Jiles's Blog

Who Am I?

17 years spent living and working in Champagne has allowed Jiles to build up a vast amount of knowledge about all things bubbly as well as a very extensive network of contacts, especially amongst the smaller and less well-known champagne makers whose champagnes will probably amaze you with their quality and diversity.

A job as area manager for Asia and Australia with Moët et Chandon was what first drew Jiles to Champagne after completing an MBA in Luxury Brand Management at ESSEC, a prestigious business school just outside Paris.

After nearly 9 years at Moët Jiles moved back to the UK where he started one of the first online businesses promoting and selling grower champagnes,

However the draw of ‘The King of Wines and the Wine of Kings’ once again proved irresistible and another 8 year stay in Champagne was the result. During this second stay in Champagne Jiles worked with the Syndicat Général des Vignerons de Champagne as an accedited consultant for small, independent champagne makers before setting up his own consultancy.

Jiles now spends his time between England and Champagne.and puts his knowledge and contacts to work helping wine lovers everywhere learn more about champagne and helping businesses and individuals to create their own private champagne brand.

He is the author of two books on champagne, several concise guides to champagne  and is the creator of an online champagne study course called My Champagne Expert

 


 

CHAMPAGNE BULLETIN MAY 2023

MMIC logo in colour

 

CHAMPAGNE BULLETIN MAY 2023

 

Changes to labelling regulations

LabelThose of you who are already working with me on a private brand project will have heard me refer to forthcoming changes to legislation regarding labelling in the European Union and I can now give you a few more details.

From December this year additional information, including a list of ingredients, will have to be shown somewhere on the bottles; usually this is on a back label.

To many this new legislation seems very onerous and it has caused much debate in the wine trade with many actors questioning whether consumers actually want or understand this degree information, not to mention the practical issue of finding space on the bottle to display this extra information.

Be that as it may, the legislation is set to come into force from 8th December this year and it cannot be ignored by anyone wanted to sell their product in the EU. However, a few concessions have been made for champagne – more on that below.

The list of new requirements is quite lengthy and may seem rather daunting particularly because precise formulae have been given for calculating the various values to be displayed. A few concessions have been granted for champagne which may alleviate any concerns you may have, but first the list of the extra information as far as it  concerns champagne

List of ingredients in descending order i.e

Grapes

Sugar content, if added

Concentrated grape juice (if added)

liqueur d’expédition

Other additives

Nutritional value

  • Kilocalories and kilojoules per 100 ml
  • Fat content
  • Saturated fatty acids and other elements such as salt content and protein content per 100 ml
  • Energy value in kcal/kJ

There are, however, three factors that mean that there is no need to panic about the new rules:

a) It will be the champagne maker, not the owner of the private brand who will have to carry out the analysis needed to satisfy the new legislation. This is not to say that the brand owner can ignore the new legislation. It simply means that the brand owner should not normally have to carry out the laboratory analysis him or herself. Mind you, the cost incurred by the champagne maker will no doubt be reflected in the sales price to the brand owner.

b) Printers and associated trades, and of course the CIVC, will no doubt be aware of the new legislation and will be able to advise on the finer points of the regulations.

c) The deadline for applying the new rules has been set at 8th December 2023, but the extended ageing time involved in producing champagne has been taken into account so that the regulations will only apply to champagne made after the deadline.

I take this to mean that only champagne bottled after the deadline will be subject to the new rules. In other words, the rules will not apply to any bottles already in the cellars or bottled and put into the cellars before the deadline.

On a lighter note, one champagne commentator has pointed out that the new rules will allow anyone who is interested to calculate the exact number of calories in a bottle or glass of champagne. The answer will vary slightly according to the dosage of the champagne but it’s approximately 72 calories per glass, about the same as a boiled egg, but perhaps more enjoyable!

The price of vineyards in Champagne

Vineyard viewOccasionally clients ask me if it is possible to buy vineyards in Champagne with view to creating a new brand. In theory it is possible although it would not be something I would recommend and if one looks at the annual survey of sales and prices in 2022 the reasons for my hesitation become apparent.

The survey of sales and prices in 2022 shows that the level of activity as well as the prices are on the rise again after a couple of quiet years.

 Vineyard plots do come up for sale every year, but they are usually small in size, and you’d need to acquire several plots in order to constitute an estate big enough to produce any serious number of bottles.

According to the report by an organisation called SAFER, there were 960 transactions in 2022 for a total of 220 hectares sold or roughly 0.6% of the total area of Champagne appellation.

That means that the average size of each plot sold was just 0.3 hectares. If you then assume that the average production per hectare is about 10,000 bottles, that translates to about 3,000 bottles per plot sold in 2022.

What’s more, the plots available for sale could be many kilometres from one another which is not ideal in terms of managing the vines.

Then, and most importantly, comes the very high price.

The least expensive plots sold last year were in the Aisne region of Champagne where the average price per plot sold was just 840,000 euros.

Using the rough calculation above you’d be paying 252,000 euros for a 0.3-hectare plot from which you could produce just 3,000 bottles – that’s 84 euros per bottle before you have done anything!

That’s in the least expensive area of Champagne. For a prime plot in one of the most prestigious areas such as La Côte des Blancs, the average price per plot sold last year was 1,659,000 euros per hectare.

Far better to work with an existing champagne maker who already has a substantial vineyard estate or who can buy in grapes at a far more economic price.

However, that is increasingly easier said than done…

Continuing pressure on supplies

Bottles in the cellarAs many readers will be aware from my recent Champagne Bulletins, two small harvests in 2020 and 2021 followed in 2022 by a far bigger increase in demand than was expected has put huge pressure on stocks of champagne. Many houses are having to choose between, on the one hand, putting all their customers on allocation in order to supply all of them with something or, on the other hand, ranking their customers and ceasing supplies altogether to the ones they consider least important.

This trend shows little sign of ending in the immediate future as has recently been confirmed by the Champagne brokers association, the SPCVC, whose co-president underlined, at their AGM, that the 325.5 million bottles shipped in 2022 was the third highest on record and that pressure on stocks is still running high and made even stronger by the arrival of new players.

What does this mean for private brands?

There are two aspects to the answer, in my view.

First, on the positive side, the demand for champagne and the fact that there are new brands entering the market reflects the strong attraction of champagne both for consumers around the world and for producers / brand owners who see the current market as offering a good opportunity for premium priced brands and robust sales.

On the other hand, there are fewer champagne makers who have any surplus stock to devote to private brands and many of those that do have stock available prefer to focus on promoting and growing sales of their own brand.

The result is that the search for suppliers of private brand champagne is far more complex than it was just two or three years ago. There are still producers who are interested in this type of project, but unsurprisingly, prices are edging up and the producers are more demanding about who they work with and want to assure themselves of the long-term viability of any new private brand projects.

Opportunities still exist; however, it is even more important than ever for anyone considering launching a private brand to present a solid, well-resourced and well-researched project with a clear strategy and a defined target market.

Light at the end of the tunnel

To finish on a positive note, this is the time of year when the wines from the previous harvest undergo a final tasting before blending and bottling and the buzz about the 2022 vintage is very exciting. The quality is said to be outstanding and there is enough volume to replenish stocks and keep pace with global demand.

Having said this, the champagnes based on the 2022 vintage will not be ready to sell until at least 2025 and probably not until a few years after that.

An easing of the supply issue is on the horizon, but more time and patience is needed before we come out of the woods. Now could be a great time to start working on your future brand plans.

I hope you enjoyed this month’s Champagne Bulletin and I’ll see you again next month.

If you'd like to discuss your own project to create a champagne brand, no matter what stage of planning you have reached, just send me an email to This email address is being protected from spambots. You need JavaScript enabled to view it. and we can arrange a meeting on Zoom.

Finally, a reminder that I have 3 domain names for sale

www.growerchampagnes.com

www.the winequiz.com

www.thefizzquiz.com

If you're interested in any or all of these, please send me an email to This email address is being protected from spambots. You need JavaScript enabled to view it.;

All the best

Jiles

CHAMPAGNE BULLETIN MARCH 2023

CHAMPAGNE BULLETIN MARCH 2023

In this month’s Champagne Bulletin we’ll look at just two topics which tend – mistakenly - to be overlooked by many people who are considering creating a private champagne brand:

  • Long-term trends for the wine market and
  • The right time to launch a brand

Both of these should help you to look a little further into the future

Long terms trends for the wine market

Crystal BallIf you are considering creating a private champagne brand, a sound appreciation of the market environment is something you need to familiarise yourself with.

Of course, you need a passion for champagne itself but if your project is to succeed, it is essential to look at the wider business environment and to calmly and realistically assess the chances of your brand achieving the success to which you aspire.

That’s not an easy task in an industry that is subject to so many influences and shifting trends.

The world of alcoholic beverages is nothing if not dynamic: new product categories, new consumer groups and new geographic markets constantly evolve to oblige drinks producers to revise their focus and sometimes even completely to change their strategy.

For example, the explosion of interest in gin that led to the opening of hundreds of artisan gin distilleries is now cooling off as many gin distilleries cease operations and as attention seems to be moving towards rum and vodka.

The seemingly limitless profits to be made from selling wine and spirits into China led, just a few years ago, to a rush by drinks companies to capitalise on that potential. Whilst significant opportunities still exist, the enthusiasm has been dampened by the Chinese government’s restrictions on luxury entertaining.

What’s needed to see clearly through all these variables are sources of reliable and detailed information about the state of the market both now and in the future.

IWSR

Fortunately, publications such as the International Wines and Spirits Record (IWSR) provide us with exactly the sort of information we need.

You can find many of these reports at  https://www.theiwsr.com/news-comment/

but the one we’ll focus on today is called

Key trends for wine in 2023 and beyond

Some of the stand-out phrases in the report don’t make very encouraging reading for anyone involved:

 

  • wine is a category in slow decline and there are few signs of this changing imminently
  • Fewer people are drinking less wine every year
  • the long-term trend of slowly-declining volumes in many markets expected to continue.

but read further and you’ll find that these headlines hide a much more nuanced reality and that good opportunities still exist for champagne.

Sparkling wine set to buck the trend

On first reading the report  may lead you to conclude that now is just not the right time to consider launching a new wine brand into the market, but the report also highlights some anomalies to the general downward trend for wine

Sparkling wine also came out of the pandemic stronger than it went in. The lack of big, formal celebratory occasions led to Prosecco and Champagne, in particular, being drunk more informally at home, and consumers have reassessed their attitude to the category as a result.

Of course, there are regional variations:

In the US and Canada, for example, sparkling wine is much more likely to be seen as suitable for informal consumption at home than it was pre-2020

Furthermore and, as we have discussed in the Champagne Bulletins over the past year, there is noticeable drive towards high-end products and in particular towards premium champagne.

Premium wines are performing significantly better than their lower-priced counterparts and this should continue over the coming years. Premiumisation may be most evident in the sparkling sector, where premium wines are showing strong growth, but it is also true for still wines, albeit at reduced levels.

Despite the headwinds facing many sectors of the wine industry, Champagne would appear to offer something of a safe haven which goes a long way to explain the flurry of acquisitions we’ve seen in the past year or so (and which we’ve covered in previous Champagne Bulletins) of small to medium size champagne houses by large international groups which still see attractive opportunities ahead for premium champagne.

When to launch?

Pitching

There are many factors to consider and a helpful way to approach them is to look at two sides of the equation: supply and demand

On the supply side, stocks in Champagne are still very tight. Many houses have introduced an allocation system in an attempt to partially satisfy all existing customers; the idea being that no single customer gets as much as they would like, but they all get something.

A more drastic approach, which was a dilemma I experienced personally a few years ago, is to cease supplying some customers entirely. As you can imagine, this strategy created some very unhappy customers, and you have to have huge confidence in the power of your brand to tempt even these offended customers to order again at some time in future when stocks are available again.

With stocks under so much pressure in Champagne and lead times being very extended at the moment, it is unrealistic to think in terms of a new brand being ready to launch by the end of this year unless you are already well advanced in the brand creation process.

Even if you have already made good progress, do think of securing your future orders by paying a deposit now.

The stock situation will not significantly improve until 2025 at the earliest when the wines from the 2022 harvest start to become available and even that depends on this year’s harvest being of a reasonable size.

On the demand size, do bear in mind that many importers and distributors decide in Spring on the range that will carry at the end of the year, so the first quarter of the year is the time to be pitching your new brand concept to the trade.

To discuss your current or future plans for a champagne brand, please email me at This email address is being protected from spambots. You need JavaScript enabled to view it.

All the best

CHAMPAGNE BULLETIN FEBRUARY 2023

CHAMPAGNE BULLETIN FEBRUARY 2023

SUPPLY CHAIN WOES

BottlesThe disruption to supply chains caused primarily by government policies in recent years in response to energy and health-related issues, is not showing any sign of improvement, if anything the situation is getting worse.

The latest problems relate to the supply of glass bottles which are a fundamental requirement for wine makers all over the world and France is no exception.

The issue is at the forefront of winemakers’ minds at the moment because this is the time of year when many wine makers are bottling the wine from the 2022 vintage.

According to a report in The Drinks Business, the problem started when many furnaces were forced to reduce production levels during the CVD episode. Today the problem is different but no less severe. It is caused by rocketing energy prices which, according to the report, have gone up by as much as four times over the past couple of years with the result that glass makers have again scaled back production.

Some bottles are no longer being made and others are in very short supply- clear glass for example.

For some types of wine there are alternatives such as cans and, in some cases, paper cartons, but these options are not possible for champagne because of the pressure that the bottles need to withstand and also because of the prestige presentation that consumers expect from a bottle of champagne.

It is not yet clear when and how these supply constraints will ease but ease they must if supply is to keep up with the buoyant demand from around the world.

SUPPLY AND DEMAND IN CHAMPAGNE

The principles of supply and demand are well-known and widely accepted: roughly speaking if supply goes up and demand remains stable, the price will fall. Conversely, if demand goes up and supply remains the same, the price must increase.

To put today’s situation into context it’s interesting to take a look at some data about how these two parameters have evolved in Champagne over the past half century or so. First let’s examine the supply as represented by the area planted with vines in the Appellation Champagne.

According to statistics from the Comité Champagne, back in the 1950s there were only some 12,000 hectares planted with vines. For the next 60 years or so the area under vine has been on a constant and rapid upward trend reaching 30,000 + hectares around 2010: an increase of almost three times.

Since 2010 there has been very little change because we are almost at the limit of the total 34,200 hectares authorised in the appellation - a total which is more theoretical than attainable since there are always a significant number of hectares lying fallow for a year or two to allow the soil to recover after old vines have been uprooted.

Area Planted in AOC

In this context one might expect the price of champagne to have fallen in the same proportion as the increase in supply, but other factors are at play; although the area under cultivation has increased, the yield in terms of the quantity of grapes harvested ( called the rendement) has not followed the same pattern.

As the chart below shows, there was approximately a threefold increase in the rendement between 1950 and about 2010, but from then to the present day the rendement has decreased.

The brown line shows the yield each year and the black line shows the 10 year average

 

Rendement

The recent decrease is due to a number of factors amongst which are an awareness that preserving the health of the soil is not compatible with ever-increasing yields, and a greater focus on the quality of the grapes rather than solely on the quantity. These considerations have led to a deliberate reduction in the amount of fertilizer used resulting in fewer grapes per square metre and a reduced weight per bunch.

This then, is a second factor at play in the supply side of the equation. Let’s now look at demand.

In this chart you can’t see the exact numbers involved but the inexorable increase in sales is obvious despite the occasional blip along the way. (source: Comité Champagne)

 

Champagne shipments

Sales in 1947 were just 21.5 million bottles

By 1956 they had more than doubled to 44 million

By 1967 they had doubled again to 93 million bottles and from then on things really took off

100 million bottles by 1970

200 million bottles in 1986

300 million in 1999 and since then sales have settled at around 310 million bottles + in years that are not disrupted by one crisis or another.

I’ll leave you to do the maths, but that’s a pretty impressive percentage increase – far greater than the increase in supply -  and it’s fairly constant over the long-term making champagne a very attractive business to be in.

To summarise, demand has more than kept pace with the increase in supply and over the past two years the strength of that demand has increased yet again with the inevitable result that prices are firming up considerably as is evidenced by the fact that the total ex cellars value of sales exceeded 6 billion euros for the first time in 2022 – of course, at consumer level the figure is much higher still.

Added to this is the fact that the area of the Appellation Champagne is limited and even if a decision is taken one day to increase the area, that increase is unlikely to be very substantial, so the argument for higher prices for champagne continues to look very persuasive.

WHAT OF THE FUTURE?

Champagne drinkingExport sales are the driving force behind the increase in demand for champagne in recent years.

It was the case for many years that the French drank more champagne per year than the rest of the world put together – exports accounted for less than half total sales.

That situation reversed about a decade ago and since then a combination of factors has made the divide between domestic sales in France and exports all the more significant.

An increasing concern about alcohol abuse led to severe restrictions in France on advertising and promoting alcohol, and a decline in young people drinking wine has also had an impact.

Many voices complained that champagne has an old-fashioned image and was consumed mainly by older people. Whilst this may still be true statistically, a number of initiatives have been put in place to make champagne a drink to be enjoyed by a much wider audience both geographically and in terms of age group.

This, coupled with  the increasing prosperity in many developing countries and the rise of a middle class with discretionary income and a desire to enjoy what they perceive as some of the luxuries of life, is what is driving the boom in export sales.

The first shipment figures for 2023 only confirm this trend. For the 12 month period up to January 2023 sales were buoyant at 327 million bottles with the majority of these being in export markets whilst in France sales were down 2% versus last year.

Looked at overall, the champagne story today seems to be repeating what has occurred over the past 70 years. It’s a story of inexorable growth punctuated by repeated crises which only goes to demonstrate the extraordinary resilience and appeal of champagne.

That's a thought worth raising a glass to - champagne of course.

Until next month

CHAMPAGNE BULLETIN JANUARY 2023

CHAMPAGNE BULLETIN JANUARY 2023

Welcome to the first Champagne Bulletin of 2023.

It probably won’t come as any surprise that January has been a relatively quiet month in Champagne, but nevertheless they are a couple of stories that have attracted considerable attention.

Rules and Regulations

CIVC PlaqueThose of you have already had a discussion with me about your champagne brand project will have heard me say that the rules and regulations surrounding champagne are much more strict than you might imagine.

For example, you can’t add any flavourings or colourings to champagne and that’s just one of many rules that have to be adhered to during grape growing, wine making and labelling. If they are not, then the wine cannot be called champagne, but there are sometimes more severe penalties as one unfortunate (or perhaps it would be more accurate to say, unwise) champagne maker found out recently to his extreme detriment.

Frederic Gallois and his family have been tending vines and making champagne for many generations in a village in one of the more remote parts of the Champagne region. Perhaps M. Gallois thought that his out-of-the-way location would mean that he would be safe from the occasional inspection by the authorities. If so, he has recently been proved very wrong.

The suspicions of the authorities were aroused when it came to light that M. Gallois was harvesting grapes in his vineyards outside the dates that are officially permitted each year. This, in itself, could well have incurred a penalty, but things soon became worse – a lot worse

On closer inspection, it was found that some of M. Gallois’s vines were producing more than the permitted yield. It was then discovered that some of M. Gallois vineyards had been planted with varieties that are not permitted in the AOC Champagne. (Appellation d’Origine Controllée)

So M. Gallois faced charges on at least three counts:

Harvesting outside the officially designated dates

Planting grapes varieties not permitted in Champagne which led automatically to a third charge of

Producing and selling wine that did not confirm to the rules of champagne and deceptively passing off this product to consumers as genuine champagne.

The severity with which the authorities view this sort of breach of the rules is reflected in the penalty imposed. The fine of €12,000 was relatively minor; a far more ruinous punishment was the confiscation of some 100,000 bottles from the cellars of M Gallois. These bottles had a reported value of some 2 million euros.

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A shift in market dynamics

Kylie Minoghue winesIn other news, Kylie Minogue, whose range of still wines and Prosecco is enjoying spectacular success, has suggested that she would be interested in launching a champagne brand., however this may be easier said than done, in the short term at least, due to the constraints in supply at the moment.

You will have read in recent bulletins that supplies of champagne are extremely tight at the moment. In consequence all champagne makers are wary of taking on new clients and new projects.

The dynamics of the market have shifted significantly over the past two or three years and we have gone from a situation in which champagne houses were keen to accept new clients to the opposite situation in which new clients need to put forward a proposal that offers real benefits to the champagne maker apart from just more volume. This could be the chance to enter markets in which the champagne maker is not currently represented, the chance to reach a new type of consumer, or the chance to be associated with a high-profile personality whose image fits the champagne house’s marketing objectives.

In Kylie Minoghue’s case this should not be a problem, but even so the quantity of bottles available may be somewhat limited for the next year or two until the wines from the 2022 harvest start to become available for sale.

Champagne shipments in 2022

  To put the demand /  supply situation into clearer focus, it has just been announced that the total number of bottles shipped in 2022 ( to France and to export markets) reached 326 million bottles. That’s the second highest figure ever behind only the 338 million bottles shipped in 2007.

In terms of value, the record so far was achieved in 2021 when the total value of shipments was 5.7 billion euros. The precise figure for 2022 has not yet been released but in all likelihood, it will exceed 6 billion euros for the first time

Premiumisation is the name of the game

JacquessonThe combination of strong demand for champagne and the limited supply makes for a classic Sellers’ Market and the prospect of significant profits to be made. This has not escaped the attention of many of the largest names in the world of wine.

In a move that underlines the interest in Champagne shown by major international drinks companies over the past three or four years, Artemis Domaines, a group controlled by the Pinault family which also owns prestige brands from Bordeaux, Burgundy, Napa Valley, has acquired Champagne Jacquesson, a highly respected and mid-sized producer based in Dizy. This adds to the associated Artemis Domaines already enjoys with Champagne Henriot.

This is yet another piece of evidence that demonstrates the shift, over the past few years, towards the ‘premiumisation’ of champagne which one imagines will lead to higher prices for brands that succeed in creating a premium image and, one only can assume, greater profits for the owners of those brands.

Method in my madness (to C or not to c?)

Finally, some of you may be wondering why I sometimes spell Champagne with a capital ‘C’ and sometimes with a lower case ‘c’. My choice of spelling may seem random but there is some logic to it, at least in my eyes.

Always spelling Champagne with a capital ‘C’ does not take into account the fact that there are two separate ways of referring to the word in French: La champagne means the geographic region of Champagne, whilst Le champagne refers to the sparkling wine made in Champagne.

Since Le and La are not used in English, the only way I can find of differentiating between the two uses of the word is to use a capital ‘C’ for the region and a small ‘c’ for the wine.

I hope this explanation lends some method to my madness, but I am certainly not saying that my method is correct. Feel free to do whatever you want.

Until next month...

CHAMPAGNE BULLETTIN NOVEMBER 2022

CHAMPAGNE BULLETIN NOVEMBER 2022

 

Supply and demand

Steps to LB cellarsIn previous Champagne Bulletins, I’ve often touched on the fact that stocks in Champagne are running low because of two consecutive small harvests in 2020 and 2021 followed by a large and unexpected increase in sales of champagne as many aspects of life returned to normal at the end of that pandemic.

The latest shipment data from the CIVC show just how strong the rebound in sales has been.

The moving annual total for shipments in the 12-month period from 1st October 2021 to 30 September 2022 shows a total of 336.5 million bottles shipped.

Contrast this with the figure of just under 300 million per year at the start of the pandemic and with the figure of just 250 million bottles at the low point during the pandemic and you have a good idea of how much sales have taken off recently.

Finally, it’s worth noting that the record from annual shipments stands at 338.7 million which was set in 2007, so we’re well on track to exceed even that within the next few months.

This situation has led to a lot of speculation that there will inevitably be shortages of champagne this Christmas and New Year.

Philippe SchausTo add fuel to this fire, in a recent interview, Philippe Schaus,  the head of Moët Hennessy – the wines and spirits branch of LVMH, the world’s largest luxury brands group - confirmed that he expects just the kind of shortages that have been feared.

Photo credit © Jean-François Robert

Before you rush out right now to buy every bottle you can find, let’s look at the situation more closely.

Yes., it’s true that stocks are under pressure, and it will be a couple of years before stocks are significantly replenished when the wines from the 2022 harvest become available for sale. However, the effects may not be felt in the same way across all segments of the champagne market.

What tends to happen when supply is constrained whilst demand remains high is that prices go up and this is what can already be seen playing out.

One producer I work with has just raised prices for the third time this year and whilst the underlying cause of the increases has been rising prices in raw materials, the effect is to dampen sales which sooner or later will help to ease the pressure on stocks. In this sense the market acts as a self-regulating system as it always does.

This is reassuring in the mid- to long-term, but not in the next few months. Therefore, in the immediate future what we will probably see are fewer and less-generous discount offers over Christmas and the New Year, especially on non-vintage champagnes where the demand over the holiday season is the most intense. Paradoxically, it may be that higher priced cuvées are easier to find with the exception of the very best-known brands which are often subject to supply limitations in normal circumstances.

Aim high

For anyone looking to create a private brand, all this disruption may have a number of impacts.

It’s likely that over the next few months it will be harder to find suppliers willing to accept new projects, particularly if the projected number of bottles is significant and the target buying price is on the low side.

This trend, coupled with rising prices will put additional pressure of the profit margins of any new brand targeting a mid-to-low-end retail price point. However, this segment of the market has always been the most competitive and the most difficult to penetrate, so now more than ever, it makes sense for any new brand to shoot for a more luxury positioning that offers the potential for more viable profit margins.

This interpretation of the state of the market is borne out in a recent study of the global market for luxury brands carried out by Bain & Company.

According to the study, by 2030 there should be an additional 100 million consumers joining the ranks of luxury brand buyers. Foremost amongst these new consumers will be young people born in the early 1980s ( Generation Y) and those born around the turn of the century ( Gen Z )

Know your customers

Wine IntelligenceWhenever I work with a new client on a private brand, one of the first questions I ask is “ Who are your target customers?”

In my view this is an absolutely fundamental question that influences almost every other aspect of the brand image and positioning and consequently is a determining factor in the success of any new brand.  The more you understand your customers, the better you can respond to their expectations and the greater your brand’s chances of success.

That’s why a recent report by Wine Intelligence into the expectations of younger wine drinkers is particularly interesting. The study addressed only the U.K. market, but I think it’s reasonable to extrapolate the findings into other markets

You can read more in this article in The Drinks Business

https://www.thedrinksbusiness.com/2022/11/this-is-what-the-younger-generation-wants-from-wine/

but the key points are:

A. Boomers (55+) and Gen X (40-54)

  • Boomers and Gen X remain the key targets for the wine industry because wine drinking is a solid habit and wine dominates their alcohol repertoire.
  • These two groups account for 73% of the wine drinking population and 66% of total spend in off-premise.
  • Their wine-drinking focus is on the informal and functional (taste, food matching, relaxation).
  • They have routine purchase-patterns at entry and mid-price points.
  • Gen X (40-54) are more willing than boomers to trade up in the off premise, they are more involved drinkers, and they still seeking novelty.

B. LDA Gen Z (18-24) and Millennials (25-39)

  • LDA Gen Z and Millennials are the key targets in the on-premise and for premium and super premium wines.
  • Both generations account for only 26% of the regular wine drinking population but for around 50% of the total spend in bars, pubs and restaurants.
  • For both of these cohorts, wine carries social values, prompting curiosity, involvement and higher spend levels.
  • LDA Gen Z tend to be price sensitive though are willing to trade up for social occasions. They also show specific interest for sweeter styles of wines, rosé and sparkling.

For those doing business in the USA or Canada, Wine Intelligence publish specific reports into the latest wine trends. Find out more here:

https://www.wineintelligence.com/what-we-do/wine-consumer-observatories-2022/

New product launch

On the subject of luxury brands, one new brand of champagne has recently caught the eye.

It’s called Cuvée Karma 2016 and has been produced by Champagne Victor and Charles whose owner claims to have produced the most beautiful bottle in the world.

Cuvee Karma

The bottle certainly looks extremely elegant, and a real diamond is embedded into the logo displayed on each bottle which partly explains the retail price of €575

The wine itself does not lay claim to be of any exceptional quality, but if rarity (only 1,000 bottles available at the moment) and visual impact are anything to go by, then Cuvée Karma should be a success.

The cost of producing a bottle like this one is clearly on the high side – even very high, and so the initial investment would have been considerable, but as we touched on above, the potential return on a luxury brand such as this is also high. With a potential turnover of €575,000 there should be ample room to cover all the development costs plus quite a bit to spare.

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That brings me to the end of the last Champagne Bulletin for 2022.

I’ll see you again in 2023 with more news and views from Champagne and in the meantime, I wish you a very Merry Christmas and a wonderful New Year with plenty of sparkle.