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MENAFN - AFP - 14/02/2013

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(MENAFN - AFP) Times are tough but everyone still needs a little sparkle in their lives.That's the message from the bubbles industry's latest figures, which indicate champagne sales are going flat while more affordable upstarts like prosecco continue to fizz thanks to a trend towards everyday indulgence.For rap stars and Premier League footballers, it still has to be Cristal. But for many ordinary consumers, even in France, cava will do just as well to get the party started."Champagne was dominant 10 to 15 years ago, but the world has changed," said Jean-Philippe Perrouty, director of drinks analyst Wine Intelligence (WI)."In a nutshell, Champagne now has at least two very strong competitors -- sustainable competitors."Although exports of champagne, which can only be produced in the region of the same name in northern France, grew slightly (3.4 percent) in value terms last year, the number of bottles sent overseas fell 2.8 percent.That performance is in marked contrast to the much stronger upward trend in demand for sparkling wine as a whole, illustrated most pointedly by a 34-percent surge in the value of exports of prosecco and other premium Italian sparklers in the first nine months of last year.Champagne is also lagging behind the strong export growth of still wines from Bordeaux and Burgundy and upmarket French spirits Armagnac and Cognac.Even on home turf, the king of sparkling wine is looking ready to abdicate its crown, with sales down five percent in value terms in a market into which foreign competitors are making inroads.France, Spain and Italy supply 80 percent of the world's sparkling wine, but demand has been buffeted by economic headwinds in the traditional European and US markets."The prolonged economic downturn in these economies has played havoc with demand for sparkling wines, channelling consumers downmarket," Food and Agribusiness analysts at Rabobank said in their quarterly wine report, published this month.Searching for lower-priced bubbly, consumers have turned to prosecco, mostly made in the foothills of the Alps in northern Italy, and to cava, the bulk of which is produced in Catalonia.Cavas generally retail for under eight euros (10.75) a bottle in most European markets while prosecco ranges from 5-15 euros, with only its top wines coming close to the price of entry-level champagne."Prosecco and cava are seen as affordable luxuries. They have turned sparkling wine into informal, more frequent consumption, but they are also able to compete with Champagne at the fringes of the Champagne market," said Perrouty.Freixenet produces 200 million bottles a year -- not far off the 309 million bottles shipped by the entire Champagne region in 2012, and 80 percent is sold on export.It is a market leader in the UK and in France, it now the joint third biggest selling brand of non-champagne sparkling, a sector that accounts for 70 percent of the market."It's in our DNA to push into new markets," said Philippe Laqueche, general manager of the cava producer's French subsidiary Yvon Mau. "We're recruiting new consumers and making the market grow."This same trend has taken root in America with prosecco's relatively low alcohol level helping fuel more 'everyday' consumption of sparkling wines.The thirst for bubbly has encouraged vintners to search out new terroirs, from Moet Hennessy's new Chandon wineries in China and India to smaller start-ups in the south of England."The market for English domestic sparkling wine is growing 10 percent a year," said Perrouty.The only glitch is the weather -- both 2011 and 2012 had disastrous growing seasons, leading one producer, Nyetimber, to decide against releasing a 2012 vintage. But consumers are loyal and thirsty -- in 2011, English sparkling topped 1.5 million bottles."We sell out of everything we make," said Christian Seely, co-owner of Hampshire-based Coates & Seely, with an annual production of 30,000 bottles and a vineyard with soil that mirrors Champagne.Already selling to Britain, Canada and Scandinavia (at champagne prices), Seely plans to triple production within a few years. "You can make a world-class sparkling in England," he said. "I'm very bullish on the whole venture."While the big champagne brands may have lost their lustre in traditional markets in 2012, it's not all bad news for the French heavyweights, according to Rabobank.Young, wealthy consumers in emerging markets like Brazil, Russia, Nigeria, Mexico and China are thirsty for the luxury brands bottled in the Champagne capital Reims, although China has only begun to take off."Consumption of sparkling wine in China is still quite low compared with other BRIC countries like Brazil (seven times bigger than China) or Russia (60 times bigger)," Gil Serra, area manager for Freixenet in China, told AFP."We think the real potential for sparkling wine consumers is with the young professionals, which perceive sparkling as celebration, prestige, sophistication, relaxed atmosphere and friendly gathering."With the Chinese palate preferring sweeter styles like Italian Asti, Australian moscato and cava semi seco, corks are mostly popping in nightclubs and karaoke bars."Cava is showing some positive signs in certain type of night clubs and trendy bars. Keep in mind that champagne's main sales channel is high end night clubs, hence it would make sense for cava to follow this trend," said Don St. Pierre JR, executive chairman of ASC Fine Wines in China.

 






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