Investment Tips - Burgundy - 10. November 2022

Investment in 2020 Rossignol-Trapet Chambertin Grand Cru with attractive price/quality ratio

In economic recession, consumers are looking for "affordable luxury" - and that’s what Rossignol-Trapet Chambertin can offer. And Burgundy is outperforming the stock market...

Luxury, Lipstick And Fine Wine

Burgundy seems to be a good investment both in and out of inflation, and this investment tip is all about investing in Burgundy. Even in the Grand Cru icon, Chambertin, which ranks among the world's best vineyards. 2020 Rossignol-Trapet Chambertin offers the investor a cheap but attractive opportunity to add Chambertin to the portfolio. 

According to Liv-ex, the Liv-ex Fine Wine 50 rose by 1.3 % in Q3, keeping fine wine stable in Q3. Fine wine thus shows solidity and stability against both commodities and global stocks, which fell into a bear market during the same period. So even though rising inflation and fears of recession lurk, demand for fine wine remains. The Burgundy 150 index has also been the best-performing sub-index YTD with a growth of 27 %, and in fact, the best-performing wines in the Liv-ex 1000 index are also from Burgundy.

The essence of this investment tip is, of course, world-class wine. But it is also a tale of Burgundy investment from a historical perspective, lipstick index, and affordable luxury. Read much more potential below.

An Introduction: Rossignol, Trapet And Chambertin In Formidable Union

Rossignol-trapet is a formidable union of two families whose DNA consists mainly of the art of winemaking. Since the 16th century, Rossignol has been making wine in Volnay, while the Trapet family has been making wine in Gevrey-Chambertin since the 18th century. Jacques Rossignol and Mado Trapet married and had their sons David and Nicholas, and in 1990 Mado inherited half of the Trapet family's wine holdings in Gevrey-Chambertin. The remaining half went to her nephew, Jean-Louis Trapet, which is also now a widely recognized domain in Burgundy.

In 1990, Domaine Rossignol-Trapet thus became a reality with David and Nicholas at the helm. The domain owns unique wine pearls in Burgundy, of which their 1.6 hectares on the legendary Chambertin vineyard represent their very best.

And Chambertin will always be recommended as a long-term investment, regardless of producer, because it has luxury status. Below, 2020 Rossignol-Trapet Chambertin is woven into the story of Burgundy investment, but we start somewhere else with Jeremy Siegel.

Siegel's Constant And Burgundy Investment

If you are even a little bit interested in investing, you have probably seen the light: investors who take on a little (calculated) risk will be rewarded financially over time, unlike those who keep their money in the mattress and thus lose purchasing power to inflation over time.

Probably the most famous advocate of the above is the American economics professor Jeremy Siegel, who, in his 1994 book "Stocks for the long run" demonstrated that precisely those investors who have taken on risk over a long period had made significantly greater gains than those who took less or no risk.

For example, Siegel calculated that if you had invested a dollar in gold in 1802, by 1992, it had become $ 1.42. Had it been put into long-term government bonds, the buying power would have been 52 times greater, while it would have increased by 86,100 times if the dollar had been put into equities and the gains continuously reinvested.

The result of this study, however, has been dubbed "Sigel's constant" in the financial world and suggests that the return on equities over the long term is a constant of 6.5-7 % per year.

Unfortunately, valid wine data is only available back to January 2004. But looking at this until 1 October 2022 (i.e., almost 19 years), the average annual return on Burgundy* is 12.5%.

Is this your sign to turn your back on the stock market? Not at all. But it is quite thoughtful.

*Liv-ex Burgundy 150 index

Lipstick Index And Burgundy Grand Cru

The above underlines that in the long term, prices of good Burgundy wine rise quite considerably, regardless of high and low economic cycles, which is why we continue to recommend investing in the category when suitable investment opportunities present themselves.

Right now, inflation is rising, which means that fewer people are demanding the very most expensive but are instead looking for alternatives - you may even know this from your own consumption. This phenomenon is described in the financial industry as the "Lipstick Index." Leonard Lauder, the heir to the Estee Lauder cosmetics company, noted that sales of his products increased during periods of recession when consumption otherwise tends to fall in many respects. This was a consequence of consumers seeking so-called affordable luxury. Instead of the highest luxury, such as designer bags, consumers sought affordable luxury, which in this case was expensive make-up.

The mechanism can be transferred to the luxury wine market. There will always be those who demand the ultimate, while more will seek the next best luxury in a recession. Here you have the opportunity to invest in wine from the Grand Cru vineyard Chambertin, which, together with Musigny and Romanée-Conti, is considered the absolute best vineyards in Burgundy. Chambertin is thus an excellent luxury, and there will continue to be demand for both Leroy Chambertin, Rousseau Chambertin, and Dujac Chambertin. At the same time, cheaper alternatives such as Rossignol-Trapet Chambertin may become extra popular choices.

2020 Rossignol-Trapet Chambertin 2020 Rossignol-Trapet Chambertin

Rossignol-Trapet Chambertin: Affordable Luxury

Some of the best producers practice wine magic at Chambertin, of which Madame Leroy must be considered the absolute best. Next, come the producers in the table below, and as the scores indicate, there is not much difference between them quality-wise - granted, two points at this end of the scale is a lot, but so is the price difference. The 2020 Rossignol-Trapet Chambertin, available for investment in this investment tip, has so far only received barrel scores from Burghound and Vinous of 92-95 and 95-97 points, respectively. As it stands right now, with a score of 94.8 points across BH and VI, it is only outperformed by the 2010 Rossignol-Trapet Chambertin, which has only been scored by Burghound (95p).

The most striking thing here is that Rossignol-Trapet is significantly cheaper than its neighbors, though the quality is also exceptional. Therefore, the Rossignol-Trapet is a severe bid for the comfortable luxury consumers are looking for in a recession. And within only in the region of 7,800 bottles produced in an average vintage, as usual in a Burgundy narrative, there will not be enough for everyone. Add to that the yield for 2020 Rossignol-Trapet was 15 percent less than usual.

2020 ChambertinAVG Score*Price
Rousseau96,8€ 5.000
Dujac95,5€ 4200**
Denis Mortet96,2€ 1500**
Jean-Louis Trapet95,7€ 600
Rossignol-Trapet94,8€ 275
*Score across scores from Burghound, Wine Advocate and Vinous **Neither the 2020 Dujac Chambertin nor the 2020 Denis Mortet Chambertin have yet been released, so these are qualified estimates on our price expectations.

Rarewine Invest's Opinion

At RareWine Invest, we, of course, keep a close eye on the world situation. Still, regardless of this, it is a fact that wine, and Burgundy, in particular, has been an attractive investment, regardless of the economic climate, which is why it is, of course, interesting to have an investment tip like this placed in a broader perspective.

It is, of course, significant that the average annual return on Burgundy has been 12.5% since 2004. And interestingly, consumers seek affordable luxury in recessions, which sends the consumer arrow to a wine like the 2020 Rossignol-Trapet Chambertin.

In reality, however, it is an insult to describe 2020 Rossignol-Trapet Chambertin as something that is second best, as secondary ranking in the hierarchy is only due to names like Leroy and Rousseau. To this end, it is also essential to remember that Rossignol-Trapets 2020 Chambertin is among the best the domain has released. At the same time, however, the price does not reflect that it is right on the tail of its mighty Chambertin neighbors in terms of points.

This is, therefore, a unique entry into Chambertin: one of the world's best vineyards.

Invest in 2020 Rossignol-Trapet Chambertin

Contact us via the contact form at the bottom of the page if you want to know more about your investment options or order the wines directly through the form.

2020Rossignol-Trapet Chambertin750OC6€ 275
*All prices are in EUR ex. customs duty, tax, and VAT for delivery to a bonded warehouse. Prices including customs duty, tax and VAT can be sent on request. The wines are only sold in whole cases unless otherwise specified and the price is per bottle. Minimum order size € 2,500. Assumes a total minimum investment of € 10,000. Prices may have changed since release of this article. Reservations are made for errors.

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