Burgundy: A Basic Lesson in Economics

Supply-and-demand.svgGuess what? We’re not the only ones who think Burgundies are fabulous. To quote Michael Jackson, “you are not alone.”

It all comes down to the simple law of supply and demand. For good Burgundies, there is generally more demand than supply. French people like their wine, so there’s less to export to the non-Frenchies. Not everybody lives in Burgundy or is fortunate enough to have family to “visit” there, like me (muhahaha). By the time things are shipped out, we’re left with a smaller pool to choose from. Throw in the tariffs and shipping, and Burgundies can be pretty pricey. So, how do you get the best bang for your money?

I collected data from 5 highly regarded books on Burgundy, 8 websites where you can actually purchase wine from, 3 well respected wine tasting sites, my own experiences as well as those from some of my peers – whew… I then loaded it all into one massive spreadsheet. Voila… the beginnings of an optimization analysis. (I know, I am a complete freak show, but I can’t help it. It’s ingrained in me after all of those years in Investment Banking). You get to benefit from the fruits of my labor. Looking exclusively at wines that are either 100% Pinot Noir or 100% Chardonnay from the Côte d’Or, here are the questions I asked and then cross-referenced to produce the output below:

  • Who are some of the top producers – Maisons (grower and negociant) and then Domaines?
  • What terroirs allow me to find value?
  • Can I actually find these wines at a liquor store by my house?
  • Is the price of these wines between $20-40?

Drum roll please….

Top Producers:

Size Matters: Economies of scale… Take a look at a map of the Côte d’Or wine region. Now look at the following Maisons:

  • Maison Louis Jadot: Founded in 1859 with roots in the vineyards of Beaune dating back to 1826, this Maison is now owned by their previous US importer, the Rudy Kopf family. Their vineyards are scattered across 154 hectares (380.5 acres) in the Côte d’Or, Måconnais and Beaujolais.
  • Maison Bouchard Père et Fils: Their colorful history dates back to 1731. They are now owned by Henriot. With 129 hectares (321 acres) of vineyards (33 acres of Grands Crus and 183 acres of Premiers Crus), Bouchard is massive. I wrote an in depth article on Bouchard. To further illustrate my point above about the Frenchies keeping the goods for themselves, someone like Bouchard exports only 52% of their production. Bouchard produces between 3-3.5 million bottles per year. Um hello… that’s a little over 1.5 million bottles just for the Frenchies!
  • Maison Joseph Drouhin:In 1880, Joseph Drouhin founded his own wine company. Today, this domaine is comprised of 73 hectares (182.5 acres) of vineyards in Côte de Nuits, Côte de Beaune, Côte Chalonnaise and Chablis. The majority of these vineyards are classified as Premiers and Grands Crus. I originally met some of the family members on a trip to their vineyard in Oregon, Domaine Drouhin. They are the absolute loveliest people. I was able to catch up with Véronique Drouhin-Boss who is in charge of wine making at both Maison Joseph Drouhin and Domaine Drouhin while she was in New York yesterday and hope to follow-up with an article on their wine making philosophy in the near future. (If you trek out to the Willamette Valley, their Vineyard was one of my favorite ones.)

That’s 202 hectares (884 acres)! A Maison acts in both the negociant and grower capacity, so it makes wine from grapes grown on premises as well as grapes of other growers. They have it all… region (for example, Bourgogne Blanc, Bourgogne Rouge), district (for example, Côte de Beaune Villages, Côte de Nuits-Villages), commune (for example, Saint-Aubin, Marsannay) and single vineyard (for example, Les Ruchots). (Here is an overview of the classification system of Burgundy:). If the wines are made from their own grapes, it is noted on the label as Domaine. You can find some really nice values at the region, district and commune levels of wines for each one of these maisons. They have their footprint in almost every commune. Do the math on that. We all know that there are economies of scale here as production, shipping and marketing costs are all kept down. You benefit and you can actually find these wines in many locations.

Own it: Do what you do and do it well. Some winemakers have a foothold in one or two communes. They know their family’s terroir like nobody’s business. Instead of hearing “Good Night Moon” or “Dr. Seuss” when they were 5 years of age, they were probably hearing bedtime stories about the terroir from their grandparents. Take advantage of that. Here are the communes and smaller producers where I found quality and availability (so decent volume and aggressive importers) within our set price parameters. Use these communes as guidance for the 3 maisons I mentioned above.

REDS

(north to south)

  • Marsannay-la-Côte (Marsannay): This commune has no Grands Crus or Premiers Crus, but it’s relatively easy to get a tasty Marsannay for anywhere from $20-35. Typically, expect black fruits and possibly some licorice. Sometimes, these wines can be a little fruity and lighter in weight. Here are some domaines of note: Domaines Joseph Roty, Jean & Jean-Louis Trapet and Bruno Clair.
  • Morey-Saint-Denis: This region is nestled in between Chambolle-Musigny and Gevrey-Chambertin.  (Here’s an in depth look at Morey-Saint-Denis.) It’s tough having super famous neighbors, so some of the Premiers Crus (single vineyard) offer a value proposition. You’re going to have to search, but search you must. You can find some of these for under $40. Check out Domaines Hubert Lignier, Frederic Magnien, Pierre Amiot, Arlaud, Fourrier and Heresztyn.
  • Savigny-lès-Beaune: Roughly 85% of what they produce is red. There are no Grands Crus, BUT there are 22 Premiers Crus and many within a $23-45 price range. It’s relatively easy to find these with a $30 handle. LOOK for them. Expect to taste red fruits, mocha and/or coffee and possibly some dusty tannins. Domaines Joseph Roty, Bruno Clair and Lignier Michelet and Maison Nicolas Potel are names to track down for value and quality.
  • Santenay: Located at the base of Côte de Beaune, but one of the larger communes, Santenay is known for light bodied reds, many which can be found for between $16-40. Typically, their wines are considered to be rustic, gamey, possibly with some smoke on the palate. Look for the following producers: Domaines Joseph Roty, de la Pousse d’Or, Louis Latour and Vincent Girardin; Maisons Joseph Drouhin and Nicolas Potel.
  • Bonus Round: Here are a few other value propositions to look for in the Côte d’Or — Chorey-lès-Beaune, Ladoix, Nuits-Saint-Georges (loads of inexpensive 1er Crus here) and Monthelie. I know I said I would focus on wines from the Côte d’Or  this time around, but I can’t help but add Givry from Côte Chalonnaise to this list.

SIDEBAR: 1er cru vs. Premier Cru – When grapes from two or more Premiers Crus vineyards are blended, the label will will not state the specific Premiers Crus vineyards the grapes came from AND “1er Cru” will appear on the label in lieu of “Premier Cru.”

WHITES

(north to south)

  • Saint-Aubin: Nestled right by illustrious Meursault, Puligny-Montrachet and Montrachet, this commune offers outstanding values, with decent wines for $14-36. Roughly 2/3 of  their production is Pinot Noir, but I really enjoy their whites. One of the wine makers I met in Burgundy jokingly referred to Saint-Aubin as the “poor man’s Montrachet” (P.S. not derogatory in any regard as this wine maker ‘fessed up to Saint-Aubin being his daily, go-to wine). It’s fairly easy to track one down for $35. Expect citrus, white flowers, stone/flint and austerity on the palate. Look for Domaines Pierre-Yves Colin-Morey, Jean Marc Morey, Jean Chartron, Jean Rijckaert and Philippe Colin.
  • Chassagne-Montrachet: Right next to Saint-Aubin, but slightly southeast, Chassagne shares Le Montrachet and Båtard Montrachet with Puligny-Montrachet. Look for the Villages and Premiers Crus. You can find some for around $30. Expect floral tones, intermingling citrus, light yeasty notes and minerality. These wines tend to be more rich, rounded and succulent for the entry level. Search for Domaines Faiveley, Jean Marc Morey, Frederic Magnien, Bernard Morey, Chåteau de la Maltroye, Colin Deleger and Jean-Noel Gagnard.
  • Beaune: There’s lots of Pinot here and 3/4 are Premiers Crus, but there are some lovely whites. Be certain to look for Maisons Louis Jadot and Bouchard and Domaines Jean Marc Boillot and Chanson.
  • Bonus Round: Within the Côte d’Or, also check out Saint-Romain. Even though I am focusing on the Côte d’Or for this piece, I couldn’t help but include a few others, which are also in Burgundy. From Côte Chalonnaise – Rully, Montagny. From Måconnais – Måcon (and Villages – Comte Lafond makes a Macon Milly Larmantine that rivals any 1er Crus Puligny under $100; these sell for about $25-ish. And In between Måconnais and Beaujolais – Saint-Véran

ROSÉS

  • Marsannay Rosés: I love Pinot Noir. I enjoy Champagne made from Pinot Noir. I enjoy Burgundy made from Pinot Noir. And guess what… I enjoy rosés made from Pinot Noir. Marsannay rocks this genre out for $20-$30 (and sometimes under $20). Expect to taste strawberries with a bit of minerality. Some names to look for are Domaines Bruno Clair and Charles Audoin.
  • Source: Supply and Demand curve, Wikipedia. Used under the terms of their Creative Commons License.

    Burgundy – Domaine Jean Chartron and the 2009 Hospice de Beaune Auction

    Puligny-Montrachet is “the greatest white-wine commune on earth… The top Montrachet, Chevalier and Bâtard are wines to drink on bended knee with the head beared.” Alexandre Dumas

    Le Montrachet… Everybody wants a piece of it, so what’s with all of the dashes?

    Le Montrachet is probably the most famous white Grand Cru. The communes of Puligny and Chassagne share this beloved Grand Cru, so they both affixed their name to it, resulting in Puligny-Montrachet (as of 1879) and Chassagne-Montrachet. Puligny and Chassagne also share the Grand Crus Bâtard-Montrachet, which is located at the bottom of the slope, and, at the top of the slope, but still within Puligny, is the Grand Crus Chevalier-Montrachet. I am going to focus on Puligny-Montrachet.

    Puligny-Montrachet is only about 575 acres (230 hectares), in total. It contains 4 Grand Crus (Le Montrachet, Chevalier-Montrachet, Bâtard-Montrachet and Bienvenues-Bâtard-Montrachet) and 13 Premiers Crus.  For Le Montrachet, “part of the secret lies in the limestone, part in its perfect south east exposition, which keeps the sun from dawn till dusk.” The Oxford Companion to Wine, edited by Jancis Robinson. Chardonnay thrives here.

    Burgundy's Rolling Hills
    Burgundy's Rolling Hills

    Domaine Jean Chartron

    Grande Rue, 21190 Puligny-Montrachet
    +33 3 80 21 99 19
    www.bourgogne-chartron.com
    I visited Burgundy in the thick of the harvest. 2009 was shaping up to be an amazing vintage, but rainstorms were imminent. Rainstorms during a harvest have the potential to destroy a vintage by making the wines too flabby. The air was full of frenetic energy and the promise of a stellar 2009. The timing of my visit was not optimal since one of my missions was to spend as much time as I could with the producers. Despite the flurry of activity, wine maker Jean-Michel Chartron from Domaine Jean Chartron graciously welcomed us to his domaine. Fifth generation and not quite 40 years old, he is now at the helm of the family business. They have just shy of 30 acres (Puligny and neighboring villages), with the majority being Premiers or Grands Crus. They are very humble about the elegance and finesse of their wines and fly just under the radar for many. This Domaine is one to watch.

    I caught up with Jean-Michel again at the New York Wine Experience in late October and chatted with him once more on the phone post the Hospice de Beaune auction (see below) this past weekend. Over the course of our conversations, we discussed various vintages, the vision he has for his domaine, the region of Côte de Beaune and the Hospice de Beaune auction. His enthusiasm for wine, for his profession and for the region was both palatable and infectious each time we spoke. Jean-Michel’s vision for his wines is “to emphasize the expression of the terroir.” First and secondary fermentation of Domaine Jean Chartron’s wines occur in oak barrels, with new oak usage ranging from 10-45%. Their average barrel gets 4 years of use. With the continued emphasis on the terroir, he conveyed, “Going forward, I expect this will mean less new oak to show the fruits and the terroir, and for the viticulture, an expanded focus on our organic philosophy although we are already at 90% of our target.”

    Hospice de Beaune Auction

    When I spoke to Jean-Michel regarding this year’s auction, he was still pumped with the exuberance of the past weekend. “This year’s auction was nothing short of amazing. The number of barrels auctioned off was much higher than last year. If I remember correctly, it was something like 799 barrels vs. 540 from last year. Prices were stable for some and higher for others. The newspaper came out this morning quoting prices up 20.38% for 2009 vintage, which is really quite amazing. It’s a combination of (1) the auction being for charity and (2) the vintage of 2009 being an exceptional year. This year’s auction involved more private collectors than auctions of years past where it may have had more negociants. People showed a willingness to be generous.”

    Hospice de Beaune sidebar: The 100 years war left many in the areas around Beaune destitute. In 1443, Duke Philippe le Bon (literally Phillip the good) and his Chancellor, Nicolas Rolin, reacted by establishing a hospital for the poor – Hôtel Dieu. Make no bones about it, wine was and still is the industry of this region. People paid for services as (and if) they could with wine or donations of wine to the hospital. Over the years, the collection became immensely impressive. The Hospice de Beaune auction, which dates back to 1859, is conducted on the third Sunday of each November and benefits the Hôtel Dieu, which is now a museum, and the Hôpital de la Charité, which still serves the medical needs of those with lesser means and the elderly of the community. Until 2005, the length of the auction was dictated by the amount of time it took for a candle placed next the auctioneer to extinguish. When the candle burned out, the auction was over. Christie’s now hosts the auction.

    Tasting Notes:

    Please note prices below reflect those paid directly at the vineyard and are not inclusive of taxes, importing fees, etc. I chose to taste Domaine Jean Chartron’s whites this time. All of the wines below are 100% Chardonnay.

    District

    • 2007 Bourgogne, Clos de la Combe ( 10% new oak barrels / 90% barrels aged 1, 2, 3, 4 and 5 years. Maturing on fine lees for 6 months. 9.90€) apple and pear, minerality; really nice palate cleanser, suggest as an aperitif
    • 2007 Bourgogne, Hautes-Cotes de Beaune (Higher in altitude with 100% Barrel fermentation – 10% new oak barrels / 90% barrels aged 1, 2, 3, 4 and 5 years. Matured on fine lees for 8 months, 12.80€) hazelnut, apples, apricot, citrus

    Regional

    • 2007 Rully, Montmorin (100% barrel fermentation – 10% new oak barrels / 90% barrels aged 1, 2 and 3 years. Matured on fine lees for 8 months. 13.90€) melon, white flowers
    • 2007 Puligny-Montrachet (100% barrel fermentation – 30% new oak barrels / 70% barrels aged 1, 2, 3, 4 and 5 years. Matured on fine lees for 9 months. 31,90€) apricot, white peaches, hazelnut, gentle

    Single Vineyard, Premiers Crus

    • 2007 Saint-Aubin Murgers, des Dents de Chien (Situated 200 meters above the famous Grand Cru Chevalier-Montrachet, it is one of the best terroirs of Saint-Aubin. 100% barrel fermentation in 25% new oak barrels, with 75% barrels aged 1, 2 and 3 years. Matured on fine lees for 10 months. 24.50€) white peaches, apricots, white flowers, elegant
    • 2007 Puligny-Montrachet, Clos du Cailleret (100% barrel fermentation – 40% new oak barrels / 60% barrels aged 1, 2 and 3 years. Matured on fine lees for 11 months. Solely owned by the Chartron family since 1917. 48.00€) floral, elegant, creamy, flinty with beautiful minerality and a hint of lime zest – this one lingered on my tongue forever

    What did I buy, why and what would I pair it with?

    Turkey day is coming up for those in the States; I’d pick any one of of these as a white-wine option. A deliciously baked, juicy herbed chicken would be so yummy too. Also, wave in any goat cheese to go with any one of the wines below.

    • 2007 Bourgogne, Hautes-Côtes de Beaune
    • 2007 Puligny-Montrachet: This was my second fav from this domaine we tasted.
    • 2007 Saint-Aubin Murgers, des Dents de Chien
    • 2007 Clos du Cailleret: This was my favorite one that I tasted from this domaine. I loved the finish, minerality and complexity. I make a mean scallop and pumpkin risotto. This would be an unbelievable pairing.