US Champagne shipments fell by a fifth last year due to Covid and stockpiling
Champagne volume shipments to the US fell by 19% year-on-year in 2020, impacted not just by the fall-out of the Covid-19 pandemic, but by stockpiling the previous year.
During a webinar last week, Jennifer Hall, Director of the Champagne Bureau, USA said: “Even before 2020, the looming threat of tariffs on Champagne in addition to existing tariffs on European still wine had a negative impact on the market.
“Many businesses stockpiled Champagne late in 2019 and early 2020. Then in March Covid-19 lockdowns and the closure of restaurants and bars across the nation had an immediate and lasting impact.”
With little to celebrate, Americans were also drinking less and these combined effects wiped out a fifth of volumes, with 20.8 million bottles of bubbly delivered to the US, according to just-released data from the Champagne Bureau USA.
While the numbers were significantly down, the value of these shipments was more than $570 million (€482.7m) in 2020, the highest of any country outside of France. But the value decline was almost 25% versus 2019, which was due to fewer high-value cuvées being imported. This suggests that appetite for luxury brands may have waned during the pandemic as Americans settled for cheaper brand or styles.
Hall was hopeful about a rebound and added: “The Champagne sector has proven its resilience before, and it will do so again. After the Great Recession [the global financial crisis], the industry bounced back and saw seven consecutive years of growth in Champagne shipments to the US with an average CAGR of 6.2%. It is our hope that Champagne will again show its strength as the US makes progress towards recovery from the pandemic.”
Novel consumer interactions
New ways of interacting with shoppers last year are expected to be long-lasting and contribute to a turnaround at some point. Online wine sales rose in 2020, and combined with beverage delivery apps such as Drizly (in the process of being bought by Uber), virtual tastings, and other innovations, Champagne has been more widely exposed to consumers.
During the webinar, Gaëlle Egoroff, Appellation Protection and Promotion Director at the Comité Champagne in France, commented: “Information from US importers suggests that Champagne consumption has been higher than the shipments show.” She also said that because stockpiling took place in 2019 it was possible that high-end bottles were already well stocked which might explain the bigger decline in value sales in 2020 versus volumes. But she admitted that “the closure of primary consumption and sales hubs, along with the cancellation of in-person events, put the industry under pressure”.
Champagne houses – including well-known names as Krug, Lanson, and Moët & Chandon – make up about 93% of the US market by value, with rosé styles proving especially popular with Americans compared to Europe, and they continued to increase their market share last year.
At a global level, 18% fewer bottles of Champagne were shipped in 2020 compared to the previous year according to Comité Champagne – which represents the 360 houses and 16,100 growers of the Champagne region in France.
The two leading export markets by volume – the UK and the US – were down by similar percentages while third-placed Japan saw volumes tumble by 28%. The US represented 15.8% of all Champagne shipments in 2020.