Put some fizz into your bizz

- Last updated on GMT

Related tags: Champagne, Chardonnay

With on-trade sales on the rise, Champagne isn't just for special occasions any more. Nigel Huddleston reports While the off-trade gets to grips with...

With on-trade sales on the rise, Champagne isn't just for special occasions any more. Nigel Huddleston reports

While the off-trade gets to grips with Woolworths selling Champagne for £5 and Asda running a £30 Dom Perignon promotion, sales of Champagne in the nation's pubs and restaurants are fizzing.

Figures from industry number cruncher AC Nielsen for the year to November show Champagne is the fastest growing single drinks category in the on-trade, with value sales ahead by 42% on a year earlier at £404m, accounting for 11.6% of all on-trade wine sales. Off-trade Champagne growth was just 9% in value terms in 2007.

The style bar and fine-dining boom has certainly had an impact on the on-trade's performance, but Champagne sales have been bubbling in the pub market too.

Chris Seale, head of Champagne at Pernod Ricard UK, which markets Mumm and Perrier-Jouët, says: "We have seen very strong growth and it has been across all sectors."

Champagne's public image used to be about City types swigging back the day's stock market profits, but it's managed to broaden and temper its appeal.

Lynn Murray, marketing director at Taittinger supplier Hatch Mansfield, says: "Traditionally it may have been more business people with expense accounts, but now it has extended to consumers out for a celebration with friends or family, and there is broader usage."

And Champagne is no longer the drink of birthdays and weddings, adds Seale. "It tends to be younger, more affluent consumers whose attitudes are different," says Seale. "They've grown up with Champagne and for them it isn't just about celebrations but about making any occasion special. It could just

be getting together with friends and ramping up the occasion to make it more memorable."

Not only are on-trade drinkers consuming more Champagne, they're paying more for it as well. Volume sales were ahead by 29% to 9 million litres, significantly less than the value sales rise. The blazing performance by the on-trade means it's chipping away at the take-home market's traditional stranglehold on the sector, with over half of the Champagne market by value taken by on-premises, and 38% of the volume. This compares with just 38% of value share and 15% of volume for the wine market as a whole.

Murray at Hatch Mansfield says: "As people have more disposable income they trade into aspirational and treatcategories like Champagne."

Category growth areas

Much of the growth seems to have come from other sparkling wines, which saw a fall of 24% over the same period in the on-trade, at a time when take-home sales grew by 8%. Even so, total sparkling wine sales (Champagne and other sparkling combined) were ahead by more than a fifth, the best performance of any category - including cider.

"The big growth we're seeing is in non-vintage and rosé," says Pernod Ricard's Seale, "but we're also seeing a lot of growth around more expensive styles at the top end of the market. It's taking gains from an awful lot of places. People are trading up from wine and groups of people are swapping out of categories like vodka for an occasion drink at the start of an evening."

Despite the boom in Champagne, it's clearly still a product that's not going to be a mainstay for every pub. But it is now bigger in the on-trade than blended or imported whiskey and closing fast on RTDs.

Seale says: "There's still a big opportunity around celebrations, especially for the pub market, and it should always be made accessible. But for most mainstream pubs it needs to be a well-known product, chilled and ready to go."

For gastropubs, the opportunity is broader. Seale says: "The food opportunity is quite niche - we are seeing some interest in that area, but it is more challenging than it would be for wine. We have been doing a lot of work with sommeliers in top-end restaurants with sparkling wine around fish, but the big opportunity around food is as an aperitif."

Pubs should also look to include Champagne and sparkling wine in their by-the-glass portfolio, according to Neil Bruce, wine category director for WaverleyTBS.

"People are starting to sell it by the glass but a few years ago you wouldn't have imagined it was possible," he says. "Now, with the technology available and the right sort of stopper you can open a bottle and it will be OK for two or three hours and that's really increased the opportunity for the pub market, and opened up the occasions."

Seale at Pernod Ricard says pubs have to appreciate the appeal of different styles of bubbly, and decide what suits their style best.

"There is a place for Champagne in all outlets," he says, "but it's not a one-solution-fits-all, though I would say stocking a rosé alongside a non-vintage is a must for the summer."

While other sparklers are struggling in the face of the Champagne onslaught, it's not all doom and gloom for its rivals. Waverley's Bruce says Italy's Prosecco is "absolutely on fire", after years of being predicted to do great things.

He adds: "Something like our sparkling blush Pinot Grigio from Trulli in Italy really ticks all the boxes, because it's in the three major growth categories in wine in the on-trade.

"You really need to look at sparkling wine as a whole category, because Cava, Italian, Champagne and New World sparkling wine all offer something different."

Sparkling wines

Gary Greenwood, managing director of South African wine specialist Distell Europe, whose Nederburg Brut is sold though Waverley, says licensees shouldn't be sucked into seeing non-Champagne sparkling wines as second best.

"Sparkling wine was always thought of as the poor man's Champagne but that stigma has gone," he says. "A lot of the main wine brands have launched sparkling wines and seem to be doing well."

One cloud on the horizon for Champagne is the possibility of recession. Champagne is often seen as a mirror to levels of confidence in the economy in general.

Seale at Pernod Ricard says: "We haven't seen signs of it having any effect yet, and obviously everyone's still waiting to see what the long-terms effects are going to be on the UK economy, but there are concerns."

For now, there's no sign that the bubble's about to burst, but whichever route you take there's one sure way not to miss out on the fizz boom. "Really the trick is just to have sparkling wine, which a lot of pubs don't," says Bruce.

How to maximise the fizz opportunity

l Have a good cross section of styles and prices, and include them all on the wine list.

l Use theatre to accompany the purchase to make customers feel special, such as an ice bucket and glasses brought to the table.

l Use by-the-glass sales around special occasions such as Valentine's Day or Mother's Day. If you're worried about waste keep the by-the-glass to events when you know you can sell substantial volume.

l If you already have by-the-glass try to trade people up to quality styles.

l Food pubs can encourage customers to have a pre-dinner glass of Champagne. Suggest certain Champagnes with dishes, or run special offers, such as a smoked salmon and glass of Champagne lunch.

l Challenge suppliers. Tell them to come and look at your business and tell you what sparkling wine can do to make the most of the opportunity for you.

l Educate staff. If you have a range of wines with different styles, flavours and palates then make sure they all know the difference.

Related topics: Other operators

Follow us

Pub Trade Guides

View more