
Wine collectors like to proclaim that "all roads lead to Burgundy," but they forget that in the early days of their hobby, the best red wines from the region were not always taken. In North America and Australia, the way into the wine world is heavy, alcoholic wines that taste like plum or blackberry. They carry the vanilla or mocha mark of oak barrels and should be drunk within a few years of bottling.
As you gain experience, you naturally start looking for lower octane French options, such as Cabernet Sauvignon from Bordeaux rather than North American Napa Valley; Rhône Syrah rather than Australia's Barossa Shiraz. But when you value complexity and finesse over power, your destiny takes you to Burgundy.
Encyclopedic knowledge of wine in Burgundy is most valued in the wine world. The French region is divided into hundreds of vineyards. In turn, a myriad of producers have specific lines within each vineyard, from which they all make unique wines. This leads to annual production of at most a few thousand bottles of wine.
In addition, red wine from Burgundy consists of the Pinot Noir grape, a grape with a maddening aging pattern. After a few years of storage, this grape tends to "shut down" and lose its flavor, and blooms after a few decades. But sometimes it never "wakes up" from sleep, which makes the challenge of this grape even greater.
The rise of Burgundy began with a decision in China
In the past, Burgundy's complexity and small production relegated it to a niche market. Bordeaux, which produces fewer different wines in larger batches, became popular in Asia and prices took off. But in 2012, when China's government banned lavish gifts the wine bubble burst and sales to Asia declined dramatically.

Thus, as the preference for Bordeaux has declined in Asia and the West, it has gained importance to dominate the red wine of Burgundy. However, the vast range of wines from this region, with rarities as scarce as 300 bottles per year, make price data difficult to find. Among the hundreds of beautiful reds from Burgundy, the global Liv-ex market, for example, includes only 11 in its regional price index. In other words, a combination of low production, vast variety, and little knowledge leads to steadily climbing prices for Burgundy wines.
In financial terms, the valuation of Burgundy reds for producers has grown rapidly over the past 20 years. Between 2003 and 2018, Burgundy reds returned an average of 497%, compared to 279% for the S&P 500 (American stock market) and 214% for Bordeaux reds and Champagne. Of course, these comparisons are always open to criticism, but what we want to show is the evolution of the financial return on investment in Burgundy red wines. The Burgundy index has also been less volatile than stocks, although this may be a defect of the methodology of its calculation.
It is hard to understand how Burgundy can maintain such an appreciation. Many people can afford a $300 bottle. But at $3,000, the market depends on the whims of the wealthy. Even if stock market prices tend to rise, it will be hard to beat the financial returns of red wine producers in Burgundy. As an example, luxury conglomerates Kering and LVMH, whose owners have bought Burgundy vineyards, have seen a 958% return on investment between 2003 and 2018, as opposed to a 2% return on dividends paid by the conglomerates in recent years. That said, we can conclude that the best way to make money in Burgundy is probably to make wine, not buy it.
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Great article. Congratulations