen down the latest list—37 and 22 places respectively—as Bordeaux edges ahead. No American wines appeared among the top price performers. Opus One, however, represents an exception: it climbed 18 places into 33rd.

Last September, the estate’s 2013 vintage was released with great furor. Merchants reported a ‘scramble’ for the limited allocation released via the Place de Bordeaux. Although it fell short of three digits from Robert Parker, the critic noted that it is “certainly one of their great achievements over the last 37 years.”

Its index, too, has been rapidly on the up. It has outperformed the Rest of the World 50 and the broader Liv-ex 1000 indices over both one and five year periods. Over one year, the top performing of the last ten vintages are the scarce 2003 (+45%) and 2005 (+39%), and the high-scoring 2012 (+36%).

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So where is the value now? As the chart below shows, there is a 95% correlation between the age and price of Opus One vintages for the last eleven releases, suggesting efficient pricing around age. The acclaimed 2013 lies above the price trend line, perhaps owing to its critical acclaim. The three vintages that fall furthest below the fair value line—those that might offer relative value—are the 2003, 2007 and 2010. 

https://robert-parker-content-prod.s3.amazonaws.com/media/image/2017/03/27/cf0e9a781d6d4936aebdb677b2155d79_Price+v+age.PNG

The outlook for the estate’s forthcoming 2014 and 2015 vintages is positive, and Parker says that 2016 for California looks to be “equally impressive.” He adds: “Talk about an ‘embarrassment of riches…’” Providing the market is still able to absorb this series of ‘great’ wines, little is going to hold this Californian icon back.

Liv-ex operates the global marketplace for fine wine. It offers trading, data and settlement services to professional buyers and sellers of fine wine. Private collectors can view Liv-ex prices and value their portfolios using Cellar Watch and find regular market analysis on the blog.

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