Champagne’s Biggest Brands Post Solid Growth In Ongoing ReboundJune 12, 2012
The global Champagne category fell from 28.2 million cases in 2007 to 24.4 million cases in 2009—a 13.5% decline, according to Impact Databank and the Comité Interprofessionnel du Vin de Champagne (CIVC). Since then, trends have improved. Volumes stabilized in 2010, with Champagne posting 8.9% growth to 26.6 million cases, followed by a 1.1% gain last year. “Champagne follows the stock market,” says Pascal Boyé, Nicolas Feuillatte’s director for the U.S. and Latin America. “When it does well, we do well.”
The top five Champagne brands worldwide all showed volume gains in 2011, offsetting declines from smaller top-10 players like Piper-Heidsieck, Pommery, Lanson and Mercier. Category leader Moët & Chandon slowed to a 1% volume gain, while second-ranked Veuve Clicquot posted a modest rise of 2%. Nicolas Feuillatte showed the strongest performance of 2011, improving on 2010’s 16.4% increase with a 17.7% surge. Laurent-Perrier also accelerated growth last year with a 15.6% increase to 615,000 cases.
As global Champagne volumes continue to improve, so does value. During the recession, many brands were forced to lower their prices due to lack of demand, and producers worried that the move would have a long-term effect on the category’s image. The discounting of the past few years, however, appears to have had little lasting impact on Champagne’s luxury reputation, as the total value of Champagne shipments bounced back 8.6% in 2010 and again by 6.3% last year, to €4.4 billion ($5.5b). The recent uptick in demand, along with a limited supply and higher production costs, have led to a spike in pricing.
“The declines of 2008 and 2009 led many producers to hold pricing, even though grape costs were growing,” explains Thibaut Le Mailloux, communications director for the CIVC. The current cost for Champagne grapes is around €5.40 ($6.70) a kilo, making it one of the world’s most expensive grapes. “That has led to a situation in which the Champagne makers have to pass on costs to survive,” Le Mailloux adds. Champagne houses still worry about the impact of price hikes on the market. “We have to be cautious. It’s a tough economy, and we will have to raise prices, but we’ll do it in a smart way,” says Boyé.Tagged : Champagne