CHAMPAGNE IS AT A CROSSROADS. Growth in consumption has stagnated over the past seven years since the 2007 peak. French domestic sales have been in decline for the past four, falling back to pre-1997 levels and although France remains the largest single market this downward trend is expected to continue.
Other large mature European markets like Italy and Germany look unlikely to yield much growth either. And while the Champenois have invested faith and money in relatively new further flung markets as being the most likely contributors to longer term growth, in the current world economic climate that strategy looks ambitious.
And if new markets outside Europe and not including the current three most significant – US, Japan and Australia, which between them accounted for nearly all the 10% growth of this sector in 2014 – represent the future for champagne sales growth, then the Champenois have to address the fact that these countries don’t have the tradition of buying and drinking champagne.
No longer top of the list
Many new consumers have no reason to automatically place it at the top of the world sparkling wine hierarchy. (You could argue that conviction is being shaken in key traditional European markets due to Champagne’s image being tarnished by bargain basement supermarket offers. That’s a view widely held in Champagne today.)
After consultation about the need for reform of the appellation under the aegis of the 2030 review started in December 2012, it seemed early last year that there was a groundswell of support for relatively far reaching changes.
There was apparently wide agreement on the need to improve Champagne’s image, to make it easier to put a distance between champagne and other sparkling wines by taking recognisable measures to improve the quality at all points of production.
Changes that would for example, extend the minimum lees ageing non-vintage champagne (the vast bulk of the market) receives, add a requirement for several months post-disgorgement ageing before shipment, reduce the amount of juice that can be used from one 4,000 kilo pressing, cut the amount of taille (second pressing) that may be used and finally ban the trading of sur lattes champagne. A lot of these proposals are aimed at hampering those producers selling cheaply without, as the saying goes, adding value.
When in April 2014 I spoke to the man who has effectively been championing the need for reform on behalf of the négociants he represents, President of the Union des Maisons de Champagne (UMC) Jean-Marie Barillère was hopeful of being able to make an announcement about reforms before the summer break.
Talking to him again this year, he seems a good deal less optimistic about the likelihood of reaching agreement soon, though he remains convinced of the need for change to preserve Champagne’s quality image.
Reducing the amount of champagne that is sold too cheaply is one of the key elements of the 2030 report which sets out that “[only] between 105 and 110m bottles are sold ‘well’ with an ex-cellars price of Ä20 or above”. Barillère says the ‘value’ is currently being added by just 13 or 14 houses which between them account for these 110m bottles or so bottles.
A quick look at the UK and French domestic markets over the Christmas period when prices fell below £10 and under Ä8 a bottle suggests that ending, even severely reducing this sector of the market is not going to an easy job. And indeed Barillère confirms that there are elements within all three groups in Champagne – the négociants merchants, co-operatives and growers – who are resistant to changing their current business model. If some meaningful reform isn’t announced by the summer – if it hasn’t been agreed by the end of June it won’t happen this year Barillère confirms – then champagne watchers will be sceptical about the likelihood of meaningful change being introduced by the Champenois until the next crisis comes.