The bubble factor
According to the International Wine and Spirits Record (IWSR), overall volumes of champagne in travel retail and duty free between 2001 and 2005 declined by 9.4%. This is not particularly good news, especially when domestic sales of the bubbly stuff saw volumes boosted by 10.6% – again according to the IWSR.
And yet, champagne producers do not seem to be overly concerned by these figures. Nicolas Feuillatte sees its position in travel improve with high growth experienced with its international partners, such as Aelia and Gebr. Heinemann, and is even gearing up for a further extension of its reach through a new listing with The Nuance Group. Although overall volumes may have decreased, its customers have been concentrating on developing a premium proposition, which has more long-term prospects for growth, and the only concerns the French producer sees are the new security measures and the limit imposed on liquids.
According to Olivier Cavil, communication director for GH Mumm/Perrier Jouët, “Travel retail is more than just a distribution channel – it is first and foremost a means of communication, a window into the brand. Travel retail has always had an image of tax-free luxury.Champagne is a luxury product, therefore it naturally belongs in this environment, particularly as it is in contact with that segment of the market that lifts the whole category up: the high quality, travelling customers.”
However, Cavil stresses that any potential development in travel retail cannot undermine a brand’s value. Champagne has that special appeal because it is more expensive than sparkling wine, and it is because of its premium positioning that the magic still surrounds the category.
This is something Pernod Ricard – the new owner of Mumm and Perrier Jouët since the acquisition of Allied Domecq last year – is very much aware of in its bid to increase market share and brand profile in travel retail. “Our efforts go towards a strategy that brings together elements such as developing value, developing recognition and brand image, the ‘premiumisation’ of our brands and the support of the brands’ position in domestic markets,” says Cavil.
As for the decrease in volume, Cavil is not particularly concerned. Due mainly to events such as the terrorist attacks in the US in September 2001, followed by SARS in Asia and the recent regulations on liquids, a category based on self-gratification and luxury was bound to suffer. Nevertheless, Cavil believes that there will be growth in travel retail, just not where people might expect it. “We believe that growth will mainly be in value and not volume. It is up to us to bring to the fore more premium cuvees in these outlets specifically (offer Millésimes more systematically, for instance). We have to bring added value to this channel in terms of richness of the portfolio.”
Not that champagne producers have much choice. The area dedicated to the production of champagne is not expandable and this is resulting in more emphasis being put on rarity in a highly competitive market. “We have to bring the consumer towards more complex cuvees and educate him on those while creating more value for our brands on a global basis.”
Delicious
Digg
StumbleUpon
Facebook
