Makers of the luxurious French sparkling wine are entering the selling season that accounts for some 25% of its volume with the double whammy of a weak economy that's forced consumers to trade down from the priciest alcoholic beverages and a weak U.S. dollar driving already lofty Champagne prices further skyward. Add to that the fact that Champagne consumption is overwhelmingly rooted in bars and restaurants at a moment when people are going out less -- and have little to celebrate.
Even worse, these factors were taking their toll well before the stock market's September nosedive -- shipments to the U.S. declined 17% through July, according to the Office of Champagne -- and are widely expected to wreak havoc on year-end sales. November and December recently have accounted for about 25% of sales for the full year.
"It's hard to imagine it will be anything other than horrible," said Frank Walters, director of research for the alcohol-industry trade magazine Impact.
Calls to spokesmen for two of the largest U.S. Champagne marketers, Moët Hennessey (Moët & Chandon, Krug) and Pernod Ricard (Perrier-Jouet, G.H. Mumm) were not returned at press time.
As recently as last year, both companies were vowing to boost year-round marketing of their brands. But the effort seems to have regressed: Data from TNS Media Intelligence show that first-half measured media spending by Champagne marketers -- which had risen in 2006 and 2007 -- fell sharply this year. Moët & Chandon, the biggest-spending bubbly advertiser, laid out nearly $500,000 in the first half of 2007 but cut that in half this year.
"They need to spend a lot more if they want to move beyond their current usage occasions," said veteran beverage-marketing consultant Brian Sudano, who has worked with Pernod Ricard in the past. "Right now it's just a celebratory beverage and a brunch cocktail, and it's not going to see any real velocity until it becomes more than that, and making it more than that will be expensive."
The Champagne industry is planning an ad campaign for the fourth quarter that emphasizes the uniqueness of individual wine regions while mocking impostors such as "American Champagne."
The push will center on out-of-home executions such as billboards (including one in Times Square that will be visible on New Year's Eve broadcasts) and airline tray tables, as well as print ads. The agency is Chlopak, Leonard, Schechter and Associates in Washington.
A spokeswoman for the Office of Champagne, the U.S. arm of the Champagne industry's trade group, said the campaign was intended to influence legislators into cracking down on non-Champagne-based producers using the region's name on its wines, not to help sell wine.