There is no doubting that Champagne has a unique cachet among sparkling wines but non-Champagne sparklers have been growing well in recent years. According to a new report from just-drinks and IWSR, worsening economic conditions could foster further growth as consumers look for value, while cannier marketing offers the potential for sparkling wines to be seen as more than just a cheap alternative to Champagne. Ben Cooper reports.

The sparkling wine market has grown steadily in recent years, and current economic conditions could herald further growth, a new just-drinks report forecasts.

Global non-Champagne sparkling wine sales rose at a compound annual growth rate (CAGR) of 4% between 2003 and 2007 to reach 166.7m nine-litre cases, according to the just-drinks/IWSR report, Global market review of sparkling wine - forecasts to 2012. Indeed, the growth accelerated last year, with sales in 2007 up by 4.3%.

While Champagne sales have also risen strongly, that growth has stretched the production capabilities of this geographically delimited region, pushing up prices. That could not be in more marked contrast to the sparkling wine sector.

As the report points out: "One key feature of the non-Champagne sparkling wine market is the extremely low average prices charged. In Europe, it is remarkable how few European non-Champagne sparkling wines sell above EUR7.50 (US$10.10) compared to Champagne, which very rarely sells below that."

In value terms, Champagne accounts for 55% of the sparkling wine category, according to IWSR figures, even though the non-Champagne sparkling wine market is almost seven-and-a-half times larger in volume terms.

The combination of current global economic conditions and the growth in demand for Champagne could create opportunities for sparkling wine brands. "With demand beginning to outstrip supply, Champagne prices are rising as companies look to extract greater value out of their brands," the report continues. "With the current shortages, Champagne prices are skyrocketing.

"As the price of Champagne goes up that is going to create more opportunity for sparkling wines to fill that void. With economies slowing down across the globe, sparkling wine's affordability may prove to its advantage compared to Champagne."

However, while the attractive price comparison with Champagne may foster growth, sparkling wine companies see longer-term potential in developing a distinct identity for their products. The way forward for sparkling wine producers, some argue, is not to be seen as an alternative to Champagne, but to place greater marketing emphasis on their own individual heritage and characteristics. Champagne will always have something of a unique cachet so the aim should be to convince consumers that other sparkling wines have their own distinctive attributes.

However, there is something of a Catch-22 here. Low pricing is clearly a factor in the relative lack of brand-led marketing seen in non-Champagne sparkling wines in comparison with Champagne. And this, as the report points out, explains the stronger growth of Champagne in recent years. "Champagne sales are generally growing faster than non-Champagne sparkling wine," the report says. "This is typically because more advertising and promotion is put into Champagne than into non-Champagne sparkling wine, with some notable exceptions such as Freixenet."

Marketers quoted in the report clearly feel there is potential for marketing-led development of the non-Champagne sparkling wine category. One of the ways sparkling wines can seek to establish their own identity, the report suggests, is through the use of more indigenous grape varieties, as has been with Cava.

Other drivers for growth include expanding the consumption opportunities for sparkling wine, packaging innovation, and the proliferation of range extensions from established still wine brands.

While there are times, as Champagne marketers are fond of stressing, when "only Champagne will do", the report points out that a common feature shared by all of the largest sparkling wine markets is that their consumers drink it more on an everyday basis rather than in its customary celebratory role. This is true of France, Germany, northern Italy and Catalonia.

Marketers agree that there are opportunities to develop non-sparkling wine sales by encouraging more everyday use, particularly as an aperitif, which in one sense turns the notion that Champagne is the product for special occasions to their advantage. The report suggests this is already being achieved in markets such as Australia and the UK.

"One advantage that non-Champagne sparkling wine has is that producers can go for the huge aperitif drinking market, which Champagne almost cannot do, except in countries, like France, where it has always been used in that role," the report states. "The adoption of this aperitif-style of drinking has been one of the keys to the category's success in Australia. In Australia, sparkling wine is no longer just about celebration. Australian producers have had success associating sparkling wine with a relaxed attitude, thus expanding its usage into an everyday drink."

Packaging innovations also offer development potential. Indeed, some marketers argue that the absence of innovation in packaging is one of the reasons for the relative dearth of strong non-Champagne sparkling wine brands, and that the time is right to break that mould and invest in new formats.

The continuing trend of still light wine brands launching sparkling range extensions is set to continue, the report suggests, not least because they are seen to offer benefits to the core brands. "The indications are that these sparkling wine extensions strengthen the overall brand image, and don't detract from the sales of still wine," the report states. "Moreover, the fact that the sparkling extensions sell at higher price points than the still light wine versions is obviously beneficial in terms of superior margins, but also in terms of a brand's image."

Given that what the sparkling wine market seems to require above all is marketing-led development, they appear to be no bad thing for the sparkling wine sector as a whole too.

For more information or to download the just-drinks/IWSR report, Global market review of sparkling wine - forecasts to 2012, go to /store/product.aspx?id=67867&lk=rotw_arch