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Champagne: Analysis of a market in transition

Pascale Ruchon
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Champagne: Analysis of a market in transition

Champagne may have sat on the sidelines during the Covid-induced lockdowns, but the industry has adapted. E-commerce introduced brands to the benefits of having a direct relationship with their consumers, and brands are now offering their customers what they are craving: rare vintages with greater environmental responsibility. It seems that Champagne isn’t ready to play second fiddle to the growing sparkling wine category.

With bars, restaurants and nightclubs closed, and weddings, baptisms, birthday parties, and sporting events cancelled, Champagne, the beverage of choice for such celebrations, was relegated to the cellar during the worst periods of the Covid-19 pandemic.

According to France's Comité Champagne, the sector’s pre-tax turnover fell 16.7% in one year, plummeting to €4.2bn in 2020. The same year, 244.1 million bottles were shipped within France and throughout the world, compared to around 300 million in previous years, reflecting a decline of nearly 18%. The domestic market lost nearly 18% in value (€1.6bn) and 20% in volume (113.3 million bottles). Despite Champagne's strong international presence, and the fact that countries were not all in lockdown at the same time, exports declined by around 16% in value (€2.6bn) and in volume (130.8 million bottles). This decrease was felt nearly across the board, beginning with its three largest export markets: the United States, the United Kingdom (also affected by Brexit), and Japan. Within the top-10 markets, only Australia showed growth (an 11% increase in value), attributed to the country’s island status, coupled with effective management of the epidemic.

Getting closer to consumers

To compensate for the brutal halt in champagne consumption outside the home, as well as duty-free purchases, brands were forced to adapt their distribution. “In all of Perrier-Jouët's markets, there has been a boom in e-commerce and wine shops, two channels that were already showing promise before the pandemic began,” comments Quentin Meurisse, VP Marketing Champagne at Pernod Ricard. Family-owned brands, meanwhile, which often have a specific clientele that tend to place their orders via paper forms, sped up their efforts to digitalize sales.

As soon as the first lockdowns ended, Champagne was back with flying colors: from January to April 2021, bottle deliveries shot up 26% compared with the first four months of 2020. The expected return to normal should not, however, slow the industry’s efforts to shift gears. “Direct sales, mailshots, and newsletters enabled brands to create a privileged relationship with end-consumers who had been waiting for exactly that,” says Marie Mascré, President of Sowine, a wine and spirits marketing consulting agency. “This trend has manifested in another way as well: since the last lockdown ended, wine tourism in the Champagne region has exploded. Winemakers who were rarely open to the public are discovering the pleasure of receiving visitors.”

In this regard, Champagne has some catching up to do compared with other winemaking regions. But vineyards are diversifying their offers to include vendange events, picnics among the vines, village tours, wine-tasting workshops, cellar visits, and more. Some brands are leading the way; Boizel, for example, showcases its renovated historic buildings in Epernay and hosts tastings in a dedicated space. Listed since 2015 as a UNESCO World Heritage Site, the region is developing an approach very different from mass tourism.

In recent years, champagne has faced increasing competition from crémant, prosecco, and cava, so it is in the industry’s interest to maintain its premium positioning, namely by taking a qualitative approach to its products. “Consumers identify as increasingly knowledgeable about wine; they are interested in wine-making and take pleasure in learning about the product. And these consumers are turning to niche Champagne cuvées,” notes Mascré. “In the past, people wanted to drink bubbly, and that was it. But palates are becoming more refined, and today consumers are looking for specific Champagnes with a story to tell,” adds Alexandre Cattier, President of Cattier Champagnes. “As a result, the market is split between supermarket champagne brands and top-tier vintages. The substantial mid-range offer that existed 15 years ago has shrunk.” Between 2008 and today, Cattier’s sales have decreased from one million to 600,000 bottles, as the brand focuses on its premiers cru, including the Clos du Moulin, unusual in that it is made with grapes from a single plot. This shift towards premiumization can also be observed in the tasting ritual. Mumm developed a concept based on the scientific method that involves discovering how touch and sight can influence taste. In collaboration with cellar master Laurent Fresnet, neuroscientist Gabriel Lepousez, and designer Octave de Gaulle, the brand created two glasses in different materials and colors that give tasters the impression they are drinking two different wines.

In addition to being the subject of high-end marketing tactics, Champagne remains the symbol of celebration, which was forbidden during lockdowns. “The frustration associated with a lack of any kind of nightlife kindled a desire to make a strong comeback. French brands had anticipated the end of lockdown, before nightclubs reopened, by working on new interactive projects,” says Marc Bruneau, Sales Manager at Dapy. This packaging specialist, for example, invented a luminescent label adopted by Perrier-Jouët: thin enough to blend in with the bottle design and illuminated by a patented reflective film, it can be recharged and reused as many as 200 times.

Packaging & environmental responsibility

Packaging manufacturer Doogood developed a champagne bucket for Veuve Clicquot: resembling a vintage television set, the bucket lights up at the turn of a button. The removable battery facilitates recycling at end of life. But this amusing, well-designed object would also fit well in any home decor, giving it a second life.

Notions of environmental responsibility have trickled down into every aspect of the champagne industry. In the last 10 years, glassmakers O-I, Verallia and Saverglass have reduced the weight of glass bottles from 900g to 835g. Manufacturers of cardboard packaging have also had to adapt. “Ecological concerns are increasingly driving the elimination of sleeves, which are now found in greater numbers in supermarket distribution, but their quality is quite disappointing,” says Frédéric Ansart, Sales Manager at Wauters.

“What the champagne industry is now asking for are single-material sleeves in all forms of cellulose and that do away with accessories like ribbons, magnets, and metal plaques. A lot of work goes into creating stabilizers from cardboard, a material that doesn’t absorb shock as well as mousse or thermoformed plastic, and is also less visually pleasing,” says Bruno Lefebvre, Sales Director at Verpack. The group found a good compromise for a Canard-Duchêne coffret containing a bottle and two glasses: by incorporating a stabilizer made of white cardboard, instead of compact or ribbed carboard, the object can also serve as a display case when open.

At Ruinart, innovation comes in the form of its Second Skin molded cellulose pack designed by French agency Chic and manufactured by Pusterla 1880 and James Cropper, while Perrier-Jouët stands out with a lightweight gift coffret made of cardboard and printed by Le Sanglier using a nearly inkless embossing technique. In both cases, packaging as white as the chalk quarries of the Champagne region is enlivened with limited-edition colors by artists like Alexandre Benjamin Navet, for Ruinart, and Bethan Laura Wood, for Perrier-Jouët. Cattier developed a limited-edition handmade champagne coffret in recycled leather with eco-designer Virginie Wiertz. In each of these examples, understated design demonstrates that the champagne industry is committed to making environmental responsibility one of its distinguishing features.

Focus on Sustainability: Key to Champagne's image

“Champagne represents 300 million bottles in a global market of 5 billion bottles of sparkling wines. To stand out, brands must strive for excellence. And that doesn’t stop at great vintages in beautiful bottles; it applies across the board, including environmental responsibility,” says Arnaud Descôtes, manager of quality and sustainable development for the Comité Champagne. This professional organization, which brings together 16,000 winemakers and 340 champagne brands, has been seeking collective solutions to these issues for some time. Although diverse and scattered over 280,000 often small plots, the profession is making Champagne a pilot region in terms of sustainable wine cultivation. With three areas of action - water, air, and biodiversity - the organization has ambitious goals, such as a 25% reduction in carbon emissions by 2025, carbon neutrality in 2050, and the elimination of chemical herbicide use by 2025. In addition, growers must obtain an environmental certification by 2030. They have three choices: the general “Environmental Certification (HVE),” the “Sustainable Viticulture in Champagne (VCD),” and the French organic label. Currently 43% of the Champagne vineyard is certified, including more than 30% with VDC, 6% with HVE, and 6% organic. Why are so few certified organic? Because of the weather! Champagne is more humid than the vineyards in the south of France and struggles to protect its plants from diseases, such as mildew, using only authorized organic treatments. Copper, for instance, is used as a preventive contact treatment, but must be reapplied during rainy weather, and is toxic when overused. Experiments are being carried out by organic winegrowers to reduce copper use, while better stimulating the plants’ defense system.

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