DRC Assortment Cases: What Are They Worth?

DRC assortment cases attract keen interest from Burgundy collectors.  And why not?  There is something attractive about getting an overview of the world’s greatest Pinot Noir all in one case.  This initial excitement, however, begs two questions: Is it good value?  And, once you’ve gotten the case in your cellar, what did you pay for each of those bottles?  The short answer is that for valuation purposes one should consider the Assortment Case as one unit.  If you plan to drink it, however, you might want to know how much each bottle is setting you back.  This is how to make the calculation:

As with so many things, the answer is, “It depends”.  We should begin with the caveat that the “DRC Assortment” is not a fixed thing.  Initially begun in order to ensure steady sales of the “non-monopole” wines, it was meant to reflect the amount of the wines available at harvest.  In an average year, there was one bottle of Romanée-Conti, three bottles of La Tâche, and two bottles each of Richebourg, Romanée-Saint-Vivant, Grands Echézeaux and Echézeaux.  However, in some years there were only two La Tâche (as in 1983 and 1984); in other years (1987 – 1992  inclusive) there were there were three Romanée-Saint Vivant and only one Grands Echézeaux.  In some years (such as 1984 and 1992) there were more than one variant.  The last official 12 bottle assortment produced was the 2001.  In 2002 there were two different six bottle assortments released; one for the U.S. and one for the E.U.  Since that time the Domaine has produced assortments at the request of individual importers, but there has not been one standard release since this time.

Looking at 2001 as the last official DRC assortment, then, we note that the average price at auction of the assortment is $34,893.00, while if one purchased each of the components, the aggregate cost would be $32,285.00, resulting in a premium of roughly 8% for the assortment case.   One finds furthermore that rounding to the nearest whole percentage that the bottle of Romanée-Conti accounts for 38% of the total, the three bottles of La Tâche account for 26% of the total; The two bottles of Romanée-Saint-Vivant and Richebourg each account for 11% of the cost; the Grands Echézeaux is 8% of the cost and the Echézeaux is 7% of the cost (weightings do not total 100% because of rounding – see above for exact figures).

These proportions change from vintage to vintage.  For example, looking at the 1996 assortment, the average price at auction of $36,052.00 represents a premium of 8.29%, with the Conti valued at 38%, the La Tâche at 27%, the Richebourg at 10%, and the Romanée-Saint-Vivant, the Echézeaux and the Grands Echezeaux all at 8% of the total.  However, the result is different in a year such as 1990 where the price of La Tâche is strong, and the proportions can look quite different.  Here the average cost of a 1990 Assortment Case is $49,016.00, while the cost of the components would be $55,480.00, meaning the Assortment sells for a discount of almost 12% over the component parts; Romanée-Conti is 32.24% of the total, the three La Tâche actually amount to 32.76% of the total; Romanée-Saint-Vivant is 11.90%, Richebourg, 11.31%, Grands Echézeaux 6.49% and Echézeaux 5.31%.

This somewhat anomalous result is due to the fact that 1990 Romanée-Conti has come off its historic high price, while La Tâche 1990 is still appreciating.  However, averaging each of these three vintages produces something like a balanced answer to this question:  The discount for an assortment is 0.91%, thus it is more or less the same price, and the relative weighting seems appropriate, with Romanée-Conti being 35.4% of the total, La Tâche at 29.4% of the total; Richebourg, 10.9%, Romanée-Saint-Vivant, 10.5%; Grands Echézeaux 7.2%, and Echézeaux 6.6%.

Wine Auction Market Update H1 2017

The value of wine moving through the auction market in live sales at major commercial auctions increased slightly in the second quarter of 2017 to $104 million, a gain of 1.7%. This brings the total for the first half of the year to $152.3 million as compared to $144.2 million last year, a gain of 5.6%. The Q2 gain came in spite of the fact that this period last year saw the $21 million mega-sale by Bill Koch. Average sell through rates across all auction houses during the quarter were a very robust 94.6%.

Consistent with recent experience, the U.S. sales totals led the market with just over $85 million in turnover, accounting for 55.8% of the total auction market. Due to the anomaly of the Koch sale, however, the total was slightly less than last year, at $86.7 million. Within the U.S., the bulk of the sales (65.8%) were done in New York, while the HDH sales held in Chicago accounted for 28.6%, and several small sales in California accounted for 5.6%

Auction House Acker, Merrall & Condit was the big winner in the first half of the year, with total sales rising to $42.1 million from last year’s $28.7 million, an increase of +46.7% Acker’s nearest competitor was Sotheby’s, who hammered down $33.7 million of wine in H1, a drop of -30.2% compared to last year when they led the field. Zachys ($25.9 million) edged out HDH ($24.3 million) for third place, and Christie’s came in fifth at $17.4 million. To put matters in perspective, however, Christie’s global sales were more than double the next three houses combined (Bonham’s, Heritage and Spectrum).

Burgundy sales continued to be very strong. Zachys Wine Auctions reported Burgundy to be the largest category in their auctions during the period. Prices for top Burgundy also continued to move forward: the average bottles of ’90 Romanée Conti rose to $17,900, + 2.8% for the quarter, while 1999 La Tâche increased to $5,100, +8.6% in the same period. Young vintages also performed well: Liger-Belair’s La Romanée was up +17.8% from last quarter and a robust +28.8% from the 2016 average. All of the Burgundy wines have advanced from their 2016 average prices; a bottle of 1993 Leroy Musigny realized more than $8,000, and 1996 Coche Corton Charlemagne sold consistently for over $5,000 per bottle. In some instances, the spread between the high and low price for top Burgundy over the past year has been marked: Sotheby’s New York sold a single bottle of 1990 Romanée Conti for $31,850 in May, while Acker, Merrall realized just $14,020 in their January Hong Kong sale. In April of this year, two bottle of 2005 DRC Montrachet made over $17,300, while a bottle sold at Spectrum in December sold for just over $3,900.

Interestingly, Acker, Merrall reported that Bordeaux wines led their sales in the first half of 2017 for the first time in several years. All of the leading indicators for the Bordeaux market have continued to move forward during the period, albeit at a slower pace than Burgundy. The price for ’82 Lafite is up 4.4% for the quarter and 5.7% for the year to an average of $2695. Unlike the ’82 Lafite, which experienced such a bubble in 2011, the 1989 Haut-Brion continues to make steady advances, to $1,671 in Q2 from $1,569 in 2016 and $1,520 in 2011, while 2000 Pétrus continues to gain as well. Counter-examples include 1963 Quinta do Noval Nacional at -27.6% to an average of $3,978, and 1999 Guigal Côte Rôtie La Mouline -16.4% against the 2016 average to $552/btl.

Significant single-owner sales during the period included the third tranche of the Don Stott cellar at Sotheby’s, which saw 87% of the lots sell above the high estimate. Six bottles of 1971 Roumier Musigny sold for more than $85,000 among several other world records for Roumier, Rousseau, Raveneau and others. Sotheby’s also sold the collection of an anonymous English vendor for US$ 9.3 million over the course of three sales spread across the U.S., U.K., and Hong Kong. Christie’s sold the cellar of Staffan Hansson quite successfully in New York and a consignment of venerable Burgundy from Bouchard Père et Fils, some dating to the 19th century in Geneva, while Acker, Merrall produced record results with single owner cellars from Wolfgang Grunewald and Sam Cook, and Zachys did an exemplary job for the cellar of Dr. Rob Caine in the course of their $7.9 million La Paulée sale.

In the primary market, sales of 2015 Burgundy have been delirious, with widespread shortages in spite of a rather generous vintage. This is good news for Burgundy growers, and welcome as yields in 2016 were sharply limited by frost, hail, and rot depending on the particular locality. Auction buyers can expect this limited supply to translate into increased prices on the secondary market, however, as new consumers turn to auctions to satisfy their Burgundy needs. The Bordeaux market is also showing moderate strength on the back of a fairly robust 2016 futures campaign. Quality in 2016 was superb, and while some châteaux tested the market by raising prices, others held the line and delighted buyers with the prospect of an eventual bargain. While recent statistics suggest that total worldwide wine consumption is flat to slightly down, it seems that the thirst for the good stuff is stronger than it has been in some time.

Champagne and Burgundy Continue to Surge

The Champagne category performed well in the first quarter of 2017, as indicated by prices for 1996 Krug Clos de Mesnil, +43.8% over 8 trades in the first quarter.  Prices for the regular 1996 Krug Brut  and the 1990 Dom Perignon were up more modestly at +7.3% and +11.1% on a broader base.

Top Bordeaux wines were flat or down moderately in the period: ’89 Haut-Brion was -0.9%, ’82 Lafite was +1.3% and 1990 Cheval was +3.8%, while 2000 Petrus was -9.2% and ’89 Lynch Bages was -13.9%

Growth continued for many Burgundy wines.  The biggest gainer was ’93 Leroy Musigny at +52.5%, but there was only one trade during the period (in the Acker Grunewald sale), although other vintages of the same wine also showed sharp growth and Leroy generally has been very buoyant in spite of fairly high prices.  1990 Rousseau Chambertin continued to show good growth at +31.9%, and even younger vintages, such as the 2010 Liger-Belair La Romanee was +9.4%.  Some of the less well-known wines showed slower growth however: no ’09 Cathiard Malconsorts came to market, but the ’05 vintage was +3.7% in the period, and the ’05 Fourrier Clos Saint-Jacques was +0.9%.

Results were mixed for white Burgundy.  1996 Coche Corton Charlemagne showed comparatively modest growth at +2.9%, but 2005 DRC Montrachet was +57.5% over 11 bottles trading hands, with 9 of them at Acker’s Chinese New Year sale.

Elsewhere, prices were generally higher for Rhone wines.  ’90 Rayas was +14.5%, and ’98 Bonneau Celestins showed the most growth of any indicator in the period at +62.8%.  Others, however, had dropped: ’78 La Chapelle was -1.4% (no ’61 traded hands), and the ’99 La Mouline was -17.7% with 50 bottles trading hands.  Italian wine drooped slightly: ’07 Masseto was -6.5% in spite of a strong showing at the Sotheby’s New York sale, and ’90 Monfortino was -4.9%.

New World wines were mixed.  ’01 Grange was +4.3%, but ’97 Screaming Eagle was -3.8%, and ’94 Dominus was -5.7%, while Port continued to show modest growth, with ’63 Nacional +7.6% and ’77 Taylor’s at +4.0%.

Wine auction market sales sharply higher

The wine auction market showed ruddy good health in the first quarter of 2017 after a somewhat slow initial start. Total volume through the marketplace was $68.1 million, as compared to $43.5 million during the same period last year. The average lot value this year is considerably higher, at $3,938 this year as compared to $3,168 last year, and the total number of lots coming to sale is also up – from 15,001 in Q1 last year to 19,111 this year, with three more sales on the calendar. In addition, the average sell-through rate was more robust, with 92.52% of lots offered finding buyers as compared to 91.75% last year.

Sotheby’s continued to lead the market, with a total of $24.6 million in the quarter over seven sales, with an average sell-through rate of 93.8%. This total included a three-sale set of single owner sales all from the same anonymous vendor that totaled $9.3 million. While not the magnitude of last year’s Koch sale, this was still a significant sale, and their success with big single owner sales continues to help business getting on this front. They have recently announced the sale of another tranche from the Don Stott collection for May 20th, with a presale estimate of $2m – $2.8m.

Second place was won by Zachys at $13.8 million, driven in part by their very successful La Paulée auction, worth $7.9 million. The average sell through rate of 98.3% outperformed the marketplace. This is a very strong result, particularly given the fact that there was only one sale in Hong Kong and one sale in New York during the quarter. Zachys just edged out Acker, Merrall, who sold $13.5 million over four sales, while HDH sold $11.3 million in the quarter with their two Chicago sales, selling every one of their lots for what some would call a “white glove” result.

Christie’s and Bonhams were both slower than last year, albeit off a smaller base.  Dallas-based Heritage organized a sale in Beverly Hills, while last year they did not during the first quarter.

Strong results for Zachys La Paulée sale

La Paulée de New York for some collectors the highlight of the year’s wine calendar.  This is undoubtedly true for the consignors at Zachy’s La Paulée auction, which turned in a very robust result with 99% sold and an aggregate achieved of $7.88 million.  The named collection from Dr. Robert Caine sold particularly well, and Coche-Dury generated notable interest, with cases of 1992 and 1996 Meursault Perrières each realizing $39,200 against estimates of $18,000 – $28,000, a new world record for both wines.  The top lot of the sale was a 1990 DRC assortment case that earned $49,000, above the average for this wine.  In all, DRC accounted for 16 of the top 25 highest-grossing lots, suggesting that DRC prices are still strong.  The first day of the sale largely featured non-Burgundy wine, and these lots also sold well for the most part, with the caveat that results for California wine outside of the rarest lots were comparatively much weaker than other categories.

2017 Wine Auction Season Off to a Mixed Start

The 2017 wine auction season began with two sales in Hong Kong in advance of the Chinese New Year holiday to mixed results. Acker, Merrall reported strong interest in their January 14th sale at Grissini for their consignments directly from Burgundy domaines. The domaines participating included Jean-Marc Roulot, Fourrier, Hudelot-Noellat, Lamarche, Lignier, Duroché and Clos de la Chapelle. Some prices commanded a premium as in the example of magnums of the 2007 Roulot Perrières, which sold for $2,975 each, as compared to $2,032 at HDH a year ago. Magnums of the 2007, however, achieved less than they did at Sotheby’s in December 2015 ($2,125 as compared to $2,245). Elsewhere prices were also moderately strong, with Acker reporting their top lot as six bottles of 1999 Romanée-Conti, which made $121,110 ($20,185 per bottle), ahead of last year’s average with premium of $16,174 per bottle, but considerably less than the $25,381 per bottle achieved last November by Christie’s Hong Kong. The Acker sale overall was US$ 5,492,773 over 992 lots, 92% sold.

Sotheby’s Hong Kong has also reported the results of their first sale of the season featuring the Connoisseur’s Cellar Part II, at US$ 3,333,581 over 939 lots, a rather disappointing 87.2% sold. Sotheby’s saw great interest in Pétrus (24 lots, all sold), and Japanese Karuizawa whisky, with 35 lots, all selling through completely. Elsewhere, as at Acker, however, prices were mixed. Two bottles of ’45 Mouton sold for $18,846/btl. This was less than the 2016 average, but it should be noted that this average price last year was considerably buoyed by their own result for Bill Koch back in May, when they achieved a remarkable $34,300 per bottle for the same wine. Six bottles of 1990 Échézeaux “Henri for Georges” Jayer, however, sold for $6,282, attaining very nearly the level they did in that landmark sale, when it brought $6,533/btl.

Hong Kong during Chinese New Year is a heady place, though it seemed that buyers were saving their excitement for later in the year. Let’s hope that the rooster brings his trademark passion and courage to the wine buyers everywhere. 恭喜发财!

2016 Wine Auction Market Analysis

Executive Summary

Auction sales picked up considerably in the second half of 2016, carrying the results into positive territory, ending the year at $299 million, +2.22% over last year.  While burgundy wine continues to sell well, prices for some top wines are beginning to plateau, although there is still upward movement to prices in this category.  Prices for Bordeaux wine are making a resurgence in the secondary market, although it is less than some hope or claim.  In the primary market for fine wine, the campaign for the 2015 Bordeaux vintage showed prices that were higher than the trade would like but lower than the producers would have liked, while the bellwether Hospice de Beaune auction announced results sharply down from last year.

2016 Wine Auction Market Review

The auction market for fine and rare wine finished second half of 2016 in vigorous fashion, with US$ 154.8 million in sales, +7% over the same period last year and +6.8% above the first six months of the year.  This made up considerable ground, as value had dropped by -2.98% in the first half of the year, despite some high profile sales during the spring season.  Interestingly, the increase in the total sales came despite a drop of 6.7% in the number of lots coming to auction, showing a healthy increase in the average lot value and pointing to greater quality of property coming to sale.

Specific highlights of 2016 included the following:

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Zachys Offers Wines Direct from Domaine Faiveley and Nath. Johnston

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Lovers of old claret, burgundy and Italian wines will swoon at the offerings in the Zachys Holiday sale on December 2nd.  This triple-header features a number of strong consignments from various vendors, but really takes off with a selection from the cellars of Bordeaux negociant Nathanial Johnston that includes the 6 bottles and one jero of Petrus 1924, reconditioned at the property, but also more than 2 cases of the sublime ’64 Petrus, mags of the epic ’49 Cheval Blanc, 1890 Pillet-Will Margaux, ’49 Cos, 1916 Gruaud Larose eand 1919 Yquem.  The second chief highlight is a consignment direct from Faively, which includes the first-ever jeros of their  super-cuvée of Clos de Bèze, Les Ouvrées  Rodin, as well as Clos des Cortons from the ’28 and ’59 vintages.  The trifecta is completed with a rich selection from Italy that features large parcels of Masseto and Gaja as well as a robust selection of almost all of the top Italian collectible wines.

Sothebys to auction Bollinger directly from their cellars

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Led by a “tasting opportunity” featuring Bollinger 1914, Sotheby’s November 19th New York sale features “A Century of Bollinger” in addition to a number of other interesting consignments, including more than 200 lots of DRC containing more than fifty cases in original, banded OWC.  Also featured are the cellar of the late Martin Kaplan, rare 1960s Burgundy of good provenance such as full cases of ’66 Clair Daü Bonnes Mares and Rousseau Chambertin, as well as a magnum of 1947 Cheval Blanc.  There are also two charity lots to benefit La Cité du Vin in Bordeaux, one of which features a jeroboam of 2000 Mouton and lunch at the château for six, -while the other includes an imperial of ’95 Pétrus and lunch at the Moueix prepared by chef Michel Guérard of the eponymous Michelin three-star restaurant.

Zachys “The Vault” single owner 100% sold, above high estimate

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The New York tranche of Zachys multi-day single owner sale earned more than $5.5 million for the consignor, continuing a strong performance that began in September back in Hong Kong. There have also been two online segments, one of which is continuing. The combined total to date, after the two live sales and one online, is $11,986,289. The two top lots in New York both made $91,875: an imperial of 1961 Latour, and six magnums of 1988 Roumier Bonnes Mares, while six magnums of Rousseau Chambertin 1991 generated $51,450. Wines from Roumier and Rousseau, in fact, dominated the top ten, with seven of ten wines coming from these two iconic Burgundy producers.