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. 


This week we look at the importance of brand power by reviewing Nicolas Potel’s:

Maison Roche de Bellene, Romanee Saint Vivant – 2016

Reviewing how a lack of brand power can impact liquidity and the lifetime price potential of a wine.


Beneath the Label

The Potel family is entrenched in the very fabric of Burgundy and as such his reputation amongst those in the know is of a magnificent winemaker. Maison Roche de Bellene is Nicolas’ label producing a myriad of wines, from village wines to bottles created from some of the best plots in Burgundy. 

Critic Score: N/A Points – Burghound
This vintage is unscored by critics from Maison Roche de Bellene.

Region Rating: Cote de Nuits – 97T
2016 is arguably the rival for 2009 in terms of climatic perfection. Even without a critic review, we can discern this will be a high-quality wine. 

Drinking Window: 2026+
Despite Pinot Noir’s far more delicate feel when consuming the variety is still capable of imparting the structure necessary for these wines to age for decades.

Production Volume: 49 cases
Even by Burgundian standards, this number of bottles is minuscule. They are objectively fantastically rare. 

Summary:
While the absence of a critic score is disappointing it is not unheard of in Burgundy, especially when you consider less than 300 bottles were created! Luckily we have a back catalogue of Nicolas Potel vintages to review and a vintage reputation that is the overwhelming vector when considering this wine. We can safely assume this wine is at least 94/95 points, while potentially holding a score far higher. 


“The wine is racked according to lunar and biodynamic cycles”

Maison Roche de Bellene


Money Matters

Brand Power: 67/100, rank 134th in JF Tobias Brand Power Metric
The wines from Maison Roche de Bellene are undoubetdly high quality, but their notoriety is extremely confined. It is confined to those that have been fortunate enough to consume the wine at one of the few high-end venues it is stocked. Or equally have had the wine imposed on them by a friend, collector or merchant. 

Liquidity: 20%
Finding motivated buyers for a £500 a bottle wine with such a niche exposure to the marketplace can be tricky. 

Inter-Trade Price Volatility: n/a
With such a finite supply it is no wonder these wines do not trade through the exchange. 

Price History: 

Summary:
When dealing with expensive, low-volume Burgundies the brand power is the protective vector that the investor relies upon. Even at exorbitant prices, the demand for icon-tier wines outstrips supply and ensures at the very least an exit. Without this global desire, an investment into this tier of wines can create exposure to high levels of volatility in absence of the fundamental quality needed to protect the downside.  


Position for Profit

Brand power can sometimes be viewed as a secondary vector when it comes to assessing a wine’s investment potential. However, the implications of “brand” are significant and at the very heart of why wine appreciates. Wine is a Veblen good with a unique constricting supply and demand imbalance. Without the brand connecting wine with the feelings of prestige, power, success its capacity to appreciate is all but removed. The real-world reality is that without brand power an investor is relying on a small pool of highly informed collectors. We can discern their level of sophistication from the sheer rarity of these wines and what it entails to be exposed to them. Market participants of this level of sophistication are aware that without the driving forces of speculation or UHNW individuals wishing to consume the wines acting on these wines there is no need to pay “over the odds”. As a result, you have a thin market lacking in price progression that creates financial ceilings. Without an expansion by the Maison or Domaine itself into my dynamic brand promoting activities this will not change and for some, that is by design. That is why brand power may feel like a disposable metric, but at the very niche or expensive end of the spectrum, it couldn’t be more important. This case is a great display of this concept at work. It will undoubtedly be one of the most wonderful bottles to consume, this is not in question. However, investing in this would be a misstep.

The Author

Jake Leighton