Champagne’s Positive Price Mix Leads To Sales Growth In U.S.

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imagesChampagne sales in the U.S. market climbed by 1.2% to about $477 million last year, despite a 3.5% drop in depletions to 1.24 million cases, according to Impact Databank. The U.S. performance was still 6.3% below the $508.8 million achieved in 2006.

Major producers like Moët Hennessy’s LVMH were experiencing an encouraging price mix with prestige cuveés, rosé and vintages in high demand. LVMH’s top two sellers in the U.S. Moët & Chandon and Veuve Clicquot enjoyed a combined market share of approximately 60% while both lost volume last year down 7.3% and 0.9%, respectively. Among the U.S. market’s other leading Champagne brands, third-ranked Perrier-Jouët was flat, while fourth-ranked Nicolas Feuillatte and fifth-ranked Piper Heidsieck were up by 1.6% and 2%, respectively.

Champagne’s new product activity focused on high end markets, i.e., Champagne Charles Heidsieck launched a new brut ($65) and rosé ($80) réserve expressions in September 2012 to mark 160 years in the U.S. “Demand will continue to increase as appreciation and prestige of Champagne continues to rise,” says Cecile Bonnefond, CEO, Champagnes Piper-Heidsieck and Charles Heidsieck.

Global Champagne sales, meanwhile, inched up 0.2% to approximately $5.68 billion, despite a 4.4% shipments decline to 25.73 million cases. Champagne’s growth in emerging markets such as China (+51.8% to 167,000 cases in 2012) has raised concerns about long-term supply. Champagne’s total stocks in 2012, however, were 120.3 million nine-liter cases with a stock–to-shipment ratio of 4.7 years, well above the ideal level of three years.

The geographical area of the Champagne AOC will begin to be revised later this year and gradual plantings could begin in 2015 and end in 2020 in a process not expected exceed a maximum 1% to 2% of the existing AOC. “Champagne AOC area is limited and volume growth will be limited one day,” says Etienne Auriau, CFO, Veuve Laurent-Perrier & Co. “However, for the moment, we have enough stock to supply the market for the years to come.”

Source: Shanken News