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Noble bubbles
In 1975, total exports of Champagne were 28m bottles. With only 100,000 bottles, the share of prestige cuvée was then a mere 0.4%. Today, that number hovers near 5% and amounts to six million bottles. Still, in spite of the price, demand for top brands like DomPérignon, which some analysts believe may account for as much as half of this market, far exceeds production. Its only true competitors on the luxury market are Krug and Roederer Cristal Champagnes, both of which are produced in far smaller quantities. The story about Father Pierre Pérignon taking over as cellar master at the Benedictine Abbey of Hautvillers in 1668 has often been told. Few would deny that his visionary spirit was instrumental in transforming the history of wine nor that he is the spiritual father of Champagne. However, the famous Dom Perignon bottle and brand as we know it today has only existed since 1936. Richard Geoffroy, Dom Pérignon’s chef de cave writes on the Internet site that “If a harvest does not meet Dom Pérignon’s unyielding standards, there will be no vintage champagne that year. This isn’t a value judgment – it’s an aesthetic vision.”
However, market demand, which is what sustain brands, does not always work by the same principles. In the past, fewer vintages were declared. As worldwide thirst, and the ability to pay for luxury have grown, so too have the constraints on the winemakers. Although the company famously does not want to discuss figures or markets, industry analysts consider that somewhere between 300,000 and 350,000 cases are sold each year, or three to four million bottles. With demand growing, it is expected that those numbers will continue to rise. Given the fact that it does not cost a great deal more to produce a bottle of Dom Pérignon that one of Moët & Chandon, but that the former costs several times the price of the latter, it is understandable that a publicly traded company wants to maximize profits by increasing Dom Pérignon’s production.
Unclear however, is how high quantity can go before there is a backlash in the market, given that part of luxury’s appeal is its rarity. In that light, it is understandable that Dom Pérignon stays tight-lipped about the volumes it produces. The US, which uncorks 1.8m bottles of Champagne each year, accounts for almost a third of total prestige cuvee exports. Japan follows with nearly 1.3m bottles; but compared to total shipments of only 6m bottles, market share for the finest bubbly is high there. One in five bottles consumed by the Japanese is of noble pedigree. For Dom Pérignon, Japan is the single largest export market, larger even than the United States, which takes second place. For the English, on the other hand, who still rank third in the charts on total volume of prestige cuvée, only one in fifty bottles is of higher pedigree. Dom Pérignon is doing well there, but nevertheless |
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sells even more bottles to Italy. According to the company, which was reluctant to disclose any information whatsoever, India and Eastern Europe are currently the two fastest growing markets. For brands like Dom Pérignon, the market appears to still have a lot of potential for growth.
New clothes
During the Second World War two Portuguese wine producers showed a flair for packaging commercial pink wines that continues to pay dividends today. In 1942, Mateus borrowed a traditional German bottle shape and the image of a palace that was quite unconnected to the wine and launched a rosé; in 1944, Lancers came with a similar wine in a mock ceramic ‘crock’. Both concepts aimed to create popular wines from difficult grapes. In the case of Mateus, which is mostly produced in Bairrada, this means using Baga, an interesting, but tricky varietal. Created as a medium sweet sparkling rosé, Mateus appealed to both the North American and northern European palates. Production grew rapidly and by the late 1980s accounted for over 40% of Portugal's table wine exports. At that time, when the brand also contained a white member, world-wide sales were estimated at 3.25m cases per year. Today, Mateus and Lancers still dominate the market for Portuguese rosé, but volumes have declined. With a total production of 20m bottles, which are sold in more than 120 countries worldwide, Mateus is the larger of the two. Currently more than 85% of that volume is exported, with Europe alone accounting for 60% of total sales. The UK, which registered significant growth last year, is with 26% the largest single market, but Spain (14%) and Portugal (13%) also weigh in so heavily that the three together make up more than half of all sales. Next are Germany, Italy and Denmark. Mateus does not enjoy top dog status in all markets. In the US, where Mateus sell for about $4 per bottle, Lancer’s is the larger brand. In the UK, where Mateus is number one, Lancers is almost never seen. Mateus is Portugal’s leading brand, growing by 9.6% in volume and 10% in value in 2006, in line with their global performance of 8% growth in volume and 9% in value. Although part of the original appeal was the bottle, Sogrape Vinhos, the brand’s owners, recognised that the wine had to be renovated. This resulted in a 2002 re-launch and re-positioning of the brand. As part of the sixtieth anniversary celebrations, a more traditional bottle was introduced under the banner “Taste Matters”. Although the owners see Mateus as a ‘pink European brand’, they have enlarged it with new varietals such as a Spanish Tempranillo and shortly thereafter a French Syrah. While much has changed, the company is proud of the consistency of its quality throughout the years. They claim the only difference since in Mateus Rosé since its inception is the winery in which it’s made.
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