Bubbly Booming: The U.S. Becomes Champagne’s Top Export Market

The Champagne category is bubbling over in the U.S. market, driven by a dynamic premiumization trend. With per-case value up 20% to over €300 ($334) last year, the U.S. overtook the U.K. as Champagne’s top export market by value in 2015. Champagne shipments to the U.S. leapt 28% to €515 million ($573m) for the year, surpassing the U.K.’s total of €512 million ($570m), which itself represented a 7% bump. U.S. depletions, at 1.4 million cases last year, remain shy of their 2007 total of 1.6 million cases, but shipment value has surged by nearly 60% since 2010, according to Impact Databank. A slide in the euro—whose value against the dollar is down by about 20% over the past two years—has helped to stoke growth.

From 2010-2014, Champagne’s value on a per-case basis rose a respectable 10% in the U.S., adding around $25. But in 2015 alone, it more than doubled that incremental growth, tacking on about $55 in value to the average case of Champagne. Price hikes and a stronger emphasis on higher-end bubblies are both contributing to the dramatic rise in value.

Piper-Heidsieck, which transitioned from the Rémy Cointreau USA portfolio to Terlato Wines last July, is employing both of those tactics. Piper is extending with a Rare Rosé this year, which will be priced at a premium to prestige cuvée Rare Brut, becoming the brand’s highest-priced offering. While looking to increase its high-end sales, Piper has also taken price hikes on its core Brut non-vintage. “Previously you’d sometimes see the Brut as low as $29.99 on the shelf. Over the holidays last year the average was above $39.99, which is a nice move in the right direction,” says Terlato CEO Bill Terlato.

The third-largest Champagne in the U.S. market, Pernod Ricard’s Perrier-Jouët, is seeing strong results for its prestige cuvée Belle Epoque, which sells above $150 a bottle. “The on-premise is back on a healthy trend and it’s a key driver for our portfolio,” says Aygline Pechdo, brand director for Champagnes at Pernod Ricard USA.

Meanwhile, market leader Moët Hennessy USA continues to enjoy impressive progress with the dynamic duo of Veuve Clicquot and Moët & Chandon, which dominate the category with a combined 60% share. Portfoliomate Dom Perignon is also among the top five Champagnes in the U.S. in volume terms—totaling nearly 60,000 cases annually—despite a retail price above $160 a bottle.

Fourth-ranked player Nicolas Feuillatte tells SND it’s focused on expanding Champagne into new consumption occasions. “We’ll be launching new advertising and social media campaigns this year which support our vision for the future of Champagne as more modern and accessible,” says Feuillatte’s Americas export manager Olivier Zorel.

U.S. - Top Six Champagne Brands (thousands of nine-liter cases)
			Depletions			Percent Change3
Rank	Brand	Importer	2013	2014	2015	2013-2014	2014-2015
1	Veuve Clicquot	Moet Hennessy USA (LVMH)	383	415	453	8.3%	9.3%
2	Moet & Chandon1	Moet Hennessy USA (LVMH)	354	369	382	4.1%	3.6%
3	Perrier-Jouet	Pernod Ricard USA	71	71	80	-0.3%	11.8%
4	Nicolas Feuillatte	Ste. Michelle Wine Estates	67	68	68	1.5%	0.0%
5	Dom Perignon	Moet Hennessy USA (LVMH)	56	59	58	5.2%	-1.7%
6	Piper Heidsieck	Terlato Wines International	51	45	42	-11.4%	-7.0%
Total Top Six2			983	1,027	1,083	4.5%	5.4%
1 excludes Dom Perignon 2 addition of columns may not agree due to rounding 3 based on unrounded data Source: IMPACT DATABANK

News Briefs:

•Italy’s Frescobaldi Toscana is launching its first rosé wine, which is debuting in the U.S. through Napa-based importer Folio Fine Wine Partners. Frescobaldi’s Tenuta dell’ Ammiraglia Alìe Rosé is made from 98% Syrah and 2% Vermentino. Some 300 cases from a total production of 1,750 cases are headed to the U.S. Alìe Rosé will be available nationally, retailing at about $18. The family-owned Frescobaldi Toscana is comprised of nine estates covering a total of 1,100 hectares (2,700 acres).

•Michter’s has announced plans to double capacity at its Louisville-based distillery this summer. Currently operating at its annual maximum of 500,000 proof gallons, the facility will temporarily shut down for a month for upgrades and maintenance before resuming production in August with a capacity of 1 million gallons. The move follows Michter’s decision to cancel the 2016 release of its US*1 Toasted Barrel Bourbon, due to an inability to keep up with demand. According to Michter’s distillery president Joseph Magliocco, liquid that would have been designated for Toasted Barrel will instead be used to produce the company’s core US*1 Bourbon, which is currently on allocation.

•Riboli Family Wine Estates has opened a new energy-efficient production facility in Paso Robles, California. The new winery will process the fruit from the company’s estate vineyards in Paso Robles and Monterey, with an estimated 50,000-case capacity for the upcoming harvest. The site will produce all of Riboli Family’s brands, such as San Antonio Winery, Maddalena, Opaque and San Simeon—including new flagship Paso Robles red Bordeaux blend San Simeon Stormwatch ($70)—among others. In addition to its California portfolio, Riboli imports Italy’s Stella Rosa, an Impact “Hot Brand” that grew 21% to 1 million cases last year.

•Phoenix, Arizona-based Prestige Brands Inc., created by former Alliance Beverage executives with the aim of creating a mid-sized, multi-state wine and spirits wholesale network, has acquired 75% of Arizona distributor TBK Beverage. TBK will now operate as Rebel Vinum & Rogue Spirits (RV&RS), and be led by Prestige partners Bob Smith, Fran Vivenzio and Kevin Smith, as well as TBK managing partner Tracy Uffelman. With a focus on smaller brands, RV&RS will handle California wines like Buttonwood, Diamond Ridge and Foxen; Washington wines like Abela and Badger Mountain; as well as craft spirits and beer. Prestige is also eyeing potential acquisitions in California and Washington. Bob Smith served as president and CEO of Alliance Beverage for more than two decades.

Craft Brewing and Distilling News:

•Hershey, Pennsylvania-based Tröegs Independent Brewing has released Nimble Giant, a new double IPA. Initially developed as part of the brewer’s small-batch Scratch Series program, the 9%-abv expression features Mosaic, Azacca and Simcoe hops and will be available in four-packs of 16-ounce cans across Tröegs’ 11-market footprint. Nimble Giant will also be sold in limited 16-ounce single cans, four-packs, cases, growlers, crowlers, 3-liter bottles and on draft at the brewer’s Hershey headquarters.

•The Bronx Brewery is set to launch a new limited release beer under its B-Sides series, Boom Boom White IPA. Billed as a balanced, dry-hopped white IPA with big floral and tropical aromas, the 8.1% abv brew will be available in select New York City accounts from July through August.

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