Champagne, a Luxury Product - Blessing or Curse

Champagne has always been seen as a thing ofparticularly pertinent when compared to
luxury. Most commonly found at celebrations beChampagne sales by volume which were down by
they weddings or on the podium at the Monaco2.1% in the same year. The statistics finally show
Grand Prix, Champagne's image has always beenthat sparkling wine's share in the UK wine
one of success. But perhaps that is where theoff-trade (by volume of sales) is currently 4% as
brand that is 'Champagne' suffers. If Champagneopposed to Champagne's 1% and still light wine's
is primarily associated with special occasions then87%. One must remember that the 'volume of
it must alienate a large majority of winesales' is not the same as 'value of sales' as it is
consumers solely on this point. Herein lies thehere that Champagne takes the crown with a
problem - Champagne's success is also its failure.market share of 6% compared to sparkling wine's
The top brands dominate not only the UK market4%. The main worry that the Champagne
but also those in the USA and Japan - namesindustry has when faced with the increasing
such as Moët et Chandon, Veuve Clicquot,dominance of good quality sparkling wine is that,
Perrier Jouët and Mumm crop up time andunless heavily discounted, Champagnes are not
again as the best sellers. Prestiges cuvéesable to compete in the £7-£10 price
such as Dom Pérignon, Cristal, Krug lead thepoint which remains the domain of sparkling wine.
way in terms of value of sales with rappers suchCava is the most popular sparkling wine on the
as 50 Cent and P Diddy endorsing their productsUK market at present with a total volume share
in their music, again ensuring the image ofof 54.6%. Two producers continue to dominate
Champagne remains one of wealth and success.the market - Codorníu and Freixenet, the
The exclusivity of Champagne and the confusionmarket leaders is Spain. They, like an increasing
surrounding the name does little to help thenumber of Champagne houses, own vineyards in
average consumer in their choice, however. As athe New World, California in particular to increase
retailer, there have been many occasions when Itheir stake in the global sparkling wine market.
have been asked to advise on 'Champagne' for aThese wines are rarely seen on the UK market
wedding when the consumer has been talkinghowever, possibly as a result of the strength of
about sparkling wine, especially Cava, rather thantheir Cavas.
Champagne itself. In this way, as I mentionedNew World sparkling wines from California,
before, Champagne has become associated withAustralia and New Zealand are also increasingly
celebrations and is often used as a 'catch all' termimportant in the UK market, especially brands
for both Champagne and sparkling wine. Studiessuch as Mumm Cuvée Napa, Green Point by
actually show that Champagne is an infrequentChandon and Lindauer owned by Montana
purchase in supermarkets with an average of 1.8(another brand owned by the now Allied Domecq
purchases per person, per year as opposed toPernod Ricard conglomerate). It is interesting to
five purchases per person, per year for sparklingsee that traditional Champagne houses have
wine as a whole (not including Champagne). Thediversified into these areas. They seem to bridge
research also suggests that 60% of consumersthe price gap between non vintage Champagnes
drink Champagne for social or entertaining reasonsand cheap sparkling wines as they mostly retail at
and that the average age of a Champagnearound £10-12 (discounts depending) without
consumer is between 35-64, although there is acompromising on the quality of the product to
strong female following of Champagne too in thewhich they lend their name. This seems to be an
17-24 year old bracket.astute move in a market where deep discounting
In sum, it seems that Champagne retains an auraof Champagne is happening less and less and
of exclusivity, although, in the market place, thewhere brand image is so important.
word 'Champagne' often conjours up images of aTo say that the growth of sparkling wines in the
sparkling wine drunk predominately on specialmarket place threatens the Champagne industry
occasions to those who are not au fait with thewould be untrue and the Champenois would
strict guidelines set by the CIVC to protect thecertainly disagree with the idea wholeheartedly.
name and image of Champagne.Perhaps the key is to concentrate on marketing
There is no doubt that the market fortheir Champagne brands at the sparkling wine
non-Champagne sparkling wine is increasing,consumer who purchases quality sparkling wine at
especially in the off-trade where total volumea price point at which the Champagne houses are
sales increased by 8.1% in 2004. This isunable to compete.