Champagne market woes far from over in 2013

From The Reims Management School:

Reims Professor Predicts Another Flat Year

The Eurozone crisis has significantly impacted the Champagne market, which has seen worldwide year on year shipments down 6.5% in the first half of 2012. And experts fear that year-end results will reveal an even more difficult year than 2011, especially as the countries most affected by Europe’s economic downturn are also the largest markets for Champagne. Indeed, 80% of shipments were destined for the Eurozone.

Will the Champagne market recover in 2013?

Economists have not excluded the idea of a global economic recovery in 2013, but Steve Charters, Director of the Chair in Champagne Management at Reims Management School, predicts a rebound for the Champagne market not before 2014 or 2015.

Champagne as an economic indicator

“Champagne is a reliable indicator of the state of the economy,” said Charters. “Sales of Champagne can be directly measured against changes in consumption and they are currently reflected by the economic crisis in the Eurozone. As with all previous crises which have seen poor sales, the question is how long this crisis will last. The 2008 recession was quite short thanks largely to Asia propping up the rest of the world economy. Following this logic, the Champagne industry had the good intuition to target Asia’s emerging markets.

“However, Champagne is still highly dependent on developments within Europe and it is there that the answer will be found. How long will the downturn in Europe last? None of us has a crystal ball, but considering what we have seen in 2012, it is unlikely that Europe will see any growth in 2013. The Champagne market will not recover before 2014 or 2015. Looking back, the poor sales of 2012 are far from over and even suggest the figures resembling those of 1991.”

Long-term challenges

According to Charters, Champagne’s long term prospects will depend on its ability to adapt to this succession of crises.

“Champagne makers know they must diversify their exports, which explains the development of emerging economy markets. But not all Champagne makers are able to diversify enough and a number of them will have to find a way to improve their European sales. In this case, the image of Champagne tends to deteriorate gradually in these markets while other sparkling wines are upsold. In the long term, we could very well imagine the emergence of a competitor, one that would necessitate the Champagne industry to change the way it operates.”

About Steven Charters

Dr. Steve Charters MW, MA (Oxon), PhD (ECU) is Professor of Champagne Management at Reims Management School in France. He develops research and courses relevant to the champagne industry and wine business in general. He is also Director of the Reims Research Centre for Wine-Place-Value. His research focuses on the relationship of wine to place, including terroir, the mythology of place and how it becomes authentic, as well as wine tourism. He is also interested in aesthetic products, drinker perceptions of quality in wine, and the motivation to drink. Steve has worked in the wine industry in Australia and formerly taught at Edith Cowan University in Perth, Australia. Steve is a member of the editorial board of the Journal of Wine Research, the British Food Journal and the International Journal of Wine Business Research. He is the author of The Business of Champagne: a delicate balance (Routledge, 2011).

About Reims Management School (RMS)

Accredited by AACSB (Association to Advance Collegiate Schools of Business), EQUIS (the European Quality Improvement System) and AMBA (The Association of MBAs), Reims Management School (RMS) is ranked among the Top 10 business schools in France and the Top 20 in Europe. In addition to its Grande Ecole programme Sup de Co Reims”, RMS also offers 3 post-degree business schools: Cesem, Sup’TG and Tema. These schools also include 2 Masters of Science programmes, 6 specialized master’s programmes accredited by the CGE (Conférence des Grandes Ecoles) and an International full-time and part-time executive MBA. In 2009, the Paris Executive Campus, a joint venture with Rouen Business School dedicated to executive education, offered 3 part-time Masters Programmes, an executive MBA and a continuing education programme. Both Reims Management School campuses educate over 4,000 students, of which 900 are international. Reims Management School has a network of over 150 partner universities in 40 countries and more than 23,000 alumni from around the world, grouped within the RMS-Network Association (www.rms-network.com).