Champagne: The price of luxury

21 March, 2017

More sparkling wine is making its way into our fridges, thanks to the nation’s insatiable love of fizz, but Champagne is struggling to attract any value growth, with a drop of 7% since June last year (IRI).

So what can producers and retailers do to maintain Champagne’s luxury image without losing sales to other sparkling wines?

Jean-Christophe Gremillet, winemaker at Champagne Gremillet, believes producers are doing their best to maintain Champagne’s luxury image.

But, he says, multiple grocers are not helping by offering “such deep discounts on Champagne, especially in the run-up to Christmas”. He adds: “This destroys the premium image that producers have worked so hard to build and it is completely beyond the producers’ control.”

At London wine merchant Jeroboams, wine director Peter Mitchell says Champagne still dominates in the luxury stakes but promotions now play a big part. The top tier of Champagne continues to command high prices, he adds, with very little discounting.

“The constant presence of price promotion on the big brands has meant there are two prices, the RRP – at which sales are slow – and a promotional price, which the consumer has now been trained to see as the price they should pay.

“Sales are very strong when the brand is at its promotional level. At the very top end of premium cuvées, sales remain strong despite high and increasing prices and little or no discounting.”

ARE SPARKLING FANS TRADING UP?

Gremillet says sparkling wine fans are trading up, but not necessarily to Champagne.

“I think the rise of sparkling wine is opening consumers’ eyes to the range of alternatives to Champagne that are out there and at a lower price,” he adds.

“This is on one hand a good thing as it is growing the sparkling wine category, but Champagne producers now need to invest more in educating consumers about the differences between Champagne and other sparkling wines so that they understand why it is worth paying more for a premium product such as Champagne.”

Lynn Murray, brand manager for Taittinger at Hatch Mansfield, agrees, although she says: “There are many good premium sparkling wines in the market and there is an opportunity for everyone who produces a good quality bottle of bubbles. As consumers become more comfortable with categories some will begin to experiment and we embrace this at Taittinger.”

Alongside this, other producers are working hard with marketing and NPD.

Last year Moët partnered up for a second time with Selfridges to offer an exclusive personalisation service.

Shoppers were able to upload images of their choice to create their own front label for mini bottles of Moët Impérial Blanc and Rosé. Moët also released a Rosé partner to its Ice Impérial Cuvée, while Veuve Clicquot Rich was a campaign aimed at bringing the brand into both the “special and everyday” celebrated moments.

Julie Nollet, marketing and communications director at Moët Hennessy, says: “Innovation in wine is always necessary to keep up with market trends. Ice Impérial and Veuve Clicquot Rich were launched as a response to consumer demand to fill a gap in the market.”

Olivier Legrand, marketing and communications manager at Champagne Nicolas Feuillatte, agrees. “We consider that if Champagne is an exceptional product it should not be reserved for exceptional moments, it must embellish the moments which enchant us in life. This is where Nicolas Feuillatte has identified an emotional dimension to Champagne consumption and has set itself the task of reconciling luxury

and emotion, a mission that we summarise as Enchanting Life.”

The producer revived its communications plan last year to include new advertising, a chef-at- home service, a street marketing campaign – including social media – and a competition.

From a retailer perspective, Mitchell at Jeroboams says premium sparkling currently occupies a very small niche and is not a threat to Champagne, with one important exception – English sparkling.

“While sales are still relatively small, they are growing, as is general interest in the category. As most are priced squarely in Champagne territory, a good number are of equivalent quality and with the added allure of patriotism. I anticipate them taking a greater market share, albeit volumes available currently are insufficient to worry the Champenois.”

Meanwhile, Andrew Steel, director at Connoisseur Estates, points out that consumers are seeking dry wines more often.

“Our taste buds are drier now, rather than the sweet wines we used to drink. Therefore I think the quality image of Champagne will always survive,” he says.

HOW CAN RETAILERS CHAMPION THE SECTOR?

The key for retailers, says Murray, is to maintain the luxury image of Champagne. “There is a huge investment made in producing this top-quality wine – at Taittinger our average ageing time is five years across all our cuvées. This is a significant amount of time.

“Consumers are still looking for products where care and attention are at the heart. These cost more to produce and they are prepared to pay for this.”

Gremillet adds: “Retailers can champion the sector by stopping all the discounts on Champagne. It is impossible for consumers to see Champagne as a luxury product if it is being sold for less than half its normal price.”

Meanwhile, Maison Bruno Paillard is a small independent Champagne house, without the big marketing budgets of the bigger brands. Despite this, the producer says it had a “particularly active” 2016 in the UK and it introduced three new wines: Assemblage 2008, Blanc de Blancs 2006 and a special cuvée NPU (Nec Plus Ultra) 2003.

In the off-trade the producer only works with premium retailers, and hand-selling plays a big part. Manager Alice Paillard says: “The retailers we work with are people who constantly are in their shop speaking with their customers, creating a link.”

Paillard also promises “something quite special” is on its way this year.




Bookmark this


Site Search

COMMENT

Rosé tinted glasses

I was asked recently what I thought the biggest change had been in wine fashion in the past five years. My answer was unequivocal: sales of pink wines. From being a niche that expanded and contracted with the sunshine, rosé has subtly but steadily become a stalwart of many merchants’ ranges, with Provence firmly at the top and asked for by name.

Click for more »
Upcoming events

Polls

Is blended Scotch overshadowed by single malt in retailers?

  • Yes
  • No
  • Don't know

Facebook

Twitter