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August 6, 2020

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Champagne losing its fizz as pandemic puts a cork on consumption

By Thomas Adamson | 00:00 UTC+8 August 6, 2020 | Print Edition

Champagne is losing its bubbly.

For months, the coronavirus outbreak has been a gut punch to weddings, dining out, parties and international travel — all key sales components for the French luxury wine marketed for decades as a sparkling must at any celebration of consequence.

Producers in France’s eastern Champagne region, headquarters of the global industry, say they’ve lost an estimated 1.7 billion euros (US$2 billion) in revenue this year as sales have fallen by a third — a pummeling unmatched in living memory.

They expect about 100 million bottles to languish in their cellars by the end of the year.

“We are experiencing a crisis we evaluate to be even worse than the Great Depression,” said Thibaut Le Mailloux of the Champagne Committee, known by its French acronym CIVC, that represents 16,000 winemakers.

Recognizing the urgency of the problem, CIVC is launching unprecedented damage-control measures.

Like oil-producing countries, the committee regulates the harvest size every year to avoid the kind of excess production that would cause prices to plummet.

At a meeting scheduled for August 18, CIVC is expected to impose a cap so tight that record quantities of grapes will be destroyed or sold to distilleries at discounted prices.

The prospect alarms smaller producers more vulnerable to caps.

Anselme Selosse of Jacques Selosse Champagnes called it “an insult to nature” that Champagne’s famous grapes might even be destined to produce alcohol for hand sanitizer, as is happening in other wine-producing regions such as Alsace after demand spiked during the pandemic.

“We are to destroy (the grapes) and we pay for them to be destroyed,” Selosse said, referring to the industry as a whole. “It’s nothing but a catastrophe. Champagne has never lived through anything like this before, even in the World Wars. We have never experienced a sudden one-third decline in sales and over 100 million bottles unsold.”

Major producers such as Vranken-Pommery predict the crisis could last for years.

“It should not be forgotten that (Champagne) has lived through every single war,” said Paul-Francois Vranken, founder of Vranken-Pommery Monopole. “But with the other crises, there was a way out. For now, there is no way out — unless we find a vaccine.”

Vranken said the very essence of Champagne marketing, a drink enjoyed at parties and weddings, needs to be re-evaluated to reflect the new normal — fewer festivities and celebratory group events.

The new branding strategy for his and other Champagne companies highlights the wine’s status as a naturally produced (often organically), quality drink from a historic, picturesque French countryside region.

“Even if the bars and nightclubs are closed for five years, we don’t plan on missing out on customers,” he said. “There will be a very big change to our marketing that highlights the grandeur of our wines.”

Selosse, who produces many “natural” Champagnes with no added sugar, also hopes the pandemic will encourage thought about future champagne marketing and how the multi-billion dollar industry is restructured. He would like to see a more cooperative side to production, such as “communal wine presses” to help pool the costs for smaller producers.

He said adaptability has served Champagne well in the past, helping it evolve from a dessert wine in the 19th century to the modern-day dry version “brut.”

He even thinks — a minority view among producers — the industry could move away from effervescence and produce all sorts of wine as it did in the past — red, white and still.

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