W INE COLLECTORS like to proclaim that “all roads lead to Burgundy.” They often wince at the plonk they drank when starting their hobby. In America and Australia, a common entry point is local “fruit bombs”: heavy, alcoholic wines that taste of plum or blackberry; bear the vanilla or mocha imprint of oak barrels; and should be drunk within a few years of bottling.

As oenophiles gain experience, they start seeking reds to have with, say, chicken as well as steak. That leads to lower-octane French options: Cabernet Sauvignon from Bordeaux rather than Napa; Rhône Syrah instead of Barossa Shiraz. But once you value complexity and finesse over power, your vinous destination is pre-ordained.

Encyclopaedic wine knowledge is most precious in Burgundy. The French region is split into hundreds of named vineyards. In turn, myriad producers own specific rows within each vineyard, from which they all make unique wines. This yields thousands of distinct pairings, each consisting of a few thousand bottles at most.

Moreover, red Burgundy is made from Pinot Noir, a grape with a maddening ageing pattern. After a few years of storage, it tends to “shut down” and lose flavour. The best wines blossom after a few decades, but many never “wake up” from their slumber.

In the past, Burgundy’s complexity and small output relegated it to a market niche. A decade ago, Bordeaux—which makes fewer distinct wines in larger batches—became popular in Asia, and prices soared. But the bubble burst in 2012, when China’s government began to frown on lavish gifts.

As tastes moved on from commoditised Bordeaux, mastery of Burgundy became seen as the test of connoisseurship, both in Asia and the West. But the region’s vast array of wines—including trophies as scarce as 300 bottles a year—makes reliable pricing data hard to find. Among the hundreds of fine red Burgundies, Liv-ex, a marketplace, includes just 11 in its regional index.

To create a sturdier measure, WineBid, the biggest online wine auctioneer, kindly gave us a full sales record for every wine sold at least ten times on its site since 2003. The data contain 1.6m lots, covering 33,000 wines. We built portfolios of 50-500 of the most expensive unique labels (one vintage of one wine) from each region. We then estimated the returns for each portfolio, before storage and transaction costs.

Collectors who have drunk most of their Pinot already may need another glass after seeing the results. By the end of 2018, red Burgundy had returned 497%, versus 279% for the S&P 500. (Our index does not extend to 2019, since many of the wines it contains have not been traded this year.) The index has also been less volatile than stocks are, though this may be an artefact of how it is calculated: no one knows what each wine would have sold for in the crash of 2008-09. Bordeaux and Champagne rose by 214% in 2003-18; everywhere else did worse.

It is hard to fathom how Burgundy can maintain such appreciation. Many people can buy a $300 bottle. But at $3,000, the market depends on the whims of the rich.

Even if prices keep rising, the best-performing stocks tend to beat their vinous peers. For example, Kering and LVMH —luxury conglomerates whose owners have bought Burgundy vineyards—returned 958% in 2003-18. And with dividend yields over 2% in recent years, they have paid enough income for a grand cru bottle, too. The best way to make money in Burgundy is probably making wine, not buying it. ■

Sources: WineBid; The Economist