2Future Holding expands investment in cultural enrichment with new stake in French winery

On the heels of our recent investment in Portugal’s gastronomical heritage, 2Future Holding is expanding cultural investment opportunities by purchasing a 50-plus percent share in a French winery. While the investment does not have any direct ties to existing 2Future Holding’s investments, it dovetails with the cultural component of our company’s legacy building efforts and focus on making a better future.

Last month, we announced our investment in restaurant O Frade, a stake designed to play a role in further advancing Portugal’s phenomenal Alentejo cuisine, a culturally significant style of prepared food that is considered the country’s gastronomic soul. 2Future Holding is now taking a stake in France’s storied wine producing heritage with an investment in a winery located in the heart of one of the country’s top wine producing regions. As with the O Frade investment, 2Future Holding interest in the winery is spurred by its existing high quality as well as its future potential to increase in value, both monetarily and culturally. The winery already produces stellar wines in one of the world’s most renowned wine-making regions — 2Future Holding will strive to help further enhance the quality of the wines and expand the winery’s cultural reach.

Investing in a rich heritage

Our investment in Maison Arnaud Boué represents an investment in Bourgogne, an historic French wine region that produces some of the world’s most expensive and exclusive wines. Commonly referred to as “Burgundy” by English speaking countries, Bourgogne has been producing wine since at least the second century AD, though ancient Celts may have been producing wine in the region in the centuries before it was conquered by the Romans in 51 BC. Bourgogne wines have been frequently noted in various French historical records since the sixth century AD, but their status was significantly enhanced during the 14th and 15th centuries with various government decrees that banned imports of non-Bourgogne wines. Additional regulations from local governments and the Kingdom of France in subsequent centuries served to further enhance the commerce of Bourgogne wines and protect the unique characteristics of their vineyards.

Today, Bourgogne wines — “Burgundies” — are primarily of the pinot noir and chardonnay varieties. Bourgogne is the most terroir-oriented wine region in France, with the focus on how the land and environmental factors affect the taste of each wine giving it the highest number of appellations d’origine Controlée (AOC) of all French wine producing regions. Most of the 150 or so appellations are classified into four quality categories — “Bourgogne,” “Village,” “Premier Cru,” and “Grand Cru” — with Grand Cru representing appellations of the highest AOC level. Only two percent of Bourgogne wines are produced from grapes from Grand Cru vineyards, while Premier Cru vineyards account for 12 percent of the region’s production. Village wines, which make up 36 percent of production, are produced from supposedly lesser vineyards in 42 Bourgogne villages, though each are recognized for having specific qualities and taste. Bourgogne-designated wines are considered as standard wines primarily intended for consumption immediately or within three years of the vintage date.

Wine making is big business in Bourgogne

Perhaps needless to say, but the higher level appellations are designed with aging (“cellaring”) in mind. Such aging can increase a wine’s value, as evidenced by recent record breaking sales. In 2018, Bourgogne wine producer Domaine de la Romanée-Conti (DRC) smashed the world record for most expensive bottles of wine, with two 1945 vintage Grand Cru bottles sold at auction in 2018 for US$558,000 and US$496,000. DRC is just one of many expensive and exclusive wineries in Bourgogne. With a history stretching back to the 13th Century, the winery produces from 6,000 to 8,000 cases per year, with per-bottle prices for each year’s releases typically ranging from just under US$2,000 to more than US$20,000.

Other big names in Bourgogne wines, such as Domain Leroy, Henri Jayer, and Domain Armand Rousseau, can command equally impressive prices for their wines. Lesser known producers, as well as lower level appellations, also command high prices, especially when compared to similar wines produced in other regions.

All this means that wine making is big business in Bourgogne. In fact, exports of Bourgogne wines (to more than 140 countries and territories as of 2019) topped US$1 billion for the first time in 2019, a threshold that held in 2020 despite the global COVID-19 pandemic. While exports to Bourgogne’s leading market — the United States — dropped by 15.2 percent by volume and 22 percent in revenue in 2020, these declines were largely offset by higher volume and revenue export numbers from European countries. Overall, the value of Bourgogne wine exports has grown by 42 percent since 2005.

Maison Arnaud Boué one of Bourgogne’s newest wineries

While Maison Arnaud Boué is one of Bourgogne’s newest wineries, it has grown quickly since it was launched in 2018 — growth that can now accelerate with help from 2Future Holding. The winery is the brainchild of Bourgogne native Arnaud Boué, who grew up under parents who passed on their love for cultivating grape vines for pleasure. This passion led Arnaud to pursue a university degree in oenology (science of wine making) and agricultural engineering. With degree in hand, Arnaud traveled and worked in Bordeaux, South Africa, and New Zealand to study how the best of their regional wine making compared with that of Bourgogne’s. Once back home, he spent 10 years working and further expanding his wine making expertise in some of the most prestigious wine houses in Bourgogne.

With help from crowdfunding, Arnaud secured enough funds to take over a trading house originally founded by one of his friends. Housed in 12th century buildings, Arnaud’s goal is for Maison Arnaud Boué to produce among the best wines of Bourgogne — an ambition that we thoroughly look forward to helping bring to fruition.

Maison Arnaud Boué already kicking into higher gears

In three short years Arnaud is already off to a great start. Maison Arnaud Boué is producing quality red and white wines under all four of the primary AOC classifications. Bottles from grapes from the 2017 harvest are being exported to European countries, the U.S., and Asia, with marketing of the Maison Arnaud Boué brand being actively conducted by both the winery and its export partners. While this marketing includes a robust Facebook page, Maison Arnaud Boué also raised its profile by shipping wines to the U.S. via sailboat in an eco-friendly venture designed to highlight carbon-free shipping. Maison Arnaud Boué wines traveled to Canada and the U.S. on the inaugural voyage of Grain of Sail, which is providing carbon-free shipping of wine, chocolate, and coffee between France and the Americas.

The relative scarcity of Grand Cru and Premier Cru grapes suggests that Arnaud has the expertise and reputation needed to secure such a valuable commodity, a commodity that cultivators want to ensure are used to produce only the finest wines. In fact, Arnaud has a hands-on approach that addresses all elements of production, from vineyard to bottling. This means that Arnaud works with his grape growing partners to protect and improve their terroirs. As an agricultural engineer, Arnaud encourages his partners to cultivate using natural practices that account for soil health and biodynamics, and helps them achieve and/or maintain organic certification. Going forward, Arnaud is working on ensuring that all of his vintages will be certified organic.

2Future Holding plans as managing partner

Arnaud’s attention to detail, focus on striving for the best, and support for eco-friendly practices fits in perfectly with 2Future Holdings’ business philosophy. We look forward to collaborating with Arnaud and helping manage Maison Arnaud Boué affairs, both on the operational and business side. In the near term, we will focus on expanding distribution to the Americas, and hope to have it soon available in Brazil. Meanwhile, our investment will help the winery renovate new production space that includes two vat rooms, two cellars, offices and a reception area. It will also help boost production of future vintages. At some point, Maison Arnaud Boué may want to purchase its own vineyards, and, if so, we would work with Arnaud to expand this component of the winery’s operations.

Wine as an investment vehicle

In recent years, investing in fine wine has emerged as a trend similar to that of investing in art, antique cars, and old coins. In fact, there is an active market in secondary market wines that tops US$5 billion annually. Popular collectible wines see daily trading activity and there are wine portfolio companies that help clients buy and store their wine. This includes U.K.-based cult wines, which claimed in 2018 that its clients see annual returns of between 13 and 26 percent, and U.K.-based Farr Vintners, which manages about $523 million of wine in bonded storage for more than 14,000 clients. Depending upon the wine invested in, some investors reportedly see 20 percent to 40 percent gains in just a year or two. And, it should be noted, French wines from Bordeaux and Bourgogne tend to be among the most actively traded.

While this adds further support for our investment in Maison Arnaud Boué, why invest in the wine, when you can own part of the winery?

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Luís Felipe Neiva Silveira

Brazilian entrepreneur and investor. CEO of 2Future Holding, a business group that represents in three continents the operations of a Family Office.