What retail price is right for your Private Champagne Brand?

It’s a question that’s really important for anyone considering creating their own brand of champagne and I wish that there was a simple formula that allowed you to come up with the right answer every time, but there isn’t, so let’s consider some retail price in the U.K. and see what pointers they might give us.

These prices are not directly comparable to prices in other markets but the positioning relatively to one another is relevant, as are the price categories that emerge.

In my view, there are, broadly speaking, 4 price bands

image. The Drinks Business

Below £25

These prices can only be found in large supermarket chains who are selling their own brand.

The supermarkets can achieve these prices because they place very large orders and can command the lowest possible cost prices; they operate on very thin profit margins; they spend little or nothing on marketing because they have a ready-made distribution network and in addition to all those advantages, they often run price promotions on their own brand champagne as a loss leader to attract customers to their stores.

The quality of these champagnes is often high, and the wines appeal not just to consumers who know very little about champagne and buy on price alone, but also to more knowledgeable drinkers who are looking for a great deal.

1) £35-£50

These are what I would call ‘Accessible brands’ or ‘Challenger brands’

You find many of the best-selling and best-known brands in this category together with some brands that have an established history but are less well recognised by the majority of champagne drinkers.

The marketing investment behind these brands is often considerable with a consequent impact on profit margins, however, the bulk of sales are made in this  category and thus profits can also be significant.

These brands appeal to champagne drinkers who base their buying decision primarily on brand name recognition rather than any deeper knowledge of champagne and also to those with a little more experience of champagne who are open to trying new brands, but within reasonable budgetary constraints.

These are brands that can be served with confidence at any celebration without the risk of being seen as ‘cheap’ by serving a supermarket brand.

2) £60 - £90

In this category we find special cuvées and vintage champagnes for more discerning drinkers.

Some of these consumers have a genuinely deep appreciation of champagne and take pleasure in the finer details of the brand story and in the undoubtedly high quality of the champagne. Others choose the brand because it is less well known and will invite comment, thus presenting an opportunity to reveal their wine knowledge.

Usually, the sales volumes are significantly lower than less expensive brands and profit margins higher.

3) £100 > as high as you like

 Ultra-premium brands whose prices have no real reference point and cannot be rationalised logically which is the classic characteristic of a luxury brand.

Celebrity brands are often found in this category.

Profit margins are extremely high because of the diminishing returns in terms of the quality/price relationship: twice the price does not mean twice the quality or twice the cost of production.

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This attempt to categorise different types of champagne is a generalisation and the market conditions as well as the rate of tax and the structural costs of doing business vary from country to country, so the exact prices do not exactly translate to all markets.

Having said this, a rule of thumb that has traditionally been used as a guideline in the USA is that the retail price is between 3 and 4 times the cost price in France. This takes into account the margin requirements of importers, distributors and retailers at each stage of the chain, but the real factors determining where you set your retail price are much more complex and include

• the price of competing brands already in the market
• the expectations of the consumers you are targeting
• the distinctive features of your own brand and of course
• the cost price and the projected profit margins of your brand

For a more in-depth exploration of this topic and anything else relating to creating your own private champagne brand, email me at This email address is being protected from spambots. You need JavaScript enabled to view it.