Sunday, November 23, 2014

WS 2007: Bubbly Sales Boom All Year Round

Americans discover that sparkling wine isn't solely for celebrations
Mitch Frank
Issue: December 31, 2007

Americans are reaching for bubblies in increasing numbers. Sparkling wine sales in the United States are outpacing the rest of the industry, seeing their biggest growth since the 1980s. According to projections, by the time corks pop on New Year's Eve, U.S. sparkling wine sales will have grown by 6 percent in 2007, while the rest of the wine industry will have grown by 5 percent.

Sparkling wine has traditionally been viewed in the United States as a beverage for celebratory occasions and holidays, but year-round sales are on the increase. "Sales of true Champagne have steadily risen in the United States as wine consumers become more familiar with Champagne's versatility in pairing with a wide range of foods," said Sharon Castillo, director of the Office of Champagne, USA, part of the Comité Interprofessionnel du Vin de Champagne.

Margie Healy, director of public relations at Korbel, confirmed that the California sparkling wine producer was seeing a similar increase in year-round demand. Domestic sparkling wine sales gained 3 percent in 2006 according to estimates from Impact Databank (owned by M. Shanken Communications, the parent company of Wine Spectator).

But is it just a fad? Sparkling wines have seen good times before—and then gone bust. In the booming economy of the Reagan years, sales of sparklers peaked at nearly 20 million cases a year. Then the recession in the early '90s wiped away more than a third of those numbers. Sales were stagnant until now.

Several factors appear to be behind the recent success. One is the popularity of rosé in the U.S.—especially sparkling rosé. Champagne houses and other sparkling producers have also targeted 20- and 30-somethings with single-serve bottles and other smart packaging. And as U.S. wine consumption as a whole increases, more Americans have learned that sparklers are food-flexible wines.

"People are realizing Champagne is not only for celebrations," said Pascal Boye, sales director in the Americas for Champagne house Nicolas Feuillatte. "We see people buying Champagne just to enjoy at home. In restaurants, more people are buying it with a meal because they are seeing Champagne as a wine."

However, Champagne in particular faces a challenge in keeping sales numbers high. The French region is seeing more demand from America and emerging markets like Japan, but supply has not increased, as there is little to no additional approved land to be planted. There is discussion of expanding the appellation, but that is years from fruition.

Even so, producers are not concerned, some believing that a Champagne shortage is nowhere in sight. "I think this is a faux problem," said Jean-Louis Carbonnier, head of public relations for Salon and Delamotte. "I find the supply concern especially ironic given the fact that a producer has been able to make a deal with Woolworth in the U.K. to offer a 5 [pound sterling] bottle."

The U.S. dollar's decline in value is of greater concern, but Champagne prices have managed, so far, to hold relatively steady. "We all see America as a key market and will do what we have to do, even take a loss on the currency," said Boye.

So, despite such concerns, producers are wasting no time in trying to build on Americans' taste for bubbly. Boye said Feuillatte will launch a major ad campaign next year, while Korbel has promotional ties with NBC Sports.

"Champagne is unique and there is a lot of money in the marketplace," said Carbonnier. "There are more millionaires than ever around the world, and growing middle classes ... who aspire to the good life."

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