A Guide to Investing in Burgundy

Burgundy is arguably the world’s most mythologised wine region.

Loved for their heady perfume, seductive beauty and pure fruit flavours, the wines can seem contradictory in nature, offering power and delicacy in the same glass. The hallowed ground of the Côte d'Or is home to some of the most prized producers on the planet, including Domaine de la Romanée-Conti, Armand Rousseau and Domaine Leroy, which continue to smash world records for their escalating prices, as an expanding global audience of high net worth collectors seeks to snap up the most coveted vintages from the top names seemingly no matter the cost.

A brief history…

This magic kingdom in east-central France has nurtured vines since Roman times, with the first evidence of vineyards documented in 312AD. During Charlemagne’s reign in the 8th and 9th centuries, Burgundy had already carved out a reputation for the quality of its wines, while Cistercian monks moved things along by planting vineyards across the Côte de Nuits in the 11th century.

With over 100 different appellations, numerous individual vineyards and more than 3,000 producers making some 15 million cases of wine a year from 28,000ha of vines, Burgundy can be a complex region to wrap your head around, but at its core are the four ‘Vs’: village, vineyard, vigneron and vintage.

Terroir

Growing grapes in Burgundy has been elevated to an art form. Working with essentially just one red variety – Pinot Noir – and one white – Chardonnay – the region’s winemakers are respected around the world for their ability to reveal distinct differences in wines made from grapes grown mere metres apart.

Pinot and Chardonnay are the perfect conduits through which to reveal these subtle differences in soil and climate. The notoriously capricious Pinot displays darker fruit and spice flavours in Burgundy’s cooler areas, and more red fruits and floral characteristics in warmer areas. Chardonnay, meanwhile, adapts well to a range of climates, producing citrus and apple-scented expressions in the cool region of Chablis, and wines full of orchard fruits in the warmer Côte de Beaune.

Hot summers and harsh winters are the norm in Burgundy, where clay-limestone soils from the Jurassic era abound. Running the gamut from bathonian and bajocian to kimmeridgian and portlandian, each soil type has its own characteristics, and the endless variations possible between the type of underlying rock, the nature of the topsoil, drainage, slope and aspect to the sun account for the differing characteristics of Burgundy’s various vineyards.

Classification System

Established in 1935, there are four quality tiers within Burgundy’s classification system. At the base of the pyramid are the regional appellations, such as Hautes Côtes de Nuits and Mâcon, which account for over half of all wines produced in the region. Next come the 44 village appellations, such as Volnay and Puligny Montrachet, which represent around 37% of total production.

Taking things up a notch, next come the Premier Cru vineyards, such as Meursault Charmes Premier Cru and Gevrey Chambertin Clos St Jacques Premier Cru, which account for just 10% of the production in Burgundy. These vineyards are often located next to Grand Cru sites, and their quality differences can be small – such as a higher clay content in the soil, or more of a northerly aspect.

Sitting atop the quality pyramid are Burgundy’s 33 Grand Cru vineyard sites, which account for less than 2% of all wine produced in the region each year.

Regions

The Côte d’Or is split into two sections: the Côte de Nuits in the north, which is almost exclusively planted with Pinot Noir, and the Côte de Beaune in the south, where Chardonnay reigns supreme. The Côte de Nuits is the source of Burgundy’s greatest reds from villages such as Vosne-Romanée, Nuits-St-Georges, Chambolle-Musigny and Clos de Vougeot.

Producing silky, ethereal reds, Vosne-Romanée boasts Burgundy’s most lauded vineyards: Romanée-Conti, La Romanée, La Tâche, Richebourg and Romanée-Saint-Vivant and is home to some of its most iconic producers, including DRC, Leroy, Cathiard, Méo-Camuzet and Liger-Belair. The wines of Gevrey-Chambertin, meanwhile, are celebrated for their perfume and power. Further south, the Côte de Beaune is the source of Burgundy’s greatest whites and home to villages such as Corton-Charlemagne, Chassagne-Montrachet and Meursault.

The rarity factor

Land ownership in Burgundy is fragmented. It’s common for a family to own just one hectare, half a hectare or even a quarter of a hectare of vineyard land, while some preside over just a few rows of vines, meaning that sought after wines are often produced in extremely small quantities. Competition for allocations of the top blue chip names is becoming increasingly fierce among a growing group of high net worth collectors, and dwindling stocks inevitably put pressure on prices.

Hailing from the heart of the Côte d’Or – a 50km, east-facing ‘golden slope’ – where the balance of clay and limestone is optimal, Burgundy’s top vineyards are the source of the region’s most powerful, complex and ageworthy wines, which are among the most sought-after in the world. Collector interest remains razor focused on Grand Crus from big name producers with revered reputations, such as Domaine Leroy, DRC, Georges Roumier, Sylvain Cathiard and Armand Rousseau. While more approachable in their youth than young Bordeaux, these wines ideally need a decade in bottle to come into their own, but the best expressions from the top vintages will happily age for many decades more.

Mother Nature’s impact

Climate change is playing its part in driving up scarcity. In 2021 Burgundians had to battle with devastating spring frosts that led to yield losses across the region of around 40% on its 10-year average, with white production down by as much as 50-70%. In response, release prices increased by up to 50-60% from top producers including Drouhin and Leflaive. With erratic weather patterns continuing to put pressure on yields, collectors are competing for a smaller pool of highly coveted wines, meaning stable high pricing for both the reds and whites, particularly from standout vintages with good track records.

High critics’ scores for the 2019 and 2020 vintages are adding fuel to the fire, ramping up demand for the wines and pushing up prices in the process. This, in turn, is putting upward pressure on past Burgundy vintages as collectors look elsewhere for value.

Key producers

Domaine de la Romanée-Conti

The leading light of Burgundy, DRC is run by Aubert de Villaine, who is custodian of the domaine’s 25ha of Grand Cru vineyards, which include the 1.8ha monopole La Romanée Conti and La Tâche, along with significant holdings in Richebourg, Romanée-St-Vivant, Grands Échezeaux, Échezeaux and Le Montrachet. The appetite for DRC remains insatiable, with the wines from the fabled domaine typically comprising over 20% of Burgundy sales at Bordeaux Index.

Domaine Leroy

Producer of some of greatest reds on the Cote d`Or, Domaine Leroy is run by the indomitable Lalou Bize-Leroy, who also owns a quarter of DRC, where she was co-director until 1982. The Leroy empire comprises Maison Leroy in Auxey-Duresses, Domaine d’Auvenay and Domaine Leroy in Vosne-Romanée. Leroy practices biodynamic viticulture across her vineyards in Richebourg, Romanée St. Vivant, Clos de Vougeot, Clos de la Roche and Le Chambertin among others.

Domaine Armand Rousseau

One of the leading estates in Burgundy in terms of history, vineyard holdings and wine quality, Domaine Armand Rousseau in Gevrey-Chambertin boasts 15ha of vines, over half of which are Grand Cru. Run by Eric Rousseau and his daughter Cyrielle, the domaine is known for its finely structured reds of great elegance and ageworthiness.

Maison Louis Jadot

Maison Louis Jadot owns over 60ha of vineyards, including many Premier and Grand Cru sites, which are presided over by Jacques Lardière, one of Burgundy’s most respected winemakers known for his minimum intervention approach. Founded in 1859, the maison is currently run by Pierre-Henri Gagey.

Domaine Coche-Dury

Something of a cult wine, Jean-François Coche-Dury makes tiny amounts of characterful and intense long-aged wines that undergo extended elevage in barriques. His whites are among the most sought-after in all of Burgundy, while his reds are lauded for their perfume and power, which is balanced out by crisp acidity.

Notable vintages for investment

Burgundy’s blue chip have been in a league of their own in terms of their price performance over recent years. Top-performing vintages over the last 18 months include 1990, whose rich reds are going the distance; the perfumed and pleasingly approachable 2017 vintage; and 2018, which bears the hallmarks of a legendary vintage characterised by the driest growing season since 2003, which led to reds with bright cherry fruit and concentrated tannins.

Georges Roumier, Armand Rousseau and DRC have been among the best-performing Burgundy reds at Bordeaux Index over the past few years, while Domaine Raveneau, Coche Dury and Leflaive have led the pack on the white front. Outside of the coveted top tier, the likes of Domaine Drouhin, Domaine Jean Grivot and Henri Boillot are also consistent favourites. Other highly rated Burgundy vintages to look out for are 2005, which produced concentrated, terroir-driven reds built for long ageing, and 2010, which displays great delicacy and purity, though both lauded vintages have the high price tags to match.

While picking future stars is by no means straightforward, wines like DRC La Tache 2010 (up 200% in 5 years), Leroy Richebourg 2001 (up 350+% in 5 years) and Coche-Dury Meursault 2008 (up 400+ % in 5 years) shows the returns that are possible when demand spikes for small production wines.

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