UK 'not the future for Champagne growth'
- Tuesday 2 April 2013
'Long-term job': Jean-Marie Barillère
Europe, and particularly France, UK and Germany, may have traditionally accounted for 80% of Champagne volume sales, but tomorrow's growth markets lie beyond the region.
Export markets like the UK are ‘not where growth will be found and the houses must anticipate this change by investing in distant markets, especially in America and Asia. It is a long-term job, requiring considerable human and financial resources,’ Barillère, formerly of Moët Hennessy, said.
Speaking as he took over from Ghislain de Montgolfier, with whom he has worked as Union des Maisons de Champagne vice-president since 2007, Barillère said, ‘In terms of markets, Champagne must undergo a profound transformation.’
Champagne must also do more to adopt a growth model based on creating value, he added.
‘[We have] had several decades of growth but mainly in volume terms, while there has been little increase in value. This growth model cannot be pursued any longer. We cannot double the production of grapes in the next twenty years.’
Value in the UK, in particular, was hit hard by the onset of recession, although there are signs of recovery. In 2012, the average bottle price rose to €14.50, from €13.56 in 2011, despite a slip in volume sales. 'Champagne customers may be drinking less but they’re spending more,' said UK Champagne Bureau Director Françoise Peretti.
The US showed a similar rise in bottle price.
But, given the steady rise in grape prices, of around 3% per annum over the past few years, margins for many producers are still down.
Year-end figures from the Comité Interprofessionnel du Vin de Champagne (CIVC) show that, in 2012, countries outside Europe accounted for 19.7% (60.95m bottles) of total Champagne shipments, the highest level since 2007, when they took 17.5% of shipments.
The most important market outside Europe remains the US. Although shipments there fell 8.7% in 2012, a market value of just over €371m gives an average bottle price of €20.98, the highest among the top ten export markets.
The only top ten export markets in growth are Japan, up 13.8% to 9.06m bottles in 2012, and Australia, which rose by 11.2% to 5.4m bottles.
Shipments to Japan have risen over two and a half times over the past ten years, while value has risen in the same period from €80.74m to €173.64m – a figure which is less than €15m behind Germany.
After the US, Japan and Italy remain the two top ten markets with the highest average bottle price, but volume in Italy fell back 18.4% in 2012.
Growth in the Chinese market has accelerated. In 2011, shipments rose 19%, and in 2012 they jumped 52% to cross the 2m bottle mark, at an average price of €13.85. This is lower than the €14.50 average price in the UK.
India grew by 20%, Russia by 10.3%, while Brazilian shipments dropped by 6.7%.