Wine Investment Friday's

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. 


Clos de la Roche, Dujac – 2015

This week we look at why opportunities to purchase top young Burgundies, such as this case of Dujac are just so few and far between. Why those on the exclusive allocation lists are so reluctant to ever let them go.


Beneath the Label

Dujac is as a historic name in Burgundy as any, but is a relative new face to the top tier of Burgundy investing. It has only been during the recent decade where prices for the Domaine have soared, thanks to elevated brand power and a run of simply superb wines. 

Critic Score: 96 Points – Burghound
Apart from the 1990, this is the highest ever scoring modern Clos de la Roche. A high watermark. 

Region Rating: Morey St. Denis – 98T
Widely regarded as the greatest modern vintage of Burgundy, the score is unrivalled. 

Drinking Window: 2035+
There is no danger of these wines exiting the window for decades. 

Production Volume: <1000 cases
Quality not quantity is the goal, so thanks to green harvesting and an organic approach production volumes are tiny. 

Summary:
This wine holds many of the classic fundamentals you should be looking for in top tier investment wine. A critic score and vintage reputation that registers as one of, if not the very best in modern history. These cornerstones of quality are further bolstered with an already scarce total supply. As a result, unless you are well connected you are unlikely to access these wines early in their cycle.


“a special year has produced an even more special wine”

Burghound


Money Matters

Brand Power: 88/100, rank 14th in JF Tobias Brand Power Metric
This is one of the estates knocking on the door of the same tier as those ethereal Burgundian estates like DRC, Leroy and Rousseau. Boosted globally rather unbelievably by a hip hop endorsement from none other than Jay-Z.

Liquidity: 60%
These cases in their youth have a more approachable price point than perhaps those of DRC and Leroy. As a result private trading is easy as those who missed out on allocations vie to capture a case for their portfolios. 

Inter-Trade Price Volatility: n/a
Liv-Ex is a particularly bad place to gauge the volatility of a case like this as public listings are so very infrequent. However, it is worth looking at the potential for positive volatility. 

Price History: 

Summary:
The financial traits of this wine show a number of typically Burgundian traits. Price visibility is low, thanks to high absolute scarcity and this combines with tremendous brand power around the world. Two typical big ticket traits, rare and desired. The slightly divergent trait is in liquidity. Owing to its youth and exemplarily quality this will trade along a reasonable timeline with high levels of liquidity. As such we can say this is a far less risky wine than perhaps some of the bigger name picks. 


Position for Profit

The crux of our proposition at JF Tobias is to find truly high quality cases of wine. Those that will endure and appreciate based on merit above all else. Those that are insulated to the changing tides of the economy due to the end user they appeal to. A consumer who is insulated and motivated to drink the best. This case is absolutely an example of this.
Fortuitously we can use the 2005 as a benchmark for projecting price. A vintage of near comparable quality and reputation. At present, a case of 3 bottles from 2005 would cost £3,661. A 72% higher price than the current cost of the 2015 case. It would therefore be reasonable to suggest at the very minimum the 2015 has the capacity to grow by 72% over the coming 10 years. With Dujac’s rising calibre this may well prove to be a pessimistic aim as time passes. Overall a possible steady and positive result from such a stable and risk averse asset class. 

The Author

Jake Leighton