Bubbling To The Top – Champagne’s Revival

AS ECONOMY REBOUNDS, CHAMPAGNE RECLAIMS ITS PREMIUM PERCH

Today, Champagne is bubbling to the top. If further proof were needed that Champagne has regained some swagger since the “Great Recession” lows of 2009, consider pancakes and pumpkins. In a seasonal, if counterintuitive match-up, Denny’s now offers pumpkin-flavored pancakes, eggs, sausage and a bottle of 2004 Dom Pérignon at $300 for two in its new Manhattan financial district location. (Skip the bubbly and Denny’s Grand Slam breakfast goes for $18!)

Sure it’s a gimmick. But given massive opening day coverage in New York newspapers, Denny’s high-low marriage of pancakes, pumpkins and Dom Pérignon generated reams of invaluable publicity, as well as traffic, for the establishment’s cocktail bar.

On a more populist note, in towns large and small, merchants and restaurateurs have seen a welcome revival of consumer interest in the enduring celebratory and gustatory pleasures of perhaps the most famous of all wines: Champagne.

While noting the importance of the fourth quarter to all sparkling wine brands—when as much as a third or more of total annual sales of such bubblies are transacted—Aygline Pechdo, Brand Director, Champagnes at Pernod Ricard USA, identifies another important factor that is driving sales of Champagne on a firmer year-round basis. “Both Perrier-Jouët and Mumm are currently benefitting from the ongoing consumer trend toward premiumization,” says Pechdo, “meaning that consumers are willing to spend more on products that they know are of higher quality.”

RALLY TIME

Sales trends confirm Champagne’s premium-oriented rally in 2014. The Nielsen Company reports that French Champagne is in better shape over the last 52 weeks when compared to the prior 52 weeks, which experienced year-on-year declines in both dollars (-1.1%) and cases (-6.4%). The latest 52 weeks shows growth in dollars (+1.7%) and a slight decline in cases (-0.8%).

CHAMPAGNE Sales 2008-2013 Source-Champagne Bureau_09122014
This chart tracks exports of Champagne to the USA from 2008 to 2013, with volume up approximately two million bottles from a low in 2009.

That slight decline in volume is attributable, retailers and Champagne importers say, to the rising popularity of less costly sparklers, especially Italian Prosecco. In contrast to an average of $35-$45 a bottle price tag for a classic brut, non-vintage Champagne, these sparkling wines retail for as little as a quarter or a third the price. No doubt nudged by the recession, many consumers traded down. But with improving economic conditions today, Champagne sales are far more robust than five years ago.

As the premiumization takes hold in the Champagne segment, the “dollar” portion of the Nielsen insight takes on added importance in terms of profitability. Today, as never before, brands big and small are introducing a bevy of new luxury and prestige cuvées, spanning extra-dry and vintage-dated reserve bottlings to single-vineyard rosé and zero dosage offerings. Even if bottle volume dips a bit in 2014 for Champagne, both the dollar ring and profit per bottle appear to be headed up for retailers and restaurateurs this year and on into 2015.

 SELECTION + EDUCATION + TRAINING

Hermen Key, Managing Director of Spec’s, a group of more than 100 stores across Texas, says, depending on the store location, a customer will find 30 to 50 Champagnes. Why the big selection? “People want to try something different, just like beer drinkers interested in craft beers,” Key explains, adding, “Champagne lovers have gravitated to small producer and rosé Champagnes.”

 

To boost customer awareness of Champagne’s versatility beyond anniversaries, birthdays, promotions and the holidays, Jim Shpall, President, Applejack’s in Wheatridge, CO, says, “We try to educate our customers that Champagne is great for any occasion, for a dinner at home or enjoyed as an aperitif. We regularly feature one or more Champagne brands in newspaper ads and in our regular email blasts throughout the year.”

Staff training is likewise an important element in selling Champagne beyond the fourth quarter. Tim Wilson, Corporate Beverage Director, Wolfgang Puck Fine Dining Group, with 22 fine dining locations in the U.S., says, when it comes to Champagne, “Obviously, many of our guests are looking for a Champagne, but you have to have a strong in-house training program.” It pays off in sales of Champagnes Wilson describes as “mid-majors,” like Henriot Brut and Billecart-Salmon Brut Rosé; each goes for $24/flute.

EYE-CATCHING IMAGERY

To lure and reward consumers, packaging creativity is reaching new heights. From Veuve Clicquot’s bright orange iterations—an origami-like fold-out ice bucket container or a “mail box’”containing a bottle—to Philip Starck’s simple, hand-lettered label for Roederer Champagne’s Brut Nature 2006 or Nicolas Feuillatte’s colorful canisters, packaging helps elevate a Champagne brand’s image with its affluent consumer base.

Collaborating with internationally acclaimed art talent is a central plank in Champagne Ruinart’s global and U.S. marketing strategy. Nicolas Ricroque, Ruinart’s Brand Director at Moët Hennessy USA, says that this holiday season, Ruinart partnered with Scottish visual artist Georgia Russell to create a bottle sculpture that perfectly embodies Ruinart’s Blanc de Blancs Champagne.

Champagne Collet’s 2006 Collection Privée, strictly from Grand and Premier Cru vineyards, also saw partial (34%) oak aging. And to draw more attention this holiday season, it comes in an Art Deco gift box that converts to a cooler.

But packaging need not be deluxe. Classic boxed brut, non-vintage entries represent a definite plus for retailers and their clients, especially during the holidays, notes Eric Goldstein, Vice President, Marketing at New York’s Park Avenue Liquors. He explains, “To give a recognized Champagne brand its own box… it makes both the purchaser/gift-giver as well as the recipient more comfortable.” He wishes more suppliers would go the box route.

With the U.S. economy inching ahead more confidently, merchants, sommeliers and restaurateurs have more reasons than ever to promote Champagne on a round basis.

Armed with greater selection, innovative packaging and a greater willingness of consumers to trade up to luxury-priced cuvées, there are sound reasons to celebrate year-with Champagne throughout the year.

LEADING INDICATORS: A FROTHY PICTURE

Signs of Champagne’s resurgence are out there, in distinct areas.

The Economy

Martin Sinkoff, Vice President, Director of Marketing, Frederick Wildman and Sons, Ltd., importer of Pol Roger Champagne, sums up the upbeat outlook .

“Champagne is very healthy right now as the economy in the U.S. rebounds,” he says. But Sinkoff adds a pointed caveat, “We’ll have to see how the recent stock market ups and downs affect the market. Champagne sales follow the Dow!”

Ritz-y Room Service Reels In Increased Sales

Ryan Stetins, General Manager and Wine Director at Ritz-Carlton’s Parallel 37 in San Francisco, stocks 80 different Champagnes year-round. He adds: “Champagne is very popular in our room service. Now any Champagne we have on Parallel 37’s wine list is available to our hotel guests ordering room service.” Stetins happily reports that this ultra simple shift has dramatically increased the property’s total Champagne sales, especially two grower Champagnes Stetins features: Pehu-Simonet NV Brut at $95 a bottle and Jean Vesselle NV Rosé at $105.

Pink Power

Sam Heitner, director of the Champagne Bureau, a Washington, D.C.-based trade office representing Champagne interests in the U.S., reports that from about 5% of total U.S. Champagne sales in 2008, rosé sales have reached almost one out of every six bottles of Champagne sold or poured—a record 15% share.

The U.S. is now France’s number-one export market for rosé Champagne in the world. Spec’s in Texas, Applejack’s near Denver and Park Avenue Liquors in New York all relay that their rosé Champagne sales have tripled or more in the past few years.

Looking beyond the wine’s colorful appeal, Ryan Stetins of the Ritz-Carlton has another theory. “The rise of rosé is related to the wine’s higher dosage, which translates into a fuller body and a sweeter palate.”

Could rosé’s popularity cast its halo toward demi-sec Champagnes in the future? Stranger things have happened.

Editor’s Note: The author wishes to thank Beverage Media for permission to post this article, which appears in the December 2014 edition.