At the start of the pandemic, few would have predicted high times for Champagne.
It seemed reasonable to assume that a toxic combination of on-premise closures, a looming recession and rising unemployment was unlikely to help sales of celebratory bubbly. That was the view from every analyst I interviewed, back in March 2020.
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"Our initial evidence already indicates that consumption of Champagne has fallen dramatically, in stark contrast to sales of still wine categories via online channels," observed Wine Intelligence director Lulie Halstead.
"Although the on-trade sector has been shrinking in recent years, it is still an important avenue for sales of Champagne – a market that is obviously completely off limits for an indeterminable future. So we turn to the off-trade: in moments of national crisis consumers do not stop drinking, however, they are likely to focus on 'everyday' still wine categories at accessible price points – the impetus to splash out has been curtailed."
Figures released by the Comité Champagne (CIVC) in January 2021 were no less sobering. Exports declined by 18 and 20 percent in volume and value, respectively. There was a smattering of consolations: the 18 percent slump actually outperformed the initial forecast of 30 percent, while demand in the US and UK retail sector had remained, overall, surprisingly buoyant. But there is no doubt that many producers across Champagne are hurting.
Yet there is one segment that has been given a clean bill of health. Top-end Champagne isn't just thriving, it's surpassing all expectations. From the 2011 Clos de Goisses to the 2007 Bollinger RD, from the 2012 Winston Churchill to the 2006 Dom Pérignon Rosé, the market has been flooded with luxury releases. Demand is seemingly immune to all external shocks, save an asteroid impact.
"Three of the top five most traded wines by value in 2020 were newly released Champagnes. Furthermore, large formats of Champagne also carry one of the largest premiums among fine wines and as a result, are increasingly in demand," explains Liv-ex co-founder Justin Gibbs.
"Overall, Champagne trade by value is up nearly 60 percent in Q1 2021 compared to 2020, with a significant increase in the number of unique wines trading and the number of unique buyers."
In the 20th Century, the Champenoise focused their efforts on selling an upmarket version of their entry-level cuvée. You climbed the top of a brand ladder, and enjoyed posher plonk. Yet, in a sense, these bottles of expensive fizz are no longer marketed as Champagne. As vehicles for investment, they're too valuable to be sold as celebratory standbys.
The work was well under way before the pandemic started. Down in LVMH land, the owners of Moët & Chandon realized several years ago that selling Dom Pérignon as part of the Mo?t hierarchy was doing the label no favors. So it's now sold and promoted as a wholly separate brand.
"Rare has its own personality that deserves to be managed separately," said Piper's CEO Damien Lafaurie in 2019.
"It will definitely help Rare to build its own reputation; the target consumer for Rare is slightly different from the one targeted by Piper. The very selective places around the world where we want to offer Rare are also different from Piper. Rare will now get the full attention of our distributors in key markets," he added.
But this only partly explains the phenomenon of luxury Champagne being isolated from the industry's ebbs and flows. An emerging tier of lavishly expensive, bling Champagne is arguably making Dom Pérignon and Cristal look dirt cheap.
This approach to marketing Champagne reached its zenith in 2018, when Piper-Heidsieck launched two new limited edition deluxe cuvées – Rare Le Secret High Jewellery and Rare Le Secret Goldsmith. The former was on sale, in magnum, for a mere ￡115,000 ($159,000).
In addition, family-owned Champagne house Edouard Brun launched a limited-edition porcelain bottle costing €8000 ($9500) in 2018. Again, the promotional campaign created as much distance as possible between Brun and this bling, radically expensive Champagne. Luxury marketing, it appears, cannot afford to be "sullied" by comparisons with the parent brands.
However, in 2013 Champagne Louis Roederer arguably laid the initial groundwork for this new breed of bling Champagne, when the house teamed up with luxury designer Philippe di Méo to create a limited-edition Jeroboam design for its prestige cuvée Cristal 2002. Two hundred of these Jeroboams went on sale with a global retail price of ￡18,000 each.
Champagne has long been an object of desire for the rich and famous, however, this growing trend to ramp up the marketing noise signals a clear change of direction. The region is targeting the top 1 percent with bling, and the top 5 percent with Krug vintages.
It's a marketing masterstroke, particularly at a time when the market is becoming aggressively polarized. The bottom end is under a continuing threat from cheaper alternatives, the middle market for vintages ordinaire is (generally) stagnant, while the top end is booming. Fortunately for us, the likes of Bollinger RD and Comtes de Champagne are still a relative bargain.
Bollinger sent me a bottle of the 2007 RD two weeks ago. It's exquisite; lacy fine, and yet packed with the Bollinger vintage trademarks of brioche, butter, and forest floor. I managed to find a bottle online (in the UK) for less than $180. That's not bad, considering Bollinger holds onto its vintage stock for at least seven years.
"The region offers one of the cheapest entry points into the market compared to other fine wine regions," agrees Justin Gibbs. "Based on the average case price of the wines included in the Liv-ex 1000 index, Champagne is one of the most affordable regions."
Of course, affordable is a hopelessly relative term. But, for the well-off, the paradigm has likely shifted. The idea of keeping luxury fizz for birthdays, Christmas and weddings now appears desperately anachronistic.
If anything, Covid-19 has probably accelerated this drive towards living in the moment – what's the point of sitting on luxury wine, waiting for something celebratory to happen? And with the secondary market booming, there's a buck to be made as well.
I've no doubt that for some growers in Champagne, the situation is looking pretty bleak. Total shipments are forecast to continue their downward curve in 2021. But the major houses, armed with their achingly trendy deluxe labels, can scarcely believe their luck.