Tier 2 and Up & Coming producers: Searching for the rising stars
Low risk with attractive upside – a diverse approach to Cult Wine Investment’s Tier 2 and Up & Coming Burgundy categories can increase the potential for long-term gains. Here, we highlight the opportunities within these Burgundy producer categories, including a specific look at Domaine Coquard Loison Fleurot, Domaine Duroché, Domaine Henri Gouges, and Domaine Pierre Girardin.
We’ve recently highlighted how Iconic Burgundy wines can form the foundation of a long-term Burgundy allocation due to their timeless appeal and scarcity. In the Tier 1 category, we’ve identified excellent relative value opportunities that could deliver healthy growth in 2022 and beyond.
Now we turn to our Tier 2 and Up & Coming categories, which include select groups of excellent wines from producers who may not have the same global following as the big names. We believe wines in these categories offer investment-minded Burgundy buyers limited downside with the potential for some names to achieve strong returns over the long term.
Rewards from rising stars
The upside comes from the potential for some producers within the group to gain a wider international following over time. We’ve carefully selected the producers and winemakers that we think are among the best and most exciting in Burgundy, rivalling the quality of many of the top domaines despite their lower profiles or shorter track records.
One of the main points driving the higher prices for the top Burgundy producers is their widespread recognition among global fine wine lovers. But recognition and brand prestige are evolving concepts; producers that we categorise as Tier 2 and Up & Coming now could climb the ladder as their global followings grow. This would generate greater demand and lead to substantial price growth over time.
Domaine Sylvain Cathiard provides an example of a producer that has enjoyed a noticeable jump in its global following in recent years. Had Cult Wine Investment been categorising Burgundy producers a decade ago (we established the categories in 2018), they likely would have received an Up & Coming label, but the global market now views Cathiard wines as among the most prestigious in the Cote d’Or, hence our Iconic ranking.
Unsurprisingly, Sylvain Cathiard prices have shot up in accordance with its climb to Iconic status and now compare to prices for many of the top names in Burgundy. Given that they started from a lower base, Cathiard’s price returns are massive. Some of its best wines have easily outpaced the Burgundy market including many of the top producers in the region (see below) over the long term.
Source: Pricing data from Liv-ex as of 30 Jan 2022. Analysis by Cult Wine Investment. Past performance is not indicative of future success.
Limited downside
This is not to say all or even a majority of the producers within the Tier 2 and Up & Coming categories today will one day join the top echelons of Burgundy. But they don’t need to for this category to form a great investment. As these wines offer attractive value for money, they come with a lower level of risk compared to the more expensive top tiers, in our view. Simply put, the lower prices should limit their downside.
Therefore, buyers can build a diverse holding of Tier 2 and Up & Coming wines with the potential for a few names to step up and deliver outsized returns whilst others may track the market. Since the risk is low that any wines in these groups will experience meaningful underperformance, a diverse allocation should reap healthy gains over the long term if even just a couple wines realise big gains.
Our full list of targeted producers in the Tier 2 and Up & Coming categories are below but here we delve deeper into a few highlights.
1 Domaine Coquard Loison Fleurot
Often referred to by its initials CLF, Coquard Loison Fleurot owns six grand cru sites across the Cote de Nuits with an impressive collection of 50+ year-old vines. However, prior to 2010 these were all locked into historic contracts in which the grapes were mostly sold to negociants. Consequently, the magic of CLF wines has yet to be fully discovered.
The potential for a rise into the higher echelons of Burgundy also stems from the craft of winemaker Thomas Colladot, who shares a close friendship and common approach to winemaking with Sébastien Cathiard of Domaine Sylvain Cathiard. With most of CLF’s amazing wines produced in small quantities, the ingredients are there for considerable price growth in the years to come.
- Clos de La Roche Grand Cru
- Average all-vintage GBP 5-year price growth – 59% (Wine Searcher)
- 2020 score – 96-98 points (Neal Martin, Vinous)
- Grands Echézeaux Grand Cru
- Average all-vintage GBP 5-year price growth 134% (Wine Searcher)
- 2020 score – 96-98 points (Neal Martin, Vinous)
- Echézeaux Grand Cru
- Average all-vintage GBP 5-year price growth 109% (Wine Searcher)
- 2020 score – 94-96 points (Neal Martin, Vinous)
- Clos de Vougeot Grand Cru
- Average all-vintage GBP 5-year price growth 52% (Wine Searcher)
- 2020 score – 94-96 points (Neal Martin, Vinous)
2 Domaine Duroché
Pierre Duroché is the fifth generation of the family to head up this domaine that has some of the finest terroirs in Gevrey-Chambertin. Pierre farms organically and brings a wealth of knowledge developed by his family over the years. The resulting wines (four grand crus, four premier crus and a range of excellent village wines) are quickly gaining many plaudits, leading to big jumps in secondary market prices in recent years. Still, prices remain well below those of Iconic and Tier 1 producers.
The domaine is bottling a special edition “2020 Hommage à Philippe” made from a small parcel off 100-year old vines planted back when Pierre’s grandfather ran Duroché.
- Chambertin-Clos de Bèze Grand Cru Hommage à Philippe
- One-off special bottling of 100-year old vines
- 2020 score – 98-100 points (William Kelley, Wine Advocate)
- Chambertin Clos de Bèze Grand Cru
- Average all-vintage GBP 5-year price growth – 225% (Wine Searcher)
- 2020 score – 97 points (William Kelley, Wine Advocate)
- Latricières-Chambertin Grand Cru
- Average all-vintage GBP 5-year price growth – 246% (Wine Searcher)
- 2020 score – 97 points (William Kelley, Wine Advocate)
3 Domaine Henri Gouges
Regularly churning out some of the finest wines in Nuits St George, Domaine Henri Gouges represents excellent value for money. The Gouges family has honed their craft for over a century by focussing on intense, structured, low volume wines that promise long lifespans – all the hallmarks of a good investment wine.
The domaine’s line-up consists of premier crus and villages wines as Henri, as mayor of Nuits St Georges in the early 20th century, reportedly advocated against any grand cru designations despite holdings some of the most prized sites in the appellation.
Today, as then, the wines’ quality speaks for itself under the current leadership of Henri’s great-grandsons Gregory and Antoine. Although the wines may not see the skyrocketing price growth found elsewhere, their attractive entry points and long track records of quality mean they form a low-risk component of an allocation.
- Nuits Saint-Georges Les Saint-Georges Premier Cru
- Average all-vintage GBP 5-year price growth – 25% (Wine Searcher)
- 2020 score – 93-95 points (Neal Martin, Vinous)
- Nuits Saint-Georges Les Chaignots Premier Cru
- Average all-vintage GBP 5-year price growth – 18% (Wine Searcher)
- 2020 score – 91-93 points (Neal Martin, Vinous)
- Nuits Saint-Georges Les Chênes Carteaux Premier Cru
- Average all-vintage GBP 5-year price growth – 16% (Wine Searcher)
- 2020 score – 91-93 points (Neal Martin, Vinous)
- Nuits Saint-Georges Les Pruliers Premier Cru
- Average all-vintage GBP 5-year price growth – 25% (Wine Searcher)
- 2020 score – 91-93 points (Neal Martin, Vinous)
4 Domaine Pierre Girardin
Still in his 20s, Pierre-Vincent Girardin is very much a star still on the rise. As the The 13th generation in a Burgundian winemaking family, his lineage and name recognition at such an early age should only boost his profile. Pierre-Vincent’s father, Vincent, was one of the most famous names in the Cote de Beaune’s Meursault region until he sold his domaine in 2011. However, he kept what he regarded as the best 4.5 hectares and passed these on to his son to set up Domaine Pierre Girardin.
Pierre-Vincent made some impressive wines straight away with his first vintage in 2017 and has since supplemented the domaine vineyards with long-term contracts with what he regards as some of the top and most interesting growers in the region.
While quality has already been established, the wines’ short history means there is less of a performance track record. However, the following are particular highlights, in our view.
- Corton Charlemagne Grand Cru
- Montrachet Grand Cru
- Pommard Les Grands Épenots Premier Cru
- Meursault Le Limozin (entry level but superb)
Full list of Cult Wine Investment’s Tier 2 producers:
Arlaud
Arlot
Bouchard Pere et Fils
Bruno Clair
Domaine de Montille
Drouhin Laroze
Gros frere et Soeur
Joseph Roty
Michel Lafarge
Mongeard Mugneret
Paul Pernot
Philippe Colin
Pierre Damoy
Pousse d'Or
Rossignol Trapet
Simon Bize
Taupenot Merme
Thibault Liger Belair
Comte Armand
Denis Bachelet
Henri Gouges
Jacques Prieur
Vincent (PVG) Girardin
Marc Soyard
Ballot Millot
Philippe Pacalet
Louis Jadot
Comtes Lafon
Full list of Cult Wine Investment’s Up & Coming producers:
Antoine Jobard
Arnoux Lachaux
Benjamin Leroux
Charles Van Canneyt
Coquart Loison Fleurot
Berthaut-Gerbet
Duroche
Francois Bertheau
Francois Carillon
Georges Noellat
Heitz Lochardet
Henri Boillot
Jean Marc Millot
Jean Paul & Stephane Magnien
Jean Tardy
Launay Horiot
Marc Colin
Mark Haisma
Pierre Morey
Tawse
Tortochot
Vincent Dancer
Hubert Lamy
Yvon Clerget
Confuron Contetidot
Bernard Moreau
Alain Chavy
* Past performance is not indicative of future success; the performance was calculated in GBP and will vary in other currencies. Any investment involves risk of partial or full loss of capital. The Cult Wine Investment Performance is a hypothetical tool. The results depicted here are not based on actual trading and do not account for the annual management fees that may be charged to a Cult Wines customer which ranges from 2.95% to 2.25% depending on the size of the portfolio, and there is no guarantee of similar performance with an investor’s particular portfolio.
