Brexit Causes Bubbly to Lose Some of its Sparkle in Britain
March 20 2017 - 11:28AM
Dow Jones News
By Saabira Chaudhuri
Brexit is taking some of the fizz out of Britain's Champagne
flutes.
Champagne exports to the U.K. last year dropped 14% in euros and
8.7% in volume after sterling's slide following Britain's vote to
leave the European Union pushed up prices of bubbly, according to
new data from the trade association Comité Interprofessionnel du
Vin de Champagne.
By contrast, Champagne shipments to the U.S.--the drink's
largest export market by value--climbed 4.9% in sales and 6.3% in
volume.
Champagne makers expect the U.S., along with China and India, to
become an increasingly important market, said Jean-Marie Barillère,
co-chairman of the association.
The U.S. is the second-largest market for Champagne exports by
volume, behind the U.K., logging sales of just under 22 million
bottles for EUR540.1 million ($580.3 million) last year. About 31
million bottles were sold in the U.K., for EUR440.4 million.
Per capita shipments of Champagne in the U.S. are well below
those in Europe, leaving Champagne makers convinced there is a long
runway for growth. On average, makers shipped just 0.07 of a bottle
for every American last year, compared with two bottles for every
French citizen, a bottle for every Belgian and half a bottle for
every Briton, the association said.
Now, big Champagne makers are sharpening their focus on the U.S.
market in an attempt to push pricier offerings.
Pernod Ricard SA in November named athlete Usain Bolt the "chief
entertainment officer" for its Champagne brand Maison Mumm, saying
Mr. Bolt's long-term goal would be to make Mumm the country's top
Champagne. Pernod Ricard's Champagne brands accounted for 4.3% of
the global market in 2015, according to Euromonitor, well behind
the 24.4% share claimed by rival LVMH Moët Hennessy Louis Vuitton
SA.
U.S. customers typically are brand-conscious, choosing to buy
more expensive Champagnes than their European counterparts. They
turn to the drink to mark celebratory occasions rather than for
more regular consumption seen in many European markets.
"Champagne is for a celebration day, not for conviviality or
relaxation like the evenings you have in Europe," Mr. Barillère
said. "There's a lot to do there to raise consumption."
Some restaurants and bars across the U.S. are shifting to
serving Champagne in wine glasses rather than flutes, encouraging
people to drink the fizzy wine throughout a meal rather than just
before or after it, according to Jennifer Hall, a representative
for the U.S. Champagne Bureau.
Ariel Arce, owner of the Champagne bar Riddling Widow in New
York's Greenwich Village, said serving Champagne in wine glasses
helps it aerate but also makes it less intimidating.
Ms. Arce keeps costs low at her bar, which fits 16 people,
helping her serve lower-price Champagne, at $75 to $90 a
bottle.
"It's kind of a scary product for the average consumer because
of how expensive it is," Ms. Arce said. "We have small spaces with
very little overheads that strip away glitz and glamour that comes
with a glass of Champagne and focus on how to make it fun."
The French remain the biggest consumers of Champagne but volumes
there declined 2.5% last year as terror attacks in the country kept
tourists at bay, Mr. Barillère said. Belgium, another big market,
saw volumes drop 9.5% on the back of a rise in import taxes.
Overall, Champagne shipments globally dropped 2.1% by volume and
0.6% by value in 2016 from a year earlier.
Write to Saabira Chaudhuri at saabira.chaudhuri@wsj.com
(END) Dow Jones Newswires
March 20, 2017 11:13 ET (15:13 GMT)
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