Investment Tips - Burgundy - 30. March 2023

Bourgogne Grand Cru - 2020 Frederic Esmonin Ruchottes-Chambertin Seems Too Cheap

Demand for Burgundy increases. The supply is reduced accordingly. This is why it is unheard of that you can still get Grand Cru for €110 - but you can here.

€ 110 for Burgundy Grand Cru is a rarity. But that is what this 2020 Frederic Esmonin Ruchottes-Chambertin costs, and it is doubtful that you can even get Grand Cru that costs less. At the same time, demand for Burgundy is rising. And the supply is gradually being reduced. Moreover, the quality here matches that of its neighbors, whose Ruchottes-Chambertin costs significantly more...

Doimaine Frederic Esmonin is still relatively unknown in the global wine world - but certainly not in Burgundy, where it is considered one of the most promising producers. Dive into the potential here.

Domaine Frederic Esmonin: A Promising Burgundy Gem

For generations, Domaine Frederic Esmonin has cultivated vineyards in Gevrey-Chambertin. And for generations, they have sold their fruit from 6.45 hectares of parcels to domains such as Drouhin, Jadot, and Leroy - and in fact, some of Leroy's most famous wines from the 1950s are said to be made from Domaine Frederic Esmonin grapes. 

It was only in 1988 that they began marketing their own wines, and they have the advantage of having access to some fantastic Grand Cru parcels such as Ruchottes-Chambertin, Mazis-Chambertin, Chambertin Clos de Beze, Bonnes-Mares and Chambertin.

Today, the domain is run by Frederic, his father André and his mother Michele, and they are considered one of the most promising producers in Burgundy. They practice lutte raisonnée, which means that no chemicals or additives are used in production. This practice is rooted in an extreme respect for the environment and a philosophy that the best wines require the best grapes. This is why Domaine Frederic Esmonin has spent decades optimizing its vineyards. But if the grapes are good enough for Leroy, the quality seems to have long since reached an excellent level.

The wine available in this investment tip comes from the 3.3 hectare Grand Cru Ruchottes-Chambertin, the second smallest Grand Cru in Gevrey-Chambertin. Here, Domaine Frederic Esmonin has 0.5 hectares planted with vines that are more than 50 years old. From here they are allowed to produce a maximum of just under 2,500 bottles.

There Is No Such Thing As Cheap Grand Cru Burgundy, But ....

Burghound is the only one who has continuously tasted through almost every vintage of Ruchottes-Chambertin from Domaine Frederic Esmonin, so it only makes sense to include his assessment in this investment tip. He gives 2020 Frederic Esmonin 93 points, which is the highest he has ever awarded the house's Ruchottes-Chambertin.

In addition to Frederic Esmonin, Armand Rousseau and Mugneret Gibourg also reside at Ruchottes-Chambertin, and they are considered to be the top producers here. Burghound awards their 2020 Ruchottes-Chambertin 93-96 points and 90 points respectively.

The fact is that to get your hands on a 2020 Armand Rousseau Ruchottes-Chambertin, you have to spend a minimum of € 1400. And if you want a 2020 Georges Mugneret Gibourg, the price is even higher. 2020 Frederic Esmonin costs only € 110. And while there are obviously several factors that go into valuing wine, it seems unheard of that wines from the same vineyard in the same point bracket should vary so much in price - and Georges Mugneret Gibourg is even lower rated than Frederic Esmonin.

So, no - there is no such thing as a cheap grand cru, but this seems far too cheap.

Overnight Fame - We Have Seen It Before

Today we would not make direct a comparison between Domaine Arnoux-Lachaux and Domaine Frederic Esmonin. The prices of Domaine Arnoux-Lachaux's wines across the entire product portfolio have exploded and in several cases increased tenfold in recent years. Domaine Arnoux-Lachaux, like Frederic Esmonin, was recognized in Burgundy for making world-class wines - the global wine world just had not yet discovered it.

Suddenly, word began to spread that at Domaine Arnoux-Lachaux you could get world-class wine at unprecedentedly low prices. And over a very short period of time, global awareness of Arnoux-Lachuax grew like wildfire, and over the coming years, prices skyrocketed.

One example is Domaine Arnoux Lachaux's 2017 Clos Vougeot Grand Cru, which has also been awarded 93 points by Burghound. Back in early 2021, you could buy this for around €200. Today, it costs in the region of €1000.

Today, we would not make a direct comparison between Domaine Arnoux Lachaux and Domaine Frederic Esmonin - but just two years ago we would.

Massive Demand And Shortage Of Burgundy

Producers in Burgundy are increasingly opting for quality over quantity, and this is reflected in overall production, which is steadily decreasing. At the same time, according to Liv-ex, demand for Burgundy has only increased.

Liv-ex reports that the total share of Burgundy wine (by value) in 2010 was 1%. by 2022 it was 26.2%. In comparison, the share of Bordeaux was 34.5% and Champagne 13.7% in 2022. It is hardly realistic for the same scenario to play out again in the next 10 years, but the status quo and the reduction in supply offers an attractive stage for the wine investor.

As a result of the above, the prices of Burgundy wine have increased significantly in recent years, which is why it also seems unheard of that a 2020 Grand Cru with great points can cost a fraction of what its neighbors cost.

And here is another fact worth noting. Because during the year, Burgundy producers will release their 2021 vintage, and the headline for this one is very much "first come, first served", because rarity is an absolute given. With release prices expected to be 25% above normal, many consumers are expected to seek quality in earlier vintages where the price is still affordable.

Read much more about the 2021 vintage in Burgundy: 2021 Burgundy - Rarity Is A Given

RareWine Invest's Opinion

This is an investment in Burgundy Grand Cru. You will hardly find Burgundy Grand Cru that costs less than € 110. And if you do, it will be an extreme rarity. The yields on the best Burgundy wines are gradually reducing and demand is increasing accordingly - which is why we would recommend this category for investment at any time. And the 2020 Frederic Esmonin Ruchottes-Chambertin even comes with great points and a very low yield.

If you believe in the future of Burgundy Grand Cru, this is an advantageous opportunity to join. Because no, there is no such thing as a cheap Grand Cru, but this one seems far, far too cheap. This one also has many years left in it. Invest, leave it alone, and follow how the Burgundy market develops in the coming years. In any case, there are many indications that the unequal relationship between yield and demand creates interesting opportunities for the investor.

Invest in 2020 Frederic Esmonin Ruchottes-Chambertin

2020Frederic Esmonin Ruchottes-Chambertin750OC12€ 110
*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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