Champagne: Nigerian Chic and European Doldrums
I can still hear the collective gasps filling the cavernous conference room by the end of my keynote presentation in this year's Champagne Assembly in London. The attendees, an eclectic mix of brand ambassadors, journalists and aficionados largely agreed with Euromonitor's findings. Champagne had historically not only provided a rather accurate mirror image of the prevailing macroeconomic environment, the category actually appeared to precede the boom and bust cycles - a fact making it the proverbial canary in the coalmine, raising the alarm before an upcoming downturn.
The conference took place in March 2012. Incidentally, Champagne's slowing performance in the UK in 2011 already underlined the heightened probability of the dreaded double dip scenario. This particular forecast would materialise a couple of months later.
The audience also seemed to support the suggestions that rose varietals, growers' offerings, and vintage launches will increasingly inform the industry's future direction, while quietly acknowledging other sparkling wine's cannibalising ascend and the rising threat of its aggressive competition.
However, what did come as a surprise was Nigeria's second place in these global rankings, and the audience's disbelief was palpable. No-one challenged the data directly and yet many seemed to politely take it with a grain of salt - if only in the light of the dominant, overoptimistic analytical perspective that sees the European debt-crisis saga coming to a happy ending by the end of 2012. Why bother with Nigeria anyway if Europe was about to start popping bottles again in the immediate future?
It did not. By September 2012, Western Europe, champagne' de facto bastion, is still struggling with debt, austerity, unemployment and existential questions. In France, heavy rain, destructive hail storms, late frosts and vine disease have lead to the smallest harvest in 20 years according to the CIVC. Production costs and grape prices are stratospherically higher while price hikes in western markets are out of the question. The UK is officially deeper into double dip territory.
And Charles Armand de Belenet –Global Marketing and Communications director at Pernod's GH Mumm and Perrier Jouet Champagne brands - said that “Nigerian Champagne consumption is quite big '' adding that “we are building our network here and it is one of the most attractive places for us at the moment”. The moment is finally here.
Shipments, baths and apps
According to Euromonitor International, global champagne sales are set to register 2% total volume growth in 2012. Nevertheless, such a growth rate - as uninspiring as it might look- is actually much closer to reality than the seemingly booming shipment figures paraded around the press by the PR departments of key champagne houses. And it gets worse.
Considering the deteriorating operating environments across the European periphery and the emerging cracks, even within the once unyielding Eurozone core, ostentatious consumption appears to be increasingly out of synch with the zeitgeist - not exactly good news for a category that is generically identified with luxury.
On the other hand, innovation remains limited. Beyond the short-sighted, counterproductive, essentially devaluing and eventually backfiring champagne baths that recently re-emerged as a fad with a distinctly bad timing, artist collaborations dominate new launches. While David Lynch's signature does provide some artistic kudos to Dom Perignon with their recent collaboration, it is GH Mum's I-Phone App “on how to be a gentleman with champagne” that really strike a chord.
At the end of the day, a fresh focus on a stronger social media presence along with a more forward looking and groundbreaking approach to new product launches are the only routes available for the champagne industry in mature and financially volatile European markets. Beyond that, avoiding generic, unimaginative and half-hearted innovation ventures in the west while entering the BRICs as well as second tier emerging markets should not be viewed as a surprise anymore. It is now a necessity.
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