Champagne Crisis: Harvest and Sales Plummet

The Champagne region is experiencing a particularly difficult year for the 2024 harvest, grappling with a trifecta of adverse weather conditions, declining sales, and vineyard diseases. The Comité Champagne (CIVC) has set the commercial appellation for this year at 10,000 kg/ha, mirroring the levels seen in 2021. Late frosts and hailstorms have significantly impacted yield potential, with an estimated damage around 10%. Specifically, 9.2% of the potential loss is attributed to frosts, predominantly affecting the Aube department, while the remainder is due to severe hailstorms in the Vallée de la Marne.

Spring brought wet and cold conditions, and a storm-laden summer in July has exacerbated issues, increasing the pressure from downy mildew. This inclement weather has prolonged the flowering period, thereby heightening the risk of losses. Although the precise impact of downy mildew on yield cannot be accurately forecasted, significant losses in the harvest are anticipated.

Maxime Toubart, president of the Syndicat des Vignerons (SGV) and co-president of the CIVC, estimates that yield will be around 10,000 kg/ha. However, he warns this figure might decrease if powdery mildew pressure compounds the current downy mildew epidemic. The alignment between commercial and agronomic yield is noteworthy, especially following quality issues from last year's rot-affected harvest. Officially, 10% of last year's harvest needs replacement due to low quality, with some sources suggesting this figure could be as high as 40%.

Champagne sales have been on a downward trajectory for 16 consecutive months, with a moving annual total (MAT) of 280 million bottles, below the levels of June 2021. Sales in the first half of 2024 are the second lowest in over two decades. Exports have plunged by 18.2%, while domestic sales in France have decreased by 10.2%. European exports have dropped 22.1%, and sales to the rest of the world have fallen by 16.4%. Despite a slight deceleration in the sales decline over the past three months, June saw sharper losses than May and April.

David Chatillon, president of the Union des Maisons de Champagne (UMC) and co-president of the CIVC, attributes the sales figures to an overstock issue following the Covid-19 crisis. However, with 16 months of continuous decline, this explanation seems less convincing. French sales continue to fall year-on-year, and while exports are slightly higher than in 2018, ongoing declines in European sales suggest overall figures may continue to drop annually.

Champagne houses and cooperatives have borne the brunt of the sales decline, with first-half drops of 17.1% and 15.2%, respectively. This indicates ongoing difficulties for the non-vintage Champagne category. One reason could be the recent price hikes driven by rising grape prices without corresponding improvements in quality. Lower-priced alternatives to Champagne have also played a role.

While the co-presidents maintain that Champagne occupies a more premium segment than other sparkling wines, some houses and cooperatives have started applying significant discounts to boost non-vintage wine sales, particularly in the UK and US. This strategy has had tentative success but has not reversed the sales decline, likely because consumers have gravitated towards more novel alternatives.

In the US, the sparkling wine market has grown exponentially since 2019, with nearly one in four wine consumers regularly choosing sparkling wines in 2023. Prosecco, Crémant, Cava, and American sparkling wines have significantly benefited from this consumer exploration, especially among men under 55.

In the UK, while growth since 2019 slowed somewhat in 2023, one in three wine consumers still drinks sparkling wine regularly. British consumers seem more loyal to well-known brands, but this hasn't stopped English sparkling wine, Crémant, and low-alcohol sparkling wines from driving market growth.

The Champagne region is navigating a year fraught with challenges, from environmental to economic pressures. As the harvest progresses, the industry will be closely monitoring the yield impacts of ongoing vineyard diseases and adverse weather conditions. Simultaneously, market dynamics in key regions like the US and UK highlight shifting consumer preferences that Champagne producers must adapt to in order to regain momentum.