The Investment Potential of 2022 Burgundy
The Investment Potential of 2022 Burgundy
Now the 2022 Burgundy En Primeur campaign is well under way, Senior Portfolio Manager Matt Small looks into the investment and ageing potential of these wines.
With the Burgundy 2022 EP release well underway and expectations high following the low yielding 2021 vintage, merchants, collectors, and consumers will be focusing on pricing from a campaign that promises both high quantity and high quality.
The 2022 Growing Season & Harvest
Unlike the warm harvests of 2019 and 2020 two very important factors separate the 2022 vintage from previous years. Firstly, the diurnal range was high (temperature difference between day and night) and secondly, we had two large bouts of rainfall in June and August. Lastly the large yields also dissipated the effects of the warm summer temperatures. The combination of these factors helped the red wines maintain a freshness and gave the whites a strong salinity.
Total production for the 2022 vintage was 1.72 million ha of wine (322 million bottles). This is 18% above the 5-year average for the region.
Yields in 2022 have averaged 40-50hl/ha for the reds, and 40hl/ha for the whites. For context the legal maximum yield is 42hl/ha for Grand Crus and more for lesser appellations.
Whites accounted for 62% of the harvest, with reds making up 27% and Crémant de Bourgogne the remaining 11%.
Critic Opinion
“2022 is an amazingly consistent vintage…I would recommend going large in 2022, large in the sense of a broad range because there are so many really good wines at all levels.”
Jasper Morris MW, Inside Burgundy
“2022 produced, surprisingly enough given the exceptionally hot and dry growing season, fresh, bright and utterly delicious, if not classically styled, reds and whites…The wines are indeed ripe and rich yet they manage to retain unexpectedly good freshness and vibrancy as they have less of that extremely sunny character of the prior vintages…To my way of thinking, perhaps the best attribute of the finest 2022 whites is just how refreshing they are. And by the same token, the best attribute of the best 2022 reds is their generous textures, a seductive blend of velvet and punch if you will. In sum, the best 2022s incorporate a bit of everything without too much of anything.”
Allen Meadows, Burghound
“I cannot remember a Burgundy vintage that elicited so much joy from barrel…The 2022 vintage is Burgundy’s latest trick: a treasure trove of bright ‘n bushy-tailed whites and reds in a season that implied such wines would be impossible, wines predestined to give immense drinking pleasure.”
Neal Martin, Vinous
Market Conditions
The Burgundy 150 index despite falling 16.1% in 2023, remains the best performing region over a 5-year (+25.8%) and 20-year (+651.3%) time horizon.
2023 saw profit taking amongst Burgundian investors, liquidating their investments following a 1.5-year bull market which saw the index increase 42%. The current 0.4 bid/offer ratio for Burgundy wines listed on the Liv-Ex would suggest we may see prices fall further however the illiquid nature of the region is currently providing interesting buying opportunities for the mid to long term investor.
Overview
As with all primary market releases, pricing will determine demand. The increase in quality vs the 2021 vintage will put upward pressure on pricing however this will be counteracted somewhat by the increase in yield (supply). The 2022 vintage has good ageing potential as the grapes were picked earlier due to the warm summer conditions which ensured the balance between ripeness, acidity and structure. The intensity and balance of these elements is what increases the ageing potential and investment potential of the wines.
