Sparkling wine and cocktails steal Champagne’s fizz

Despite recovery in the UK off-trade, recent figures from CGA Strategy suggests that Champagne sales in the on-trade are still in a state of flux.

With Champagne’s UK on-trade volume sales down 4.7% compared to a year ago (MAT to August 2012), the category outperformed the 5.9% decline in still wine, but fell some way behind the 2% increase in the sparkling wine sector.

Offering some analysis of this performance in the October issue of the drinks business, CGA Strategy’s Kylie Poole observed, “The continued decline of Champagne sales is a result of a number of factors: recession mindset, rise in popularity of sparkling wines and sales cannibalised by other categories, including cocktails.”

Pointing to the sparkling wine category’s “substantial growth and consolidation throughout 2012 at the expense of Champagne,” Poole attributed this shift to a change in consumers’ perceptions.

“Whereas in the past sparkling wine was considered as Champagne’s poor relation, consumers’ understanding of the sparkling wine category has improved significantly in the past couple of years,” she observed. “This has led to the category being more highly regarded and it is now considered a credible alternative to Champagne.

In addition to this increased credibility, Poole highlighted “the more attractive price point that sparkling wine holds,” suggesting that “for value-conscious consumers, sparkling wine is perceived as much better value for money than Champagne.”

In particular, she flagged up the strong performance of rosé sparkling wine, which has seen on-trade volumes rise by 21% during the last year, compared to a 12% volume decline in rosé Champagne.

Commenting on this performance, Poole said: “Although it remains evident that consumers associate pink fizz with being a ‘treat spend’, evidence suggests they are increasingly looking for value for money and choosing rosé sparkling wines instead of rosé Champagne due to their more affordable price point.”

Despite the increasingly strong competition from the sparkling wine sector, Poole pointed to some positive signs from a number of individual Champagne brands.

“The mid-range brands such as Moët & Chandon and Veuve Clicquot are witnessing volume growth as consumers look to affordable, trusted, well-known brands when they are treating themselves, rather than the higher priced vintage Champagnes,” she reported.

In addition to the threat from sparkling wines, Poole highlighted the growing reach of the cocktail sector into traditional Champagne territory.

Citing CGA’s Cocktail Report, she noted: “One in five outlets are now stocking cocktails, an increase of 16% on a year ago, as a means of driving footfall and maximising spend per head.”

Observing the growing popularity of cocktails for celebratory occasions, Poole described the development as “cannibalising Champagne sales in these types of occasions where Champagne traditionally ruled the roost.”

However, she argued, “There is ample opportunity for Champagne to benefit from the cocktail trend,” highlighting CGA’s Cocktail Report finding that “Champagne cocktails are the fifth most popular cocktail in mainstream outlets.”

Based on this research, Poole concluded: “With creative product choices and an interesting serve, Champagne cocktails could help revive the Champagne category.”