Monday, December 6, 2010

Rant: Champagne is Elitist

It is very difficult to find a good bottle of Champagne for less than about $30, especially in comparison to equally priced sparkling wines, such as Cava and Prosecco from other regions around the world.  We cannot forget either the good values you can find in American sparkling wines, from California to Arizona to Massachusetts. 

As such, Champagne is more of a wine you drink only on special occasions, and not an everyday beverage.  Few can, or are willing, to pay $30+ every day for a bottle of wine.  So it is more of an elitist wine, and some of the marketing for Champagne only enhances that elite image.  If the Champagne region were to drop their prices, to produce more reasonably priced, quality wines, then more people would be likely to purchase it.  It could become more of a mainstream product, and not something revered more by the well-to-do.

Sure, the Champagne region is relatively small, consisting of about 33,500 hectares of vineyards. Compare that to the Bordeaux which is almost four times larger with over 120,000 hectares.  France is trying to address this matter, through proposed plans to add more territories to the Champagne AOC but that will not happen, if at all, until at least 2016.  So, the extra Champagne, approximately 50 million bottles, would not start being available until about 2021. 

Obtaining statistics on Champagne production and exportation is not always easy to find, and usually seems to run a bit behind.  In 2008, France produced about 322,453,852 bottles of Champagne (less than 27 million cases), approximately 5% less than in 2007.  France consumed about 181,209,546 of those bottles (more than half of the production) and exported about 141,244,306, a more than 6% decrease from 2007.  Champagne exports had hit a high in 2007, but that was primarily due to wealthy consumers in Asia and Russia. Interestingly, the only market in 2007 which decreased was the 

In 2007, the U.S. imported about 21,722,220 bottles of Champagne (less than 2 million cases), more than 6% less than the year before. 2008 saw another decrease, over 20%, down to 17,193,526 bottles.  It is also interesting to compare U.S. consumption of other sparkling wines as compared to Champagne.  In 2008, Americans consumed 98,736,000 bottles of domestic sparkling wine, over five times as much as Champagne.  Plus, they consumed over 45,000,000 bottles of sparkling wine from other countries.  So, Champagne constitited less than 12% of the sparkling wine consumed in the U.S.

2009 saw little relief for the Champagne region.  Exports dropped by about 30% as compared to 2008, and this did lead to a drop in Champagne prices, as the industry tried to rebound.  The harsh economic times have struck hard at Champagne, with many people seeking less expensive options.  It is the wealthy in Asia, Russia and elsewhere which have still been able to continue purchasing their Champagne, continuing the elitist image of Champagne.

With Champagne, much of the price is due to factors above and beyond the cost of producing it. Heavy marketing costs, its elite reputation, and likely plain greed.  It has been priced out of the range of the every day consumer, except for special occasions. This means that in economic downturns, Champagne is going to have significant problems with substantial decreases in consumption.  Such luxury items always take a hit. 

Champagne certainly could make more affordable Champagnes if they so desired. By not doing so, they do lose the opportunity to compete in the market at the under $30 level. Just consider that in the U.S., almost 9 out of 10 sparkling wines consumed are NOT Champagne.  But, it does not seem likely that the Champagne region will do anything to reduce pricing, except when absolutely necessary during economic downturns. So, Champagne will retain its elitist image and the average person will buy many other sparkling wines, saving Champagne for a handful of occasions each year.

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