Well travelled

Despite worldwide challenges, it’s been an upbeat time for champagne in duty free, reports Giles Fallowfield


IN 2016 THE CHAMPAGNE market saw a slight drop in overall shipments from 312.6m to 306.1m bottles, pretty much reversing the small increase of the previous year. As is typical in a period of recession, the major brands have mostly performed fairly well and their share of the total market actually grew slightly to a 10-year high of 71.7% in terms of volume.

Little dramatic change is expected in 2017, as is indicated by the Comité Champagne’s July 21 decision to set the yield for the just-completed 2017 harvest at exactly the same level as in 2016. It expects sales to stay broadly flat or grow slightly, though in a strife-torn world, making accurate predictions for champagne demand in the second half of the year is difficult, to put it mildly.

In the first half of 2017 total shipments of champagne are up 3.3% versus the first six months of 2016 and while this may only amount to an extra 3.6m bottles – the vast majority of shipments take place in the second half of each year, with the last quarter key for sales – the major houses which dominate export sales, saw 5.4% growth in this period amounting to 4.32m bottles. The big brands will also take encouragement from the fact that, while the market within Europe stagnates, that outside grew for them by 18.9% in the first six months of 2017.

Set against the difficult economic and political background, the performance of champagne in travel retail has been pretty buoyant. According to IWSR figures, travel retail is now the sixth largest champagne “market” having overtaken the Belgian domestic market in 2016. “The Belgian market has had a disastrous 18 or so months following huge duty increases on spirits. This has impacted all the other categories as consumers have gone across to neighbouring countries to shop for alcohol,” says an IWSR spokesman.

Nevertheless, IWSR figures suggest that travel retail has grown its market share of all champagne sales globally to 3.2% in 2016 versus 3% in 2015. France is number one with almost 52% (a decline of almost 1%) and the UK is second with close to 10%. Travel retail’s share of what IWSR calls super-premium – broadly anything priced at more than US$30 – has also gone up from 7.5% to 7.8% in 2016. This is a channel that ranks as the ‘fourth international market’ for super-premium sales, IWSR says.

Donatienne de Fontaines-Guillaume, managing director for global travel retail at Moët Hennessy, notes its champagne brands have enjoyed “dynamic, double-digit growth in terms of both volume and value in the past 12 months”. This year it has again targeted summer destinations to catch holiday traffic with activations built around Moët & Chandon Ice Impérial, launching Ice Impérial Rosé worldwide. And, she says “trendy urban destinations were targeted for Veuve Clicquot Rich activities, also featuring the new Rich Rosé cuvée”. Dubai, Hong Kong, Singapore, Sydney and Madrid were added to more obvious Mediterranean summer holiday destinations such as Malaga, Ibiza, Palma de Mallorca, Barcelona and Nice where these products have already been well received.