The arrival of Covid and the ensuing lockdown restrictions had serious repercussions in the hospitality sector and severely disrupted supply chains, particularly in the drinks sector. Champagne, one of the world’s most recognisable and exported wines, was severely hit by travelling restrictions – which initially impacted the luxury sector Champagne dominates – and the closing of on-trade outlets.
The 2020 slump
As a result, in 2020, Champagne sales plummeted; a 10% decrease year-on-year in March was followed by a 26% decrease in April and 32% in May compared to the same months in 2019. In contrast, the year yielded an outstanding harvest, in both quantity and quality, forcing producers to build up their reserves.
However, as Maxime Toubart and Jean-Marie Barillère, Co-Presidents of the Comité Champagne (CIVC), announced during a presentation of the region’s results for 2021, the recovery started even before the end of 2020. Although the sector had braced itself for losses of up to 40%, the year ended with a decrease of 18% in volume and 17% in value. This led to an outstanding and surprising recovery in 2021, with an all-time record turnover and highest number of bottles sold since 2011.
2021 – record-breaking recovery
A quick change in consumer behaviour and a prompt adaptability of market stakeholders allowed for a swift and expressive recovery as, into 2020, Covid restrictions became the new normal. An eagerness for smaller, domestic moments of celebration, the growth of high-end at home offering, and the maturity of e-commerce channels, allowed Champagne to reach both existing and new consumers. A total 320 million bottles of Champagne were sold around the world (an increase of 31% vs 2020 and 8% vs 2019), corresponding to €5.7bn, a whopping 36% increase from 2020. While Champagne’s domestic market remains strong, export markets led the growth with record numbers in the USA, the enduring leading export destination (+31% in volume expected from 2019). Other key markets, namely UK, Belgium and Germany, also consolidated their position. It was Australia, however, that registered the highest growth with an expected 53% increase in the number of bottles sold.
On the other hand, the year proved difficult from a viticultural point of view. The Champagne region was severely affected by frost, mildew and hail with yields not meeting the demand of the market rebound. On average, vineyards yielded 7,300 kg/ha, against the 10,000 kg/ha that would’ve been needed. Producers therefore had to rely on reserve wines to ultimately meet the demand of a newly revived market, highlighting the importance of reserves in a context of growing economic and climatic uncertainty.
Challenges ahead: A long-term strategy
Toubart and Barillère confirmed that the challenges growers, producers and Maisons faced in the last two years reinforced the need to outline a long term strategy for the appellation. It was absolutely necessary, according to them, to pose questions and implement changes both from a regulatory and viticultural point of view
The Comité therefore announced a strategy to ‘get Champagne ready for 2050’. Some of the plan’s key vectors are:
- Working towards carbon neutrality, with goals set at 25% offset emissions by 2025 and 75% by 2075.
- All vineyard area to be under one of three certifications (Organic, Haute Valeur Environnementale and/or Viticulture Durable en Champagne) by 2030.
- Redefine rules and regulations to preserve the quality and character of Champagne in the context of climate change. Details about which regulations might change in the near future were not provided but, when asked, Toubart and Barillère confirmed these might include changes to allowed varieties and the percentage they might play in blends.
- Extend and consolidate the legal recognition of the appellation, with special focus on the ongoing issues in USA and Russia
Growth in certified vineyard area towards 100% goal for 2030
Overall, Toubart and Barillère underscored a general sense of optimism, supported by the consumers’ retour à la joie de vivre. The capacity to adapt and overcome one the biggest economic and social crisis since WW II proved, they believe, the resilience of the sector. The challenge is, and will remain, delivering volume while keeping value and quality levels stable. If a great deal of work needs to be done in the vineyards there’s also much to be done to educate both consumers and the trade about what makes Champagne unique and about the fact that, much more than a wine, it is a region with a particular identity and heritage.
*All numbers provided by the CIVC – www.champagne.fr
