New president of the Union des Maisons de Champagne (UMC) Jean-Marie Barillère says that export markets like the UK are “not where growth will be found tomorrow and the houses must anticipate this change by investing in distant markets, especially in America and Asia. It is a long-term job, requiring considerable human and financial resources,” he says.
Speaking as he takes over from Ghislain de Montgolfier, with whom he has worked as UMC vice-president since 2007, Barillère says : « In terms of markets, Champagne must undergo a profound transformation. France, England, Germany and Europe in general, which accounted for 80% of champagne shipments in the past, are not tomorrow’s growth markets.”
“In 2013 and the following years the challenges are well known. We must adapt to changing circumstances revising the Champagne model to create more value. Champagne has had several decades of growth but mainly in volume terms, while there has been little increase in value. This growth model cannot be pursued any longer because of the appellation rules, production and yield restrictions [the currently defined vineyard area is more than 95% planted]. We cannot double the production of grapes in the next twenty years.”
“Champagne must adopt another growth model, one based on creating value. Easy to say but hard to achieve as such a policy requires lots of different skills. Fortunately in Champagne we have the people with exactly the right skill set in our ‘grandes maisons’.
Barillère has given up his position in charge of Moët Hennessy Champagne Services, the administrative arm of Champagne’s largest player that buys grapes for all the groups’ brands, to « separate the two functions in the interests of transparency », but his views that priority markets are outside Europe reflect those of Moët Hennessy’s managers.
The detailed year-end figures from the Comité Interprofessionnel du vin de Champagne (CIVC) show that in 2012 countries outside Europe accounted for 19.74% (60.95m bottles) of total champagne shipments, the highest level since 2007 when they took 17.5% of shipments (59.44m bottles). The most important market outside Europe remains the USA. Although shipments there fell 8.7% in 2012 to 17.69m bottles, value of just over €371m gives an average bottle price of €20.98, the highest among the top ten. The only top ten export markets in growth are Japan, up 13.8% to 9.06m bottles and Australia which rose by a hardly less impressive 11.2% to 5.4m bottles.
Shipments to Japan have risen over two and a half times over the past ten years while value has risen in the same period from €80.74m to €173.64m less than €15m behind Germany, although 3.5m more bottles were shipped there in 2012. After the USA, Japan and Italy remain the two top ten markets with the highest average bottle price at €19.16 and €19.11 respectively, but volume in Italy fell back 18.4% to 6.25m bottles in 2012.
Growth in the Chinese market where shipments rose 19.4% in 2011 accelerated jumping 51.8% to cross the 2m bottle mark, although the average price at €13.85 is lower than the price in the UK which is €14.5 a bottle. India rose 20% to 348,358 bottles, while Russia grew by 10.3% to 1.48m bottles, but Brazilian shipments dropped slightly by 6.7% to 980,378 bottles.