Prosecco beats Champagne for UK growth

Sales of Prosecco continued to grow in the UK on- and off-trade in 2014, but not at the expense of Champagne, according to the fourth annual Lanson category report.

Champagne vineyards

Both Champagne and sparkling wines saw increases in both volume and value in the combined on and off trade channels in 2014, but it was sparkling wines that have achieved the most growth in the UK.

In the on-trade values sales of sparkling wine rose 83.1% and 15% by volume to 6.7 million hectolitres, ahead of Champagne which saw volumes increase by 4.9% and 19.5% by value to £395.2m.

“Weekly sales see a similar pattern to previous years for Champagne and sparkling wines, with clear calendar events in the years around Valentine’s, Mother’s Day, East and bank holidays driving Champagne sales”, the report said. “Christmas is the peak for both sparkling and Champagne with many people buying into “bubbles” during the festive period.”

This positive trend was attributed to more venues opening across the UK with restaurant openings up 11.4% and hotels up 7.2% in the UK in 2014. In comparison, sales of still wine fell flat, down 0.9% by volume and 0.3% by value.

Of the top five international Champagne brands, Möet & Chandon sales increased by 11.2% by value, Lanson by 13.8%, Perrier Jouet by 66.7%, albeit of a smaller base, and Laurent Perrier by 11.7%. Sales by value of Veuve Clicquot fell relatively flat at 0.9%.

The report predicted that sales of Champagne would continue to grow in the on-trade, if the industry can continue to create more “Champagne occasions” and more visibility, which it said included upping its focus on selling Champagne by the glass.

In the off-trade volumes sales of sparkling wine increased by 25% to 63.7 million hectolitres, with value sales worth £577.5m, up from £456.9 in 2014.

Italian sparkling wine dominated this rise, driven by Prosecco, with sales by value increasing by 61% to £372.9m. Champagne in comparison achieved only a slight increase in value sales of just 1% to 318m, decreasing in volume by 0.8%. Cava sales fell 9.3% to £148.5m and Australian sparkling wine sales were also down. English sparkling wine saw a positive increase of 37.3%, said to be worth around £8m, while French sparkling wine other than Champagne rose 24.6% to around £4m.

“Interestingly there has been a significant decline in the proportion of Private Label Prosecco being sold indicating a consolidation in the category as it matures, with more brands emerging and therefore less volume becoming available for Private Label”, the report said. “The challenge for Prosecco going forward will be, given their relatively simple production methods, ensuring a consistent product quality to match their burgeoning sales.”

Despite the rise of Prosecco and Italian sparkling wines continuing at pace in both the on- and off-trade channels Paul Beavis, managing director for UK and international markets, said those categories’ growth has not been at the expense of Champagne.

He said: “We welcome new sparkling labels entering the ‘bubbles category’ especially as our findings reveal, it hasn’t been at the expense of Champagne. Customers come into the category through Prosecco as an entry level and evolve over time, as their palate matures into Champagne as their drink of choice, especially for those every day special moments. And, with this renewed understanding about the quality aspect of Champagne; customers purchase Champagne through taste as their interest in quality becomes more prominent.”

In terms of Champagne, the report gave five recommendations for continued growth which included communicating why Champagne is a “special product” in terms of “taste” and “quality”, and why it commands a price premium.

It also stressed the need to drive Champagne “occasions” through events, such as Champagne Lanson’s Wimbledon activity which peaked in June and July 2014, proof it said of the ability to create new and unseasonal Champagne occasions around events.