Did you toast the New Year with Champagne? And if so, who produced it?
One of the more talked-about success stories of the last 25 years has been the ascension of grower-Champagnes. Except that it never happened. In fact, the vignerons’ share of the market has shrunk by a quarter since the turn of the century.
The reality of the Champagne economy
Today, growers produce and sell around 18% of the region’s wine, compared to 25% in 1999-2000. The 130 cooperatives’ 9% share has barely changed, while the 370 ‘Maisons’ — merchants — who had around two thirds of the market, are now edging their way towards three quarters. This change in the balance of power was not what many expected at the turn of the century.
The relationship between the vignerons and merchants of Champagne has had a long and bumpy history. Inconveniently, for those who hark back to an earlier time when most wine was produced and sold by European peasants from their own vines, no such era ever existed. The peasants may, indeed, have picked the grapes, but responsibility for winemaking was usually in the hands of landowners who could afford a press, and the maturation, blending, bottling and sales were all controlled by merchants. This was as true for the producers of Champagne as it was for the grandest châteaux in Bordeaux. As the French researcher Aline Brochot noted in le Sud-Ouest Européen in 1999, even the vignerons who became landowners after the revolution essentially remained producers and sellers of grapes.
A quick history of Champagne
In the early years of the 20th century, the growers and merchants were often on opposite sides of arguments that led, in 1911, to what Brochot describes as a ‘veritable revolt’ by the former group. The initial exclusion of the Aube from the appellation — whose boundaries were established by the houses — and then its description as a ‘second zone’ was a particular point of contention. This was resolved in 1927 by the Aube’s inclusion, but some enterprising growers had already begun to produce their own Champagne as Récoltants Manipulants. This accelerated during the Depression years of the 1930s when the houses stopped buying grapes.
Thirty years later, Brochot says, the two sectors had developed their own supply chains, with the vignerons focusing on the domestic market and direct sales. This division worked quite well, especially in the boom time of the 1980s when ‘Champagne sold itself’ but less so in the following decade when sales slowed. In 1992, the Syndicat Général des Vignerons launched an advertising campaign promoting their members as mastering the cycle from the vine to the bottle; from the soil to the labels bearing their names. Referring back to the squabbles on the 1920s, questions began to be asked about the validity of the Champagne’s anachronistic cru system that covers entire villages rather than specific vineyards. As Brochot describes, growers no longer wanted to push the notion of ‘Champagne de cru’, preferring to talk about ‘Champagne de propriété’.
Arguments continued during the 1990s between the houses and the growers over grape prices but, as Champagne sales boomed in the run-up to the Millennium, Brochot wrote about an ‘armistice’. Champagne had, she said, ‘rediscovered its indisputable and unique image as a wine of celebration’ and the region had regained its ‘unity’. How long, she wondered, would this last?
What’s happened since
Nearly 25 years later, the state of unity is decidedly questionable. The French publication, Vitisphere, last May, published an article headlined: “Perhaps now is the time to disengage from the negociants”. The words came from Christine Sévillano, president of the Fédération des Vignerons Indépendants de Champagne (Federation of Independent Winegrowers of Champagne) who told her association’s 403 members that: “It's now or never to regain market share that was harder to come by a few years ago."
According the region’s own statistics, within France, where it is relatively simple to buy Champagne directly from the producer, the houses still have 55% of the market, with the cooperatives producing a chunk of the remaining 45%.
Building the domestic market — where specialist retailers complained about difficulties in obtaining négociant wines in 2022 and their low profitability — might have looked manageable in early 2023, but by the end of the year, the picture for Champagne sales in France was a lot less rosy.
The French are falling out of love with Champagne. Over the first 11 months of 2023, sales through supermarkets fell by 20.7%.
As the economic journal BMTV reported, according to NielsenIQ statistics, the French are falling out of love with their most famous sparkling wine. Over the first 11 months of last year, sales through supermarkets fell by 20.7%, while those of cheaper alternatives, including French Crémant, Prosecco and Cava rose by 3%. While supermarkets only distribute 27% of Champagne in France, these trends are almost certainly indicative of the market as a whole.
Outside France, taken together, the growers and the cooperatives are only responsible for 15% of exports.
For many who see wine through the lens of writers, sommeliers and specialist retailers, this makes little sense. Surely Jacques Selosses, Agrapart and Pierre Peters and their ilk have taken the world by storm. Who, they ask, would want to drink anything from a giant Champagne House that buys in most of its grapes when you can have stuff made by men and women from their own vines?
The simple answer, as the charts reveal, is most Champagne drinkers.
So what’s the explanation?
The truth about Champagne consumption
First, let’s look at the demand: the inconvenient truth is that the average fizz drinker knows very little about the stuff in their glass, from the varieties of grapes to the method and location of the region. Despite the best efforts of the Champenois and their lawyers, for many, ‘Champagne’ is still a synonym for more prestigious sparkling wine. The detail of whether the name on the label refers to the head of a family with a wine estate or a merchant or if it has been created for a blend bought from a big cooperative by a supermarket chain, is not part of their knowledge. When shopping, they look for a name they recognise or a bottle with an attractively low price.
As Christophe Hermelin, marketing director of Nicolas, France’s biggest wine retail chain told Vitisphere, people are attached to a brand and they stay with it. They’re not going to change.
Around a third of the Champagne retailed in France is sold through supermarkets where grower-Champagnes may be present, but not prominent. Of these supermarket sales, another third benefits from the kind of promotional discount that doesn’t apply to smaller producers. The same applies to specialist retail chains globally and, of course, the duty-free outlets where Champagne generally occupies the lion’s share of the wine that is on offer.
Brand, price and volume-availability will all be crucially important.
Champagne, by its nature, is also sold in volume to on-trade customers hosting some kind of celebration. Here, too, brand, price and volume-availability will all be crucially important. Most parents of the bride will either accept the Champagne option offered by reception venue or the caterers who would otherwise charge heavily for corkage or, if they are free to choose, they’ll buy whatever is cheapest.
Looking at the supply-side provides more reasons why the houses are winning. Champagne is highly unusual in having an officially-established price per kilo of grapes for each harvest. As this has risen to €7 for the most basic Champagne, many growers have done their calculations. They’ve added up the costs of processing their crop, buying bottles — at prices far higher than the houses will be paying — and storing the wine for at least a year before going to the effort of finding customers for it, and compared these with the prospect of guaranteed payment from a merchant and a relatively stress-free life.
Some, of course, will be more ambitious, but it will be interesting to see whether there are enough of these for grower-Champagnes to regain their market share of 25 years ago.