Since the days of Cain and Abel, sibling rivalries have dotted history in many shapes and forms. William and Harry – famously separated after Megxit. The Jacksons all hated each other.
Liam and Noel, not only took each other to court but broke up one of the most popular, not to mention successful, bands Britain has ever known. Even loving sisters Venus and Serena Williams enjoy a friendly sibling rivalry on (and probably off) the court.
Burgundy and Bordeaux are a bit the same. Two great French wines, each very, very successful. And yet, while Bordeaux is the crowd puller – the William, Serena or Noel if you like, it is perhaps Burgundy that gives a better bottle, in investment terms. Let’s not forget the world’s eighth most expensive wine, a 1945 Romanée Conti, sold for $558,000 at Sotheby’s in October 2018. That’s more than a Ferrari 812 GTS if you want to compare!
What do Burgundy producers really think of the increased prices?
The fact that the little region in northeast France produces more complex and expensive wines than its big brother Bordeaux is not new news. However, the fact that the cost of these wines is ballooning is. As to why, well… That is a worrying trend that is beginning to worry investors and enthusiasts alike. The reason is down to a series of events that include the pandemic (naturally), global supply chain blockages post-pandemic, and climate-change-induced weather disruptions that resulted in severe frost damage for 2021.
Additionally, production is expensive, volume is low, and demand is high. If you think that Chablis has only had one complete harvest in the last four years (in 2018), then you’ll understand why prices are going through the roof.
Unsurprisingly, Burgundian winemakers are feeling the pinch. But, in the effort to maintain a fair market rate, they have tried to keep their prices as stable as possible. Despite this, prices are rising. Last year Wine Lister noted in its 2020 Burgundy Study that more Burgundy wines than ever before cost over £3,000.
Regrettably, an increase cannot be avoided: “The prices are up because production is expensive,” explains Cécile Mathiad, head of PR at the Bureau Interprofessionnel des Vins de Bourgogne (BIVB). “Volume is low and demand is high: we are losing crops every year. The cost of materials is going up, too.”
That’s not to say that producers aren’t worried about the rising cost: “I’m concerned about how the average French person can’t buy a bottle Gevrey-Chambertin,” says Vincent Valet of Maison Pierre Bourée et Fils. “Wine from Bourgogne is not meant to be a speculative tool. It is meant to be shared. Wine is an emotion, not part of a cheque or a one-hundred-dollar bill. We are happy to share our wines with as many people as possible, but, please – let’s be civilised about the prices.”
Burgundy’s performance in the markets
Learn more about Burgundy’s wine with our Burgundy wine guide
And yet, despite these rising costs and lower availability, Burgundy remains top of the investor boards, building on an average 31% growth in 2021. This is a trend that does not look like it’s ready to slow down. According to Liv-ex, Burgundy led wine investments in Q1 2022, outperforming equities by a long shot.
Investors are optimising the average 2.5% monthly growth (note that March 2022 saw this figure reach 4%). Compare this to the FTSE 100’s 1.6% and gold’s 2% rise, and you’d be a fool to not even consider adding a big Burgundy to your portfolio. Additional data showed that nine of the top ten price performers in Q1 2022 were Burgundy wines, so the only question that needs to be asked is, which wines should you be looking to invest in?
Judging by the region’s share of trade by value on the secondary market, which saw a growth of 36.8% year on year in 2021, investors have more choice than ever in a much more resilient and diversified market in Burgundy’s wines.
Should I invest in Burgundy wine?
Naturally, our answer to this is a big, bold yes. With such beauties as Domaine de la Romanée Conti up by a staggering 23.9% in 2021 and Domaine Leroy by a very respectable 9.6%, then the best advice we can give is not if, but when.
The data speaks for itself: The top three Burgundy growers’ wines traded on Liv-ex in 2021 (by value) were Domaine Armand Rousseau (8%), Domaine Ponsot (6.3%) and Maison Leroy (5.1%). Add Domaine de la Romanée Conti to the above trinity and you’re golden.
The common denominator between the great DRC and Leroy brands is of course, Burgundy’s leading lady, Madame Lalou Bize-Leroy. Lalou is wine royalty; her great-grandfather, François Leroy, founded his own trading house, Maison Leroy, in 1868. François’ grandson, Henri, was Lalou’s father, and she has been at the forefront of winemaking in Burgundy since 1955.
A co-owner (25%) and former director of Domaine de la Romanée Conti, Lalou founded Domaine Leroy in Vosne Romanée in 1988 with the purchase and renaming of Domaine Charles Nöellat. With vineyards in Richebourg, Romanée St Vivant, Clos de Vougeot and other communes, Madame Bize-Leroy has established, from 23 hectares of vines, a dynasty of great wines now recognised around the world as some of the most highly prized of the region.
But how does Lalou’s Midas touch translate for investors?
In terms of price performance, Domaine Leroy wines have seen outstanding growth. For example, Domaine Leroy Nuits St Georges 2001 has seen 2,010% growth since release in 2006 and a whopping 1,845% in the last five years on Liv-ex. Perhaps more typically, Leroy wines show average two-year growth in excess of 50%, with some delivering considerably higher returns. These are gains that compare well with most equities and have the added benefit of exemption from Capital Gains Tax, subject to personal circumstances.
What’s more, in Q1 2022, top, performing Burgundies include Domaine Leflaive Batard-Montrachet 2012, which has risen by76.3%, Domaine Bonneau du Martray and Corton Charlemagne 2014, both up 56.2% and Domaine de la Romanée Conti, Grands Echezaux 2008 increasing by 52.1%.
These figures make Burgundy the leading wine investment region for price performance on the secondary market. Despite the rising prices, Burgundy’s wine has become more accessible to investors, with more labels traded on the secondary market at lower entry points. As if that wasn’t enough to convince you, strong growth delivers desirable year-on-year returns to investors.
How to find the best white Burgundy wine prices?
But what about white Burgundy in all this?
The region is, of course famous for its beautiful Chardonnays and, notably, its Chablis. “Too much Chablis can make you whablis”, said the famous poet American poet Ogden Nash, and if you get the right bottle, we think it will make your investment portfolio weak at the knees!
Like the red, prices for the white wines are rising. However, the steeper price may be worth it. Modern white Burgundy is known for its supple intensity and finesse, and is the envy of winemakers everywhere. But it is in Burgundy that you get the best expression of what the glorious Chardonnay is capable of.
The wines are, for the most part, dry. You can also expect beautiful rounded, characterful wines which respond magnificently to the influence of oak in the barrel. Think of a full spectrum of tastes from green to yellow fruit (lime to lemon to apple and peach).
While the entry price of Burgundy’s white wine is increasing, so is the quality. Store it correctly, and your wine will go from zero to hero in a decade. We suggest selling before peak maturity in order to get the most bang for your buck. However, if you are a drinker of white Burgundy, note that some vintages (2015, 2014, 2013, 2010) show excellent ageing potential. If you enjoy a well-aged white Burgundy with your evening meal, then don’t uncork these wines too early.
Best Burgundy wines to buy right now
2013 Armand Rousseau, Clos de la Roche
A beautiful, bold Pinot Noir from the titan of Burgundy. Rousseau aged in both new and used oak, so expect a crispiness that comes with the concentration of fruit. Rousseau surpassed all expectations with the 2013 Clos de la Roche Grand Cru with Wine Advocate awarding it 93-95/100, Antonio Galloni of Vinous 90/100 and aggregate scores of 92/100. Long drinking window from 2024 to 2038.
2013 Armand Rousseau, Gevrey-Chambertin
Clos Saint-Jacques is perhaps Gevrey-Chambertin’s most prestigious, definitely most sought-after, Premier Cru. It is widely considered to be of Grand Cru quality. The boy done good with this vintage; Rousseau’s fragrant, full-bodied Pinot Noir is perhaps Gevrey’s finest (and one of the most expensive). A good score of 93/100 on aggregate (95/100 by the ever gallant Antonio Galloni), expect superb ageing when correctly stored. Drinking window from 2024 to 2038.
2010 Dujac, Clos de la Roche
Cotes de Nuits comes out of the shade with this beauty from Claude Dugat. Grown in soil nicknamed “the Champs Elysee of Bourgogne”, Dugat stuns us with the sheer quality of this vintage. Scoring a stunning 94/100 on aggregate scoring (96/100 from Vinous), this full-bodied, dry Pinot Noir is one of Dugat’s best. It “wafts from the glass with sweet scents of tobacco, crushed flowers and spices”. A good short-mid-term investment bottle, as the drinking window is between 2020-2035.
On a roll? Find out why you should invest in wine during inflation.