[Thanks to Dr. Liz Thach MW for some of the USA information I’ve used here].
Covid-19 seems to have dealt the champagne business a severe blow. Remember when I started blogging on the plague I said that it doesn’t change the world – it will accelerate changes that are already happening. That too is happening I think to champagne – although many will disagree with me and say it has overturned the existing landscape. However, let me explain what I think is happening.
Right at the beginning of the crisis it was noted that champagne sales were plummeting, although the perennially optimistic CIVC was saying that it expected an upturn before the end of the year. Fifty percent of the wine is (still) sold in France – though the amount has been declining for the last decade but much is sold in bars and restaurants. With these closed for around four months volume reductions of up to 70% were seen. Meanwhile, as I’ve noted before, the English speaking world avoids anything which smacks of celebration or success during a recession and it has moved away from champagne. By the end of May the champagne industry was suggesting a possible loss of sales of 1.7 billion euros for the year and the original hopes for a recovery in fortunes passed by. More recently it has been suggested that they will sell 100 million fewer bottles this year than normal. The result of this was a big split within champagne. On the one side were the large houses, already sitting on huge levels of unsold stocks and not wanting to augment them – who thus demanded a big reduction in this year’s harvest. On the other side the growers who have much less need to sell wine but who rely primarily for their income on selling lots of grapes, and in the middle of the current crisis could not afford to lose perhaps 25% of their income or more.
Nevertheless, if you look at the recent history of champagne none of this decline is quite so revolutionary. For seven years, from 2001 to 2008 the business was on a roll – continuing the fairly continuous rapid growth seen for the region’s wines for the previous 50 years – as the table below shows. I remember, in May 2008, hearing a leading member of the CIVC pronouncing publicly that champagne had ‘learnt how to beat the cycle of booms and downturns’. If only! I assume he was eating his words six months later.
The global financial crisis prompted – naturally – a downturn, with a sales loss of almost 15%. Yet a few years later the business seemed to be bouncing back, so that by 2011 over one half of that loss had been clawed back. However, it wasn’t as good as it seemed – as the graphic below shows. What could be seen as a growing market up to 2011 turns into a stagnant market from 2009 to the present, and despite a good year for the value of sales in 2019, even before Covid-19 arrived this stagnation wasn’t really changing.
What does this mean? The champenois have been concerned from some time about the threat of sparkling wines from other parts of the world; I think that is too simplistic a view. My interpretation is that the reason for this longer term stagnation has complex origins, some of them quite long term. The rise of ‘lifestyle’ rather than social class as one significant marker of identity means that the old obvious signifiers of the community you belonged to, based on a traditional hierarchical symbolism of the things we use, is breaking down; champagne, once the symbol par excellence of the French bourgeoisie and the British aristocracy has less cachet than before and less use as a means of conveying who you feel you are. Add to that the fact that a new generation of consumers is much less likely to swallow marketing hype (and thus the assumption that ‘champagne is naturally the best because we all say it is’) and you have a tendency to move away from the fizz. This was reinforced by the instant response of the champagne industry to the economic crisis of 2008, which was to reduce prices to push up sales. That’s great in the short term, but in the longer term, with some champagne priced a little more than a good crémant from Alsace, or a better Spanish Cava, subliminally it suggested that it wasn’t such a special drink as all that. Finally, over the last five or ten years, a more general move to nationalism and national introversion (think Trump, Putin and Brexit) and consumers are again moving away from the luxury drink from another country.
Yet, as always with wine, there are exceptions to this. Blips for some of the summer in Britain and Norway. Most interesting is the USA. Sales were stagnant there at the beginning of the year – yet astonishingly, whilst they have collapsed elsewhere in the English-speaking world, they have been rising in the United States. At the end of July Nielsen, the data tracking organisation, claimed that champagne sales had risen 65% since May. This is an astonishing turn around – so why has it happened? Nielsen themselves found it hard to explain to us. There was general comment about the warmer weather, people coming out of lockdown, and doing more gardening – as well as the popularity of ‘quarantini’ cocktails! Hardly responsible, I’d say, for such a big growth in an expensive drink. If anyone has any suggestions I’d love to hear them.
Paradoxically, as I’ve also noted previously, outside the USA other forms of sparkling wine have seen sales behave more buoyantly. Maybe this is, partly, due to the success of champagne producers in separating their wine from other forms of fizz. Champagne has been marketed for over a century as the wine for celebration, success and seduction; all other wines with a sparkle – prosecco, cava, Tasmanian, even English – are for having a good time with friends or family. In lockdown, and even more as lockdown eases it’s the latter which benefit – we want to be sociable again; however, we have nothing to celebrate, there is no success yet, so champagne is not appropriate. Perhaps more than any other part of the world of wine champagne must be hanging out for a vaccine, and the wild parties which will inevitably follow. Maybe that, too, will enable them to transcend not just the current crisis but also the longer-term stagnation.