Chanson acquisition: the changing face of Burgundy

Domaine Chanson’s foray into the Côte Chalonnaise with the acquisition of 50 hectares of vineyard says much about the changing face of Burgundy – with an increasingly bright light being shone on less heralded parts of the region. Richard Woodard reports.

According to Vincent Avenel, managing director of Domaine Chanson, the company’s business model has remained essentially unchanged since its foundation in 1750: domaine wines produced from its own vineyards, supplemented by négociant wines made with bought-in fruit or must. In that context, the acquisition of 50 hectares of vineyard by Chanson’s owner, Bollinger Group, is quite a big deal.

Last week’s purchase of Château d’Etroyes in Mercurey, along with its vineyards located in Mercurey and Rully  represents Chanson’s first vineyard venture in the Côte Chalonnaise, and is a direct result of the supply challenges currently facing Burgundy, exacerbated by a string of small harvests over the past decade.

Chanson’s domaine wines, sourced from its 43ha of vines in the Côte de Beaune – mainly premiers crus in Beaune, Chassagne, Puligny, Savigny, Pernand-Vergelesses and Santenay – account for roughly 25% of its business, with the company’s négociant wines representing the remaining 75%.

“This négociant part has become more and more complicated over the last few years, with small crops becoming very frequent, and purchase prices reaching levels at which profitability is questionable,” Avenel says. “The strategy behind this acquisition is continuing to have both types of supply – estate and contract fruit – but in a more balanced way. Burgundy is all about balance.”

This illustrates a popular misconception about Burgundy’s inflationary pricing environment, according to Richard Bampfield MW, a seasoned observer of trends in the region. “I know everybody thinks that because Burgundy prices have gone up so much, all Burgundians are driving around in Ferraris, and making a mint. But it’s simply not the case,” he says.

A succession of small, climate-impacted harvests has led to a drastic reduction in the amount of wine available, and cumulative price rises have failed to keep pace, Bampfield explains. “They’ve had this shortfall of production far too regularly over the past few years,” he adds. “The sums just don’t add up. The price increase doesn’t mean that Burgundy is more profitable than it was 10 years ago. I’d argue that it’s precisely the opposite.”

The consequence is an increasing willingness to explore – and maximise the potential of – relatively unheralded parts of the region. Asked why Chanson has bought d’Etroyes, Avenel simply says: “Great wines, fantastic value for money [and] inspiring competitors like Aubert de Villaine, Chamirey, Raquillet, Dureuil Janthial and Faiveley, just to mention a few of my favourites.”

Not only does the acquired vineyard “perfectly complement” the existing Domaine Chanson range, Avenel adds, it also expresses something about the region. “It says that there are plenty of fantastic wines in Burgundy at prices which have not gone through the roof,” he says. “For wine lovers (not label drinkers), there are tons of hidden gems if you pick the right producers. This is exactly what my team tries to bring to the market.”

Interesting and relatively off-the-beaten-path options include Montagny, Givry and the Mâconnais, Avenel says. “I recently had the opportunity to enjoy a Mâcon Pierreclos Chavigne 2016 from Domaine Guffens-Heynen. It easily bears comparison with more renowned white wine appellations from further north.”

Bampfield also highlights the fact that businesses like Chanson have facilities and infrastructure to produce and market more wine than they are currently processing, thanks to smaller crops. But expanding production is no easy task in the rarefied confines of the Côte d’Or – leaving them with little alternative but to look elsewhere.

“This is why a number of producers have been going into the Côte Chalonnaise, Beaujolais, the Languedoc and the Mâconnais,” says Bampfield. “That’s where you can get land at a reasonable price.

“We know that the wines from the Mâconnais are getting better and better … Part of that is improved winemaking. Producers have realised that, if they give a little bit more attention to their Mâconnais wines, they can produce something that’s a reasonable lookalike to the wines of the Côte d’Or.”

He adds that it also doesn’t hurt, given the current shortfall in quality white wine production across France, that roughly 80% of the 6,000ha or so of vines in the Mâconnais are Chardonnay.

As well as looking south, Burgundy’s winemakers might also want to look up. Laurent Delaunay, of resurrected négociant business Edouard Delaunay, champions the potential of the Hautes Côtes de Nuits, where he lives and where the Delaunay winery is located.

“Of course they don’t have the same reputation, or any premiers or grands crus,” he says. “But part of the future of Burgundy lies in the Hautes Côtes.” Soils and exposition are similar and, as the climate changes, an extra 100-200m of altitude has become a benefit, rather than a hindrance.

“When I started in this business [30 or so years ago], our family had some vineyards in the Hautes Côtes,” says Delaunay. “Then, we would get the reds ripening two years out of 10. Now it’s every year – and the wines are still affordable.”

Bampfield reckons Delaunay is “spot on”, thanks to the impact of climate change on growing conditions. “Just one degree can make a huge difference with Chardonnay and Pinot Noir,” he points out.

However intriguing (some would say belated) this exploration of the full potential of the Burgundy region may be, the elephant in the room remains the long-term trend of rising prices, fuelled by the twin factors of soaring global demand and restricted production.

This has consequences, and not only in the competitiveness of regional Pinot Noir and Chardonnay pricing.  Avenel warns: “Currently there is a strong shift towards premiumisation, but it is difficult to predict how far it can go and for how long.

“Demand is strong, supply is still short. For sure a certain type of business or channels or customers who are more price-sensitive will reduce or even disappear. Some Burgundy producers, depending on their strategy, business model and priorities – basically volume or value – will be more affected than others.

“One thing that I have learned from my 22 years’ experience in Burgundy, starting at Bouchard Père et Fils/William Fèvre, followed by Faiveley/Billaud-Simon and now Chanson, is that the most accurate indicator to know if Burgundy will continue or not on this trend is the international stock exchange situation, and I always keep in mind what happened at the end of 2008 with Lehman Bros, etc – but so far, so good…”