Champagne: the first prices set to disappear

“Low-end” champagnes are less and less popular with consumers. New forms of alcoholic beverage consumption and the steadily rising price of grapes in the region are slowly pushing these bottles out.

It is a staple of the end of year celebrations and with nearly five liters consumed per year and per adult, France remains, by far, the leading champagne market in the world. Unfortunately, it is on average more and more expensive. In question, the significant decrease in the supply of low-priced champagnes caused by the profound change in the consumption habits of the French. If they are still fervent lovers of sparkling wines, consumers are now more attentive to what they buy. Clearly, they consume less, but better.

The decrease in volumes observed since 2011 is confirmed. But despite a drop of nearly 4 million bottles compared to 2016, sales are holding up. The average price of the bottle now exceeds 20 euros. And the bottles sold at least at this price “now represent 48% of the market”, underlines the 2017 report of the Champagne Committee, ie 2.8 points more than 2016 and 11.5 points more than in 2013. A figure which had never been achieved so far. On the one hand, “the discount circuit has come to a halt, with 1.2 million fewer bottles”, indicates the Champagne Committee, on the other hand “the promotional pressure on champagne is easing in a context where the price war between brands is slowing down, ”he adds. While “prestige vintages” have never been sold so much, the champagne market “seems to be doomed to transform under the combined influence of consumer choices”.

New consumer trends

For 3 years now, the growth in turnover has been linked to the valuation of purchases: French households generally reduce the number of items in their shopping cart but spend more per unit, for example by favoring national brands rather than healthier private labels or product categories. These results reflect the change in attitude of consumers. In search of “better”, they are moving towards other channels such as organic brands, for example, whose turnover has increased 16% this year. There are many new alternatives emerging in response to rising champagne prices. Cémant, Muscat, Cava from Spain or other Prosecco from Italy have replaced the “low-end” champagnes on the shelves of our supermarkets. An evolution which implies that “the brands revise their strategies” to “get out of a spiral of loss of value which penalizes at the same time the distributors and the suppliers”, indicates the Committee.

The price of grapes on the rise

“While the grape generally increases between 1 and 2% per year, this year it has increased by 5 to 6%”, commented last November Franck Hagard, co-president of the Federation of Champagne brokers, in the specialist magazine Vine. In question, the decision of the MHCS group (Moët Hennessy Champagne Services) to buy its grapes 5% more expensive than last year to reassure its buyers about the quality of the 2018 harvests. If the LVMH subsidiary represents “only” a A quarter of French champagne production, it is nevertheless this which sets the tone in terms of market price trends. Having gone from around 4.25 euros in 2003 to 6.80 today, the price of Champagne grapes worries more and more small producers who denounce real supply difficulties.

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