Collapsing Bubbles

Regarding the apparent problems the French Champagne houses are having this year, I feel like I've done my fair share.
Though domestic sparkling wine producers will be happier with my efforts, I do currently have a decent number of recently purchased bottles of Champagne. The point is that I'm not to blame for the woes afflicting Reims and its surroundings.

So now that my culpability is out of the way, I need to turn to something in this article that surprised me:

"At least 83 per
cent of champagne is sold and consumed in a 600-mile radius around
Reims, the Champagne capital. “There’s still a lot of potential for
growth further afield,” said Mr Lorson."

Mr. Lorson is a spokesperson for the official Champagne trade group. He'd know these things. Can it possibly be true that at maximum only 17% of all Champagne produced actually leaves the France? Last year 338 million bottles of Champagne were produced. That means that 294 million bottles were consumed within a 600 mile radius of the place and at maximum 57 million bottles were exported. That's approximately 4.7 million 12 bottle cases.

Lorson says that despite the "collapse" in Champagne sales, there is room for growth. I suspect that sales of Champagne will be down significantly for the last 3 months of 2008 and for all of the coming 2009. So what can the Champagne houses do?

Well first of all, they need to get on their knees, form a circle around the town of Reims, and bow down in prayer and reverence for the support they get from those who live around them. After that, they know exactly what to do: Lower their prices.

Veuve Cliquot NV Brut, for example, costs between $30 and $50 a bottle, depending on the hopefulness of the various retailers across the country. This is silly. It's nice Champagne, but it's not THAT much better than Roederer Estate, now is it?

18 Responses

  1. KenPayton - December 27, 2008

    How I envy the British, the world’s most rabid champagne drinkers! They simply hop in the car, pass through the Chunnel and in hours can fill the ‘boot’ with all the bubbly their axels can bear. (I presume the 600 mile radius would include London. From London to Reims is only 272 miles.)
    And I am doing my part!

  2. Alice Feiring - December 27, 2008

    Hey Tom, One of the more outrageous quotes from a marketing director when talking about their desire to grow the export market. (I’m paraphrasing him) The French will have to drink something else. The champagne shortage is a great opportunity for the French to discover the bubbles from the other regions, because we need more of our brand for Russia and China.
    And here’s a shocker, especially coming from me. Roederer Estate is much better than Clicquot.
    Happy New Year to you.

  3. Francisco - December 27, 2008

    Wishing you the very best for starting 09, my friend. Ah, the fizz.It would really be something if the vat-produced Champagne folks actually lowered prices or did something, anything differently. A lot of that stuff tastes the same to me, I’m almost ashamed to say. Depressing that the $39, $59 and $79 stuff is practically the same to me. Of course, supermodels, Russian oligarchs and the like would probably smirk at my favorite small-farmed family bubblies made by humans.

  4. genevelyn - December 28, 2008

    No contest– I’d rather have Roederer Estate. Veuve Cliquot tastes like a fizzy Mallow Bar

  5. Joe Dressner - December 29, 2008

    Why would you be proud you hurt Champagne sales? Lousy Champagne is lousy Champagne. Who is around in California that can compare to Selosse, Larmandier-Bernier, Cedric Bouchard or Collin to name but a few? Maybe there is a problem of terroir? Oh, I forget, you think there is no such thing as terroir because Veuve Cliquot claims they have terroir. Do you believe there is no such thing as fiction because pulp writers claim they are writing fiction. There is just so much nonsense on this blog!
    I finally took a look at your Specialty Retailer’s system. As an importer and distributor I am shocked. Frankly, I’m against all regulation by the government that makes the consumer obligated to buy through the three-tier system. I’m also against a two-tier system….that is you are lobbying for the retailer, a form of two tier marketing. But why shouldn’t the domestic and international producers sell direct to the consumer. With the internet, there is no useful function for the retailer as a necessary intermediary. All the arguments you make against wholesalers work equally well against the retail tier.
    Of course, there are some side problems, like the consumer in California who doesn’t want to ship from the East Coast during the winter. Or the East Coast consumer who doesn’t want to ship during the West Coast summer, etc. There is also the minutae of having a Châteuneuf producer ship three bottles to a consumer in Minneapolis and having it go through customs in a post 9/11 customs environment.
    But why aren’t you lobbying for the truly direct?

  6. Tom Wark - December 29, 2008

    If you read a little closer you’ll see that what I said was that I’ve done my fair share o HELP THE CHAMPAGNE PRODUCERS.
    Finally, what SWRA is working for is not a FORCED two tier system, but the realization of the option for consumers to buy direct from Retailers.

  7. Nick Oakley - December 29, 2008

    Hey Tom,
    I’m new to this site – excellent reading. Just a note about the 600 miles from Reims thing – it’s a fairly large circle and includes all of southern UK, including London, all of Belgium and Holland, and almost all of Germany. Count in Switzerland and Austria too, and Italy as far south as Rome (so Milan’s in there) and even Barcelona in northern Spain. Dublin also if you stretch the tape measure! Now the figures quoted begin to make sense.
    Keep up the excellent work
    Nick Oakley, in the UK

  8. Morton Leslie - December 29, 2008

    Champagne production has been ramping up volume for “new” markets like many luxury goods. I believe quoted Champagne “production” is the amount of bottles taken out of tirage and shipped and that number is considerably less than the amount of Champagne currently being put into tirage on an annual basis. So, the situation may be more severe than a 23% shortfall.
    A professor of mine, who should have known, told me once that Champagne sales did not suffer much during the great depression. People were willing to spring for a bottle for a a little celebration even when they were hurting and cutting back on big purchases. But there were no cheaper alternatives then. There are now.
    For industry members wanting to celebrate the end of 2008 check out the generous interwinery discount on magnums at Mumm Napa Valley.

  9. Dylan - December 29, 2008

    Nick, thanks for putting the radius into greater perspective. Still, I would think there would be more being exported than the current number.

  10. Joe Dressner - December 29, 2008

    You need to learn how to write. You write:
    Regarding the apparent problems the French Champagne houses are having this year, I feel like I’ve done my fair share.
    What you are saying is that you’ve done your fair share in causing problems for the French Champagne houses. If you meant something else, you should get someone to edit your postings so that they read correctly.
    What you don’t do is answer my criticism. Why support a two-tier system, other than the fact that you are being paid by retailers, why not support direct sales from the producer to the consumer?
    Would you please answer that question?

  11. Tom Wark - December 29, 2008

    There’s no question about it. I need an editor.
    As for what I support, I personally support a system of wine distribution that allow producers, retailers, restaurants, and wholesalers to be as creative and innovated as they needed to be without govt. mandates.
    As for SWRA, I advocate on behalf of retailers to be able to ship direct. That’s it. Not tear down the three tier system. Not destroy wholesalers. Simply change the system. Now it so happens, I believe, that direct shipment from retailers to consumers is good for consumers.
    Did that answer your question.

  12. Joe Dressner - December 30, 2008

    No, it did not.
    Why don’t you advocate producer to consumer sales, other than you get fees from retailers for the SWRA you are involved with? Wouldn’t that make more sense.
    My general view of wine distribution is that people who serve a useful role, be they distributors, importers or pr flaks will continue to find a niche. Outmoded legislation which protects ineffective distribution practices will eventually disappear.
    But why should consumers have to buy highly scored wines from retailers? What does the retailer bring to the equation? Why can’t they just buy directly from the producer? Why aren’t you lobbying for that?

  13. Tom Wark - December 30, 2008

    I couldn’t agree with you more regarding consumers being able to purchase wine from the source of their choice. I figured that was implied by this statement:
    “I personally support a system of wine distribution that allow producers, retailers, restaurants, and wholesalers to be as creative and innovated as they needed to be without govt. mandates.”
    That said, I spent a long time writing about and arguing for open winery to consumer shipping. Read through this blog. Talk to others who have been involved in the direct shipping issue since the early 1990s.
    Right now, the biggest problem consumers have is that they are forced to buy wine from the selection that wholesalers bring into the state. And even in those states where winery to consumer shipping is allowed, often times the wines they want are no longer available from the winery, nor are they available in local retail outlets. However, they are available at retailers in other states. However, the wholesaler class has worked hard to to assure consumers don’t have access to wines in this manner.

  14. Nick Oakley - December 31, 2008

    If you want to see an entirely ‘free’ market in wine, just have a look at the UK model. There is no ‘three tier’ sytem, and the model works extremely efficiently in delivering value to the consumer. Supermarkets hold much of the power, and account for 80% of ALL wine sales, as you’d expect in a free market – the survival of the fittest and strongest. The downside is that there is a tendency to use wine as a commodity to drive footfall, leading to a homogeneity of offer. Still, a decent independent sector thrives, importing and supplying wines to the more discerning. If there’s a market, there’s always a trader to fill it. And Mail Order, to all corners of the country is entirely possible (and unrestricted) as you could squeeze us into Texas ten times over. Very convenient when there’s 60 million consumers out there.
    Intrerestingly one of the more successful specialist wine companies, Majestic, work on a model of supplying ‘wholesale’ quantities to the public, so purchases need to be a minimum 12 bottles.
    Direct supply from vineyards tends not to be an issue, as there is a channel of water to cross, making shipping in small quantity prohibitively expensive. But many choose to hop over the English Channel and fill up the car at (much reduced) French prices.
    Hope this paints a picture of what happens in an unregulated market

  15. Joe Dressner - December 31, 2008

    By the way, do you really find Veuve Cliquot to be nice champagne?
    My goodness, it is some horrible stuff!

  16. Tom Wark - December 31, 2008

    VC isn’t bad. It’s not great, but it’s not bad.
    But as we both know, not only do I need an editor, but also a new palate. So there’s that.

  17. Joe Dressner - December 31, 2008

    Really? What’s wrong with your palate?

  18. Joe Dressner - December 31, 2008

    What makes Veuve Cliquot not bad?
    To me, it is the epitome of overcropped, manipulated Champagne.
    For the life of me, I can’t see what possible virtues you see in the stuff.

Leave a Reply