Wine Investment Friday

This newsletter is designed to bridge the gap between trade and the investor. Each week we aim to help investors better understand the nuances of why some cases appreciate and some standstill. We will unpick the characteristics that construct financial potential to help your money work smarter.


This week we are analysing a case of:

George Noellat, Grands Echezeaux, 2016

Reviewing an example of Burgundys ultra high-end and exploring why ownership of such items is worth the leap of faith.


Beneath the Label: 

The heritage of this production outfit is second to none with land and blood ties to Leroy, Hudeot, Jayer and Truchot. Quite literally a whose who of Burgundian legends. It is no surprise then that this micro-production is of such high quality and is so spectacularly rare. 

Critic Score: 94 Points – Allen Meadows
For Meadows 94 constitutes a solid score, just shy of the top tier. 95+ would be needed to qualify.

Region Rating: Cote de Nuits – 97T 
After a severe frost, the following summer was simply perfect.

Drinking Window: 2035+
As is the case with wines from the top vintages, the balance of sugar and tannins enable this wine to age effortlessly.

Production Volume: sub 200 cases
Exact production figures are unknown as a frost reduced yields by as much as 40%.

Summary:
The key vector to hone in on here, apart from the obvious high quality of juice and vintage reputation, is the scarcity. With an annual production in the hundreds and mother nature playing her role capping production further, these cases really are gold dust. This is compounded when you consider there are currently less than 15 listings for the cases globally, an incredibly low for such a young wine. In years to come, this case becomes impossible to find handing all the power to seller. 


“A built to age finish…this powerful effort will age effortlessly into something sparkling.

Neil Martin


Money Matters:

Brand Power: 84/100, rank 40th in JF Tobias Brand Power Metric
Like many of the super low production Burgundy brands, this is an insiders wine. You will struggle to find anyone that has had the joy of drinking it and as such, it remains under the radar and a pursuit of the rich fanatic.

Liquidity: 35%
These wines appeal to a well-heeled extremely motivated niche. However, finding them and completing should be accounted for when thinking of a timeline. 

Inter-Trade Price Volatility: n/a
With only two trades in the wines lifetime and zero 12 bottle listings, Liv-Ex does not have the data toallow for conclusions to be drawn. However, this will follow the classic operating standards of all high-end low production Burgundy. The price transparency is low and price jumps (nearly always positive) are regular and sizeable.

Price History: 

Summary:
This is a wine where the financial vectors are not going to provide an inexperienced investor with confidence. Ultra rare Burgundy’s scarcely trade through public forums and exchanges and as such price transparency is always extremely low and identifying liquidity and volatility is more of art than science. That being said this localised portion of the wine market has a strong track record, with the Burgundy 150 index adding 57.1% over the last 5 years. Positive volatility is regular and welcome. 


Position for Profit: 
Play The Niche. 

Burgundy is the eventual resting point for all true connoisseurs of wine. The combination of extremely subtle and refined wines, the endless micro-niches of productions and the almost mythical scarcity means no one, bar perhaps Allen Meadows, can truly say they have experienced all of Burgundy. With this comes a simple fact, to attempt to explore the upper ends of Burgundy an individual requires extremely deep pockets. As such, capturing a case such as this is looking to take advantage of the obsession of the wealthy Burgophile. With case production in the 100’s, and with the majority of these going into collectors cellars to never see the light of day again. Ownership can genuinely see you own a significant portion of public supply. This is not a case to buy and to flip. This is something to buy and tuck away until you can corner the market and set the price, a very real possibility. 

The Author

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Jake Leighton