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In 1914, the Financial Times reported with “interest and great encouragement” that even the war that was then beginning could not damage the champagne industry. More than a century later, a product that was once considered invincible even at times of such turmoil now faces skirmishes on all sides — and it has no sure defences against them.
Having risen steadily since the turn of the century, champagne sales plunged when the financial crisis hit, and the market has taken another turn lower in the past year as Brexit has weakened the pound and left a dent in the UK, the industry’s number one export market. Champagne houses used to competing solely with each other are now vying with prosecco and sparkling wine makers for market share. And climate change has savaged harvests, forcing growers to search for new varieties of grapes and growing techniques.
“The whole champagne market is under pressure this year,” says Rowan Gormley, chief executive of UK retailer Majestic Wines. “The total market is down 17 per cent year-on-year in volume over the past three months.” Much of this is due to Brexit, analysts say: the pound has fallen 16 per cent against the euro since the referendum, pushing up prices for importers. The total market for champagne is worth €4.7bn, of which the UK now accounts for €440m — a 14 per cent slide on last year, according to the Comité Champagne, the industry’s trade association.
“The average price per bottle for us has risen 10 per cent,” says Jon Pepper, retail director at Enotria & Coe, the UK’s largest premium wine importer. “It’s driving people at the cheaper end of the market to different products.” Both consumers and businesses have scaled back their buying — sales at restaurants are down 11 per cent in the last year, adds Mr Pepper.
Extreme weather has not been helping those growing grapes, but it is at least driving scientific advances.
“We’d had four consecutive years of frosts and hail — it’s bizarre, and we’re feeling the effects,” says Nicolas Laugerotte, the head of small champagne house Dosnon. “I’ve lost 50 per cent of my harvest, and I’ve had to buy grapes from other vineyards in parts of the region that have been less badly affected.” The French government has said that frost in April 2017 will cut wine production by 18 per cent on last year.
Warmer weather means vines bud earlier in the year, which leaves the grapes vulnerable to biting spring frosts. Rising temperatures also cause the grapes to produce more sugar, more alcohol and less acidity — vital to the crisp flavour of the finest champagnes.
Climate change threatens the very taste of champagne, and the industry has been forced to act. It has started to shrink its carbon footprint — the average weight of an empty champagne bottle has fallen from 900g to 830g, and the level of CO² released per bottle made is down 15 per cent, according to the Comité Champagne. It is also researching new varieties of grape that can withstand higher temperatures and disease.
“This is a crucial initiative and is meant to help us keep the style of champagne,” says Thibaut le Mailloux, communications director for the Comité Champagne. “The key challenge is to adapt; climate change has already started, and it is affecting champagne production.”
The value of British imports of champagne, down 14 per cent
The committee is blending the three most popular grapes in champagne — chardonnay, pinot noir and pinot meunier — with other “super-geniteur” grapes that can resist higher temperatures and repel disease without the need for insecticide. Starting with thousands of seeds, the Comité will cross the standard grapes with the resistant varieties to create a hybrid that will ripen more slowly in warmer climates and carry resistance to mildew and other diseases. After 15 years of experimenting, it will select four or five varieties that it hopes will carry the resistant genes while retaining the flavour of champagne. It will then have to seek a certificate of origin before it is grown, aged and tasted.
“We won’t see any results before our retirement,” says Mr le Mailloux. “Basically, we’re working for our children. We’re pioneers.”
Adding to the Brexit and weather woes of the Champenois has been the rise of competitors. Spiros Malandrakis, senior drinks analyst at market research company Euromonitor, recalls giving a talk at a champagne conference in 2010. “I highlighted to the audience that they needed to fear competition from adjacent categories — that a more affordable category without the baggage could undermine their dominance,” he says. “They laughed at my point, but now things have changed massively, and they’re trying to catch up.”
Total sales of English sparkling wine, a nascent champagne rival
In particular, prosecco has advanced since 2008, and English sparkling wine has made serious gains. Production of the latter has doubled in the past five years, according to UK government figures, and sales are £82m per year, says the UK Vineyards Association. At Majestic Wine, sparkling wine from other regions of France is up 141 per cent in the last year. Many champagne houses are now unsure what to think.
“Your first reaction is, ‘Oh my gosh, people are coming into the category,’” says Paul Beavis, managing director at Champagne Lanson. “But there is enough room in the marketplace for sparkling wine and champagne . . . People’s taste does develop as they grow older — they start with a sweet palate and then graduate to other, more sophisticated tastes.”
English sparkling wine in particular has piqued the interest of the industry. With cheaper land than in France, and rich, chalky soil — vital for the high acidity valued by drinkers — England is proving a profitable place to grow wine.
Some in the industry refuse to accept that English sparkling wine poses any long-term threat. But in 2015, Taittinger bought 69 hectares of land in Kent — the first champagne house to do so — and plans to release its first batch of sparkling wine in 2023. “It’s the garden of England, it’s the natural place to plant,” says Patrick McGrath, managing director of Hatch Mansfield, the UK agent for Taittinger champagne.
English vines will not suffice for maisons if negotiations between the UK and EU break down, however. “A trade deal is crucial,” says Mr McGrath. “It’s such a large export market, and still the most popular.”