Sparkling Wines And Champagnes Are The Tip Of The Spear In The Premiumization Of Alcohol

Food & Drink

The recent report from the Union des Maisons de Champagne, the trade organization representing the primary champagne producers in France, that sales of the bubbly beverage reached an all-time high of $5.7 billion in 2021 only highlights the fact that more consumers than ever are searching for premium goods. Viewed as quite possibly the epitome of luxury, champagne and the entire subset of sparkling wines could serve as a prognosticator to consumers’ choices in the alcohol industry.

According to Allied Market Research, the global luxury wine and spirits market is expected to grow to $141 billion by 2027 due to urbanization, increasing disposable income, and the emergence of new markets worldwide. That thirst for something better is causing champagne and sparkling wines to pop up on more liquor store shelves, grocery stores, and restaurant and bar menus than ever.

Due to their glamorous appeal and ease of introduction into higher-end alcohol products, many in the industry believe that they are the ideal starting point for many drinkers looking to branch out.

“Once you start to get into (champagne and sparkling wines), you build a habit. It becomes something fun and exciting,” says Jean-Charles Boisset, the co-manager of the Boisset Collection, a group of over thirty-six wineries spread across the globe. “It prepares you for enjoying better wines and other beverages. People want to look more sophisticated, educated, and refined, and bubbles only fit into that. As they grow share, the rest of the market will follow.”

The Champagne region in France, where actual champagne comes from, is dealing with several supply issues due to lower yields caused by a string of weather-related disasters and limited harvests due to pandemic lockdowns. That has only served to drive prices up and create more demand for their products while also causing drinkers to look to other regions for their sparkling fix. Over the last decade, the market has seen an explosion of new products. Cava and Prosecco’s are booming, sparkling rosé wines are the rage, and Crémant’s from across France are suddenly hot-up 61.5%, according to Vins Alsace.

“Overall, we are up across the board in the champagne and sparkling category. So much so that several brands struggled to meet our needs last year as they ramped production back up after the pandemic,” says Joe Tedesco, the wine department manager for Hazel’s Beverage World, one of the largest liquor stores in Colorado. “Even with the prices going up across the board, consumers are still searching them out, and as our sparkling sales increase, we are seeing a ripple effect across all our premium brands.”

The popularity of sparkling wines is leading to deeper penetration in the on-premise world too. Gone are the days when restaurants and bars would stock up for special occasions and holidays and then run their inventories low at other times. Many establishments now offer multiple selections that run the gamut of prices and styles. Besides bringing more revenue to their bottom line, they also allow their customers an easy entry point to a much wider back bar.

“We have found that by introducing sparkling wines to our customers in a fun and easy manner by paring them with fried chicken and oysters, they quickly become fans,” says Sabrina Miller, the general manager of Leon’s Fine Poultry & Oyster Shop in Charlestown, SC. “Our ever-changing list of thirty-three bottles right now consists of twenty-two champagnes and eleven sparkling wines. Our sparkling wine program has led to our customers trying higher-end spirits and beverages, which helps us and builds a loyal customer base long term.”

If there is ever a testament to the growing popularity of sparkling wines and their connection with glamor and wealth, just look at the broad audience these two brands encompass. The first is the Buckingham Palace English Sparkling Wine being released to celebrate the Platinum Jubilee of Queen Elizabeth II. Featuring a label designed to pay homage to the robe she wore during her coronation, it will retail for $53. All proceeds will benefit the Royal Collection Trust. As sparkling wines continue to boom in the UK, expectations are high that the release will quickly sell out.

Multimedia star, rapper, and fashion icon Jay-Z sold half his luxury champagne brand Armand de Brignac to Moët Hennessy Louis Vuitton in 2021 for more than $600 million. Long featured on his social media feeds and in his performances, his Brut Gold bottle sells for $347.99 on Drizzly. His distinctive bottles with their mirrored surfaces and raised lettering have been credited with helping to usher Millennials into the premium alcohol market.

Another segment of the space that is helping drive consumers forward is the sudden proliferation of single-serve bottles and canned sparkling wines. A product that once was seemingly for special occasions has never been more approachable, and that seems to mirror the upscaling in the overall spirits industry.

“Sparkling wines have become an essential part of our strategy; probably 22% of our global sales are them. They have become the epicenter in our plans to build out the entire Boisset brand into one of the leading luxury brands in the market,” says Boisset. “Its appeal is worldwide, and we’re are seeing demand for our products across the globe. Everyone is looking for an experience, for pleasure, for fun after the pandemic, and sparkling wines are the ideal entry point for them. Where the champagne goes, the rest follow I say.”

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