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:

Domaine Jacques Prieur, Montrachet – 2017


To the Burgophile the name Montrachet imparts a number of things, an understanding of the likely taste profile and the colour of the wine, a recognition of the quality of the land this wine was grown on and finally an acceptance that this wine is likely to be just that little bit more expensive. This week we look at whether the additional cost is worth it. 


Beneath the Label: 

Access to the vines within the 18-acre appellation of Montrachet in itself is incredible. It really is hallowed ground, with only the oldest and most prestigious of estates holding writes to the fruit. The topography and microclimate of this area is simply perfect for Chardonnay, elevating its status even beyond the rest of the top cru. 

Critic Score: 94 Points – Allen Meadows
For a wine a 10th of the price of some of the “icon tier” this is an astounding score from the severe scoring Meadows.

Region Rating: Montrachet – 93R
White varietals enjoy different climatic environments to the reds so while the great vintages do tend to match up as all wine loves sun, it is the not so great red vintages where the whites may surprise you.  

Drinking Window: 2029+
White wines are typically known for their freshness and drunk young. However top-quality Chardonnay has the capacity to age wonderfully adding a whole other dimension to the varietal.

Production Volume:  < 100 cases
The exact case count is unclear but Prieur holds 0.6 of the 18 acres. While that may seem tiny, some estates will have merely rows. 

Summary:
Described as the best location in the world to grow white wine, the case you buy is almost certainly going to be utterly delicious. However, so too are the wines from Puligny, Chassagne and Chevalier so what is it that adds that little bit of extra cost. The answer is two-fold. Firstly after decades of wine production a trading a hierarchy of quality has been established and accepted. The differences are nuanced and only understood fully by locals and experts, but they are there even if us mortals cannot sense them. The second is simply demand and representation. The limited land is worked by the best estates in the world and only a great winemaker makes great wine. Thereby ensuring that all produce from Montrachet is superb thanks to the class of winemaker working the land. 


“Omnipresent Sun made walking the vines in Montrachet one the great experiences of my life”.


Money Matters:

Brand Power: 80/100, rank 56th in JF Tobias Brand Power Metric
Like many of the oldest estates in Burgundy, the Jacques Prieur estate has no need to chase globally brand recognition. They own some of the greatest plots in the world, making low volume high-quality wines. Those that are aware of what that means will forever be repeat customers and appreciate the lack of attention which serves to keep the prices in the realms of the normal. 

Liquidity: 50%
A case like this appeals to a smaller number of individuals despite being relatively well priced. It appears to lack the reverence that the big estates garner that drives feverish demand. 

Inter-Trade Price Volatility: n/a
These wines sell through direct allocations and typically remain in a collectors cellar. Priced to be drunk and lacking in price appreciation potential, they rarely trade in a public forum. 

Price History: 

Summary:
This section and graph show this wine sits more in the drinking and collecting camp as opposed to being an item that is going to appreciate significantly over the mid to long term. The brand is lacking in the market presence necessary to ratchet up price despite its absolute scarcity. If we look at similarly scored vintages of a few years older the price is almost identical showing very little upside potential. An interesting result, especially as other top quality Burgundy wines of this price point, have performed consistently well throughout the last few years. 


Position for Profit: 

While this particular case of wine has not proven to be investment-worthy, it has highlighted many of the reasons why the “Montrachet” tag is so desirable and valuable.  Fundamentally it is the quality of the land and the climatic conditions it enjoys which combine to be THE most perfect plot in the world for Chardonnay. Then it is the appellations very limited production capacity and the vying for rows that this creates amongst the very best wine producers, not just in France but the world. All of which culminates in scarce, ultra-high quality wines that have the capacity to age for decades, from estates whose brand reach is global and appeals to the top tiers of society. A pretty potent formula, keep your eyes peeled. 

The Author

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Jake Leighton