Champagne Sales Feeling Effects Of Weak Dollar
New York, NY (AHN) - Champagne sales are nothing to toast to this year. Makers of the bubbly are reeling from the sour economy and feelings its effects. Makers of both inexpensive sparking wines and expensive bottles are feeling the pinch following 2007's strong 4 percent gains, the biggest since the buying frenzy in 1999 to ring in the new millennium.
Nearly 21 million bottles were shipped to the United States from the region of France known as Champagne in 2007. Through August, sales were down 17 percent over the corresponding period last year, according to Sam Heitner, director of the Office of Champagne U.S.A., a trade organization, and that doesn't include the last three months of the year, when much of the Champagne is sold.
"I don't have a bright outlook for champagne this year," says Frank Walters, research director for Impact, which expects the category to be down 1 percent to 4 percent, from about 900 million glasses sold in 2007.
"Luxury items are getting hurt, people are looking for value, restaurants are getting clobbered and with unemployment rising, people are watching their shekels."
People are clearly trading down," says Jon Fredrikson of Gomberg, Fredrikson & Associates, a wine industry analyst in California in a New York Times report. "People are still drinking wine, but it's clearly at lower price points."
Analysts give some of the following reasons for the marked drop off in champagne sales:
Consumer spending declined 60 percent from late October to January.
An early Thanksgiving gave champagne makers five fewer days than last year to get products into stores.
Many domestic sparkling wines are called champagnes even though the grapes don't originate from the Champagne region of France, thereby making inroads into the legitimate champagne sale industry.
General shortage of celebratory occasions like mergers, closings, bonuses and office parties.
Emotions are also playing apart in the decline many restaurateurs say that customers are avoiding even the appearance of celebration .
"People just don't want to look extravagant today," said Paul Grieco, an owner of Hearth, Insieme and Terroir in Manhattan. "They still want to drink, so they cut out the Champagne and go directly to whatever they're drinking with dinner."
Marketers for Martini & Rossi Asti Spumante, which sells for $10 to $13 a bottle, are focusing on store shelves to create a turnaround and sell their product. "We want to make sure our brand is there for consumers to see when they shop," says Celio Romanach, Martini & Rossi's brand managing director.
Luxury brands are vying for the attention of the still-rich with super-expensive products. Mo & Hennessy bundled its bubbly with high-end gift boxes and packages including a Dom P ignon Power Trio, a boxed set of three Dom Perignon vintages with a price tag of $1,500
For its Piper-Heidsieck Rare, R y Cointreau USA introduced a collectible bottle designed by a high-end French jewelry maker, spokeswoman Marie Christina Batich says in a USA Today report. "Our consumers understand the value of our product."