Global Champagne Market

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2014
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Executive Summary

Champagne is a key constituent of luxury spirit market and is often associated with celebratory occasions and events. This beverage
category has long been observed to thrive in times of economic boom while its sales decline during times of recession. Currently, the
global market for champagne is on the path to recovery after suffering a year of decline due to European economic downturn which
was the result of sovereign debt crisis in European Union. Champagne is of mainly three types based on the type of grapes used in the
production process: Blanc-des-Blancs, Blanc-des-Noirs, and Ros Champagnes.
France is the largest and most ancient wine and champagne producer in the world with UK remaining the top export destination for
champagne in 2013. Shipments of champagnes to emerging markets like China, Brazil and India, also posted a strong growth
registering new records both in volumes and value. Factors contributing to the demand in these countries include rising disposable
income, increasing brand awareness, established consumer base, credit availability and improving standard of living.
The key factors driving growth of the global champagne market include rising number of HNWI and employed population, increasing
internet penetration, ameliorating global economic condition and growing overall luxury market. Some of the noteworthy trends and
developments of the respective industry are shifting attention to US and Asia, deep discounting by retailers and enhancing demand
from emerging markets. However, the growth of champagne market is hindered by a number of factors including high import duty,
adverse economic conditions, grape shortage and counterfeiting.
The report offers an analysis of the global champagne market along with the study of regional markets. It discusses major market
trends, growth drivers and challenges, in detail. The market for champagne is personified by intense competition, with numerous large
and regional players competing majorly on the basis of quality and cost.
LVMH is the leading player in the global champagne market in terms of revenues, volume, and number of portfolio of strong brands
such as Ruinart, Mot & Chandon, Veuve Clicquot, Krug, Mercier and Dom Prignon. The other leading players include Lanson-BCC
Group, Vranken-Pommery Monopole SA, Pernod-Ricard and Laurent Perrier, among others.

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Champagne is of mainly three types based on the type of grapes used in the production process: Blanc-
des-Blancs, Blanc-des-Noirs, and Ros Champagnes.
Champagne turnover is resilient, coming out at US$... billion
(EUR billion) in 2013, compared to US$... billion (EUR billion)
in the previous year. This was the fifth best performance ever for
champagne sector, representing an annual growth of % in the
aforementioned period.
Champagne industry in France accounted for million bottles in
2013, with ..% decline compared to the previous fiscal. America
produced million bottles with an annual incline of %. Oceania
represented the maximum y-o-y growth of %, in 2013.
Over % of the champagne market is in Europe with France
accounting for .% of the industry in 2013. America, Asia and
Oceania represented %, % and % industry share,
respectively, in the aforementioned year.
Global Champagne Industry Breakdown by Region (2013) Global Champagne Industry by Region by Volume (2013)
Global Champagne Industry Turnover (2005-2013)
France Europe
(Except
France)
Americas Asia Oceania Africa and
Middle
East
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France Europe (Except France)
Americas Asia
Oceania Africa and Middle East
France is the largest and most ancient wine and champagne producer in the world with UK remaining the
top export destination for champagne in 2013.
The French champagne industry is declining at a CAGR of %
since 2010. This consistent decline in the industry is the direct
impact of Global and European economic environment. The
consumption in France in 2013 accounted for million bottles of
champagne, down by%, compared to million bottlers in the
previous fiscal.
The UK remained the biggest destination for champagnes in 2013,
accounting for million bottles in 2013. The same recorded an
annual decline of % compared to million bottles in the
previous year.
UK is the largest export market of France with % share of the
total champagne exports in 2013, immediately followed by the US
which held ..% export share. Germany, Japan and Belgium are
other important export markets, with respective share of ..%, %
and % share in the aforementioned period.
Top Export Markets of France (2013)
UK Champagne Shipments by Volume (2006-2013)
Champagne Industry in France by Volume (2005-2013)
2005 2006 2007 2008 2009 2010 2011 2012 2013
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UK The US Germany Japan Belgium
Australia Italy Switzerland Spain
2006 2007 2008 2009 2010 2011 2012 2013
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The key factors driving growth of the global champagne market include rising number of HNWI and
employed population, increasing internet penetration, ameliorating global economic condition and
growing overall luxury market.
Champagne shipments from France to the US were recorded at
million bottles in 2013, registering an increase of approximately
% over million bottles shipped in 2012. The market continues
to be seen as a growth opportunity as consumption levels remain
low.
As of 2013, the champagne shipments in Germany accounted for
. million bottles, compared to . million bottles in 2012. The
same represented a y-o-y decline of %. In this major consuming
country, champagne is mainly distributed through qualitative
network, e.g., wine shops, hotels, restaurants etc.
The champagne houses sold more than% of total volumes and
realized .% of turnover in 2013. So with around of the total
turnover, it becomes essential for the houses to secure sufficient
quantity of high-quality grapes.
Champagne Production Breakdown by Ownership (2013)
Champagne Shipments in Germany (2006-2013)
Champagne Shipments to the US from France (2006-2013)
2006 2007 2008 2009 2010 2011 2012 2013
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2006 2007 2008 2009 2010 2011 2012 2013
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Champagne Houses Winemakers Cooperatives
The growth of champagne market is hindered by a number of factors including high import duty, adverse
economic conditions, grape shortage and counterfeiting.
The global production of wine climbed % to the highest in seven years as grape harvests rebounded in Spain, Argentina and France. The
production rose to million hectoliters in 2013, compared to million hectoliters in the previous year. This volume growth has increased for
eight largest producers, leaving enough wine to fully cover distilling-industry requirements for the first time since 2007. Italy remained the
largest producer ahead of Spain and France for the aforementioned year.
The champagne bottle sales in 2013 has dropped by roughly million to million bottles shipped worldwide, following a million decline
in 2012. The decline in sales was the outcome of difficult business climate in the major European markets. The sales in European Union fell
% to million necks of champagne and by.% in France. In contrast, the rest of the world absorbed million bottles, representing an
annual incline of %.
Europe is the largest producer of wine, although, it has lost its dominant position somewhat over the time. In 2000, Europe produced % of
the worlds wine, which shrunk to roughly % by 2013. Italy is the largest producer holding .% of the production, followed by Spain and
France with % and .% share, respectively, in the aforementioned period. America is also a major region for wine production holding .%
of the share.
Note: Market attractiveness is inverse of penetration. Low penetration means high attractiveness and vice-versa
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Global Production of Wine (2005-2013)
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Global Champagne Industry Sales (2005-2013)
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