Champagne rides high in times of COVID

Champagne rides high in time of COVID

HUMANS ARE STRANGE CREATURES. WELL INTO THE SECOND YEAR OF A WORLDWIDE PANDEMIC WITH INTERNATIONAL TRAVEL NEARLY AT A STANDSTILL, ECONOMIES SUFFERING, COMMUNITIES DIVIDED, BUSINESSES (AND MANY RESTAURANTS) CLOSING, LOCKDOWNS CAUSING CHAOS AND BORDER CLOSURES PREVENTING SOME OF US FROM SEEING FRIENDS OR FAMILY OR EVEN GETTING HOME, YOU’D THINK THERE IS VERY LITTLE REASON TO CELEBRATE ANYTHING. IF THERE WERE ANY SECTOR OF THE ECONOMY ONE WOULD EXPECT TO SUFFER, IT WOULD SURELY BE CHAMPAGNE AND SPARKLING WINES. NOTHING IS MORE CLOSELY LINKED WITH A CELEBRATION THAN A BOTTLE OF FIZZ.

Words Ken Gargett

Not so. Sales of champagne seem robustly healthy, rising every month in the year to June. This is very much in the nonvintage sector of the market (already our most popular). Worth noting that the rest of the world does not see this enthusiasm for champagne. CIVC figures show just how well champagne is doing here. In 2020, exports recorded a growth of 11.2%, reaching 8.5 million bottles, with turnover increasing by 11.1% to €126.1 million. “This was the biggest growth in 2020 among Champagne’s leading markets. In fact, 2020 marked the second-best year in the history of champagne exports to Australia, after 2017 (8.5 million bottles for a turnover of €131.8 million)”.

The last fifteen years have been a golden (sparkling?) period for champagne sales in Australia, increasing in both volume and value by an average of 7.9% per year. In that time, Australia has moved from the tenth to the sixth biggest champagne market by value, behind the UK, USA, Japan, Germany and Belgium. There are now 261 brands of champagne available in Australia. Will we see all this maintained as the Delta variant sweeps across the land? Who knows?

THE STATS

Figures to July 2021 show that the sparkling market is a billion-dollar business, growing at 19.4% in value and 6.6% in volume. That said, prosecco is growing at 21.6%, so while the trend is to premiumisation, this is perhaps not at the very highest level?

So many restaurant closures seemed certain to devastate the sparkling market, as one in ten Australians will drink sparkling/ champagne at an on-premise establishment (these tend to be older and female patrons from the suburbs – gross generalisation, of course). The trend has been away from champagne, but it is still remarkably healthy.

Ed Carr

TASMANIAN SPARKLES

I had the chance to chat with Ed Carr from the House of Arras, one of this country’s finest winemakers and undoubtedly our star of sparkling. Ed confirmed that sparkling sales were going “really well. We are pushing the stuff out the door”. He noted an increase in wine, generally, at 3.5%, but 14.6% for sparkling and champagne (it would be fair to say that various ‘authorities’ might offer slightly varying figures, which can be frustrating if one is seeking exactitude, but that they all point very much in the same direction). Ed did note that on-premise sales were hurting.

Why? Among the theories we discussed are that people are “celebrating at home, they want to “spoil themselves, people need cheering up, if people can’t travel, they’ll open something different that helps to replicate that” and also, they are opening a bottle because “they are apprehensive about making plans”.

For Arras particularly, Ed noted the fantastic support that the brand receives from Accolade. Tasmania is still their focus, but related brands such as Grant Burge source from elsewhere. The USA has been excellent for sales though there have been issues with the UK since they imposed various pest control measures. Arras has never not met any such restrictions, but sparkling is a long term game, and the goalposts can be shifted several years after

Jansz Vineyard

production but before the wines hit the market. They will work through this shortly. One of the reasons for optimism in the UK is that, despite the recent success of their own sparkling industry, it cannot produce anything like enough fizz. Obviously, prosecco and cava play an important role in filling the market below champagne, but top Aussies can also carve more than a niche, especially as the best from Tasmania are proving to have stunning longevity.

Arras has long term plans to increase production. Last year, they purchased a new vineyard at Richmond in Tasmania. Ed is extremely excited about the 2013 vintage, about to be released. He sees that vintage as when they finally got serious and put the peaks and troughs of the past behind them. And it was a great vintage – previous top years were 2004, 2006 and 2008, with those to come – 2014, 2015 and 2017. The 13s have now had 7-8 years on lees, which Ed sees as the “sweet spot” for his wines.

Arras will also start numbering its cuvees, as we have seen with Jacquesson, Krug and now Roederer. They will also put disgorgement dates on their LD. There will also be a couple of new rosés released, and they are putting some serious work into magnums, which are ideal for the long term. For now, it is “fine-tuning and building volume”.

The appreciation for what Tasmania offers is not restricted to Arras. Quite a few local wines rarely make it off the Island, but Jansz is another highly respected maker of Tassie fizz. As winemaker, Jen Doyle, says, “we are really excited to be a part of the energy and enthusiasm that reflects the current Tasmanian wine-growing climate, and particularly around the quality of the sparkling wines”. In the ultimate act of money-where-your-mouth-is, Jansz has recently opened their Pontos Hills Winery in southern Tasmania. Both Jen and marketing manager, Christine Phillips, noted how popular their rosé has become. Christine is also experiencing the “lift in sales” of sparklers during the various lockdowns. She says that it is “encouraging to see people are still finding their moments of celebration and treating themselves to affordable luxuries.”

CHAMPAGNE

Eric Thomson, Marketing Director from Pernod Ricard, has unparalleled insight into the champagne market in Australia. He advises that the “Champagne category has been experiencing unprecedented demand across Australia” and notes that it is driven by “a number of factors including evolving consumer trends and drinking habits… the impact of no international travel and temporary closures of on-premise venues, which has resulted in consumers trading up in other categories like Champagne. In addition, the frequency of Champagne occasions has increased (+11%), as well as the number of Champagne occasions at home (+10%)”. He is aware of the problems they are facing. “There is no doubt that Covid has triggered ongoing supply chain challenges and delays, which we are still feeling the effects of. However, we are confident in our ability to manage this for the short-term and our ability to meet champagne demand for the long-term.”

RETAIL TRENDS

Providing the retailer’s perspective, Phil Stanton of the Wine Emporium in Brisbane, one of the country’s leading sparkling merchants, said, “what we’ve seen since the beginning of Covid is an upward trend in terms of price per bottle paid – all the high-end stuff just flies off the shelves! With people unable to travel much, I think they’re trying to scratch that itch by buying experiences.” Phil noted that was good news for champagne, but he has not seen it translating quite so much to the Australian sparkling industry. He detailed some of the very many wonderful local sparklers. He put the discrepancy down to “a possible lack of consumer education or maybe there’s still a ‘stigma’ attached to non-champagne bubblies”.

I wonder if it might be more than the Emporium is so closely associated with sales of champagne that perhaps this is where many turned. They might not think to go

I suspect that their publicity blurb noting that “Prosecco is the fastest growing white wine grape in Australia” might have been a small but telling slip.

here for other fizz. When figures suggest that sales of Tasmanian sparklers exceed the general sparkling market by 27%, someone is selling the stuff.

PROSECCO’S PACE

Where there is also undoubted interest is with prosecco (we’ll hold off on the Aussie/ Italian debate for the moment), increasing by 17% or 30% per annum (depending on from where one sources figures) at the moment. 74% of sparkling drinkers include prosecco in their rotation, as do 34% of wine drinkers. Brown Brothers, now Brown Family Wine Group (allow us to go with BB), is Australia’s biggest seller, sales increasing at breakneck speed. Their Prosecco Rosé has been extremely popular, sales growing far in excess of the industry average. It appeals to a younger demographic and should have the long term advantage of delivering a future clientele to BB for their wide range of table wines. BB has also introduced Prosecco Ultra-Low, an almost-alcohol-free version, as well as their ‘Light’.

BB has positioned their proseccos as suitable for everyday drinking, especially in summer, rather than just for celebrations. They have the great advantage of representing excellent value, especially in comparison to champagne. They have even taken to offering 250ml cans. Politicians don’t get much right, but in allowing BB to operate as normal through Covid as an ‘essential service’, we can give them a tick. As winemaker, Geoff Alexander, says, “we have been incredibly fortunate”.

The region in Italy from where prosecco hails is a very beautiful region and one that every wine lover should visit – terrific wines, great food, fabulous villages and history at every turn. Time your visit with the white asparagus season.

Strange or, perhaps, but more perfidious, depending on one’s perspective, is the battle to exclude Australian producers from using the term ‘Prosecco’.

Prosecco is Italy’s most popular sparkling wine, though not its only one (Franciacorta offers some superb sparklers). This popularity often sees it compared to champagne, though they come from different varieties and different methods. Their advantage comes from their pricing. From the Veneto region, in particular Valdobbiadene, it is in general, a DOC level wine, however, the best are considered to be the Valdobbiadene Superiore, which has achieved DOCG status, Italy’s highest level, as well as Asolo Superiore, Valdobbiadene Superiore Rive and Valdobbiadene Superiore di Cartizzi. They are made from the prosecco grape, which the locals now claim is actually called glera. Worth noting that when I visited the region, there was nary a mention of glera. It was all ‘prosecco’.

Why the change? Locals were annoyed that prosecco was being made elsewhere around the globe and they looked for an end run to prevent it. So they decided the region was ‘Prosecco’ and the variety was glera, which meant, under existing legislation and agreements, that other regions could no longer use the name ‘Prosecco’. Use the variety – no problem; use the region – not acceptable. A GI can be protected, but a grape variety cannot. It is nothing but a bureaucratic three-card monte, and personally, I’m delighted to support and drink any local producer sticking with ‘Prosecco’.

To update, the early efforts, in 2013, of the Italians failed to have Prosecco registered as a GI, confirming that Prosecco was known as a grape variety before 2009, which was when the EU attempted the deception. Not content, the Italians had another crack in 2018 during free trade negotiations. Italy was insisting on the name as part of the deal. In 2020, the Australian government-funded Monash University to investigate the legal basis of including GIs in trade agreements. The conclusion was that to do so would contravene World Trade Organisation rules. So for now, we can make, sell and drink Aussie Prosecco, but you can bet that the battle is far from over (meanwhile, Champagne has its own problems with Russia causing havoc with changes to labelling laws – another battle to watch). The exploding market, domestically and internationally, makes this an extremely important dispute, one that winemakers in King Valley especially need to win.

While I am sure that they don’t agree with me on the use of the term, Italian producers are taking advantage of the increased popularity of Prosecco to offer their wines here (I love the idea of this all being decided by the consumer – if they prefer the Italian Proseccos, so be it). San Margherita is one example, and they are offering proseccos from the pinnacle of production (I suspect that their publicity blurb noting that “Prosecco is the fastest growing white wine grape in Australia” might have been a small but telling slip). They represent compelling value.