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Champagne In High Demand, Pressuring Supply Of Key Brands

November 29, 2021

Champagne has rebounded strongly in 2021, and as the holiday selling season gets underway, the biggest problem facing the category may be shortages of preferred brands. “Premiumization is a trend that continues across categories, and Champagne is no exception,” says Bill Edwards, senior vice president of on-premise national accounts at wholesale giant Southern Glazer’s Wine & Spirits. “It’s the affordable luxury consumers are craving. People are treating themselves. Where we used to think there were thresholds, those thresholds are being shattered. As we go into the holidays, we expect pent-up excitement to return to celebratory gatherings will continue to drive up demand for all things bubbly.”

That pent-up demand has already been manifesting across the country, with the total Champagne category jumping 20% by volume and 27% by value in Nielsen channels in the 40 weeks through October 9. Both retail and on-premise players are reporting difficulty in consistently keeping key Champagne labels in stock. “With Champagne shortages, consumers are turning to bubbly alternatives like Prosecco and Cava, so those categories are benefiting,” says Edwards. “In the on-premise, we’re telling customers to have pre-approved alternatives on their drink menus, so if a customer orders something that’s not available staff can offer a similar option.”

The situation is similar at the retail tier. “We’ve been working feverishly with our retail partners by engaging in forecasting activities,” notes Scott Moore, Edwards’s counterpart as Southern Glazer’s SVP of off-premise national accounts. “These efforts should support, stabilize, and mitigate some of the concerns of our national account partners. But some items will have a limited presence based on shortages due to transportation, importing, and production, even with these actions.” Moore adds that labels like Veuve Clicquot, G.H. Mumm, and Cristal have recently been growing at parity or greater than that of the category.

Sourcing top labels has become much harder lately, retailers report. “Right now the biggest challenge is Champagne specifically, and all the LVMH products, including Dom Perignon and Veuve Clicquot,” says Jonathan Blue, principal of Liquor Barn, the 23-store Kentucky retail business recently acquired by delivery startup Gopuff. “We’ve had to bring in super-premium brands and build displays with those that are equivalent to those international icons in order to meet demand. There is no Nectar Imperial, there is no Dom Pérignon Rosé in our market. So we’re having to substitute as fast as possible in order to cover demand.” Lacourte Godbillon, Jean Richecourt, and Charles Mignon are among the new labels Liquor Barn has brought in to help address the supply crunch.

In terms of sourcing key brands, “Champagne has been awful,” adds Josh Robinson, co-owner and liquor buyer at Colorado retailer Argonaut Wine & Liquor, speaking to the supply chain challenge. “Anything imported right now is having problems. It’s been going on for most of 2021, but it started really getting worse in Q3. And everything I’m hearing is that it’s going to last at least a year or two, and might get worse before it gets better.”

The supply issues—as well as ongoing premiumization—have contributed to rising prices in the category. The average unit price of Champagne on Drizly is up by about 20% to $51 in the current year-to-date compared with 2019. And according to Nielsen IQ, off-premise sales of sparkling wine over $100 jumped 48% in the 52 weeks ending October 9, with Champagne being a key driver. “We expect that shortages will be a factor in this category, especially during the holidays, potentially driving consumers to pay more for these products,” says Liz Paquette, head of consumer insights at Drizly, the delivery provider recently acquired by Uber for $1.1 billion. “We expect shortages will lead some consumers to shop outside of the top brands, which may cause a shakeup, if not within the top five, certainly the top 20.” Drizly’s top five-selling Champagnes so far this year are Veuve Clicquot Brut Yellow Label, Dom Perignon Vintage, Moët & Chandon Impérial Brut, Veuve Clicquot Yellow Label Gift Box, and Nicolas Feuillatte Brut Reserve Exclusive.—Daniel Marsteller

Top Six Champagne Brands in the U.S.
Rank Brand Importer Total 2020
Case Volume1
2021 Rolling
Percent Change
in IRI Channels2
1 Veuve Clicquot Moët Hennessy USA 548 20.7%
2 Moët & Chandon Moët Hennessy USA 462 12.2%
3 Dom Perignon Moët Hennessy USA 50 34.1%
4 Nicolas Feuillatte Ste Michelle Wine Estates 43 21.8%
5 Laurent-Perrier Laurent-Perrier US 41 42.7%
6 Perrier-Jouët Pernod Ricard USA 38 19.3%
Total Top Six 1,182 19.1%
1 Thousands of 9-liter case depletions.
2 52 weeks ending October 3.

Source: IRI & IMPACT DATABANK © 2021

 

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