Champagne sales fizz, but wine market challenges remain

Sales are up in the on-trade thanks to more Champagne being sold by the glass, while off-trade sales have increased as shoppers seek out brands they know and trust, according to the Lanson International Champagne Category Report 2015.

The Lanson report highlighted how Champagne and sparkling wine is bucking the long-term decline in wine volume sales in the UK.

It came as the Wine and Spirit Trade Association (WSTA) called on the chancellor to build on his support for the industry in his July budget.

While acknowledging that confidence was creeping back into UK wine sector, the WSTA said tough trading conditions, the threat of restrictions on local licensing and sponsorship, and the 'ever noisy voice' of the anti-alcohol lobby where all cause for concern.

Growth segments​

Using figures supplied by Nielsen, CGA Strategy and Futuresight, the Lanson report found that Champagne and sparkling wine are the only two categories registering volume growth (up 4.9 per cent and 15 per cent respectively) in the on-trade, while value growth 19.5 per cent was 83.1 per cent respectively.

According to the report, the top five international brands – Moët & Chandon, Veuve Clicquot, Lanson, Perrier-Jouët and Laurent-Perrier – are all in value growth in the on-trade, as people continue to look for well-known Champagne brands.

Champagne has driven its growth by increasing its distribution (up 13.3 per cent), price (up 13.9 per cent) and, importantly, its rate of sale (up 5.4 per cent), reflecting increased consumer demand.

The key channels for Champagne are hotels (many of which double as both late night bars and restaurants) and restaurants. However, wine bar Champagne sales have increased by 37.5 per cent in value over the past year – which, according to the report, demonstrates that it is being drunk during less formal occasions.

In the off-trade, the report said Champagne value sales increased slightly in 2014, but volume sales softened as retailer and ‘soft brands’ continued to decline.

Off-trade sparkling wine, meanwhile, increased by 25 per cent in value and volume in 2014. Lanson found this is primarily driven by prosecco, with Italian sparkling alone growing by 61 per cent in value. Spanish cava, in contrast, has declined by 9 per cent.

Paul Beavis, managing director for UK and international markets at Champagne Lanson, said: “Customers come into the category through prosecco as an entry-level and evolve over time, as their palate matures into Champagne as their drink of choice.”

WSTA pledge​

As part of the WSTA’s ‘State of the Nation’ briefing, chief executive Miles Beale made clear the organisation’s commitment to engage with government on the difficult issues facing the industry.

He conceded that the freeze in wine duty in March should help the industry, but argued that sustained and improving support is required.

Beale said: “While the Conservative’s business-friendly manifesto is cause for optimism in the sector, we will press the case for fairness and ask them to rebalance the unfair rates of excise duty. Wine was the only alcoholic product not to have received a 2 per cent cut in the March budget.”

He added: “The industry can only thrive if allowed to trade in the most favourable economic conditions.”