Available from just-drinks' research store now is the "Global market review of Champagne." The review not only looks at markets around the world, but also gives profiles of the main players in the sector. In this excerpt from the 80-page report, author Giles Fallowfield takes a look at the US Champagne market, the second biggest last year in terms of volume and value.

Were it not for the continuing weakness of the US dollar against the Euro, the US would once more have been the most favoured export market in 2004 for many of the major players in Champagne, particularly LVMH and Allied-Domecq, whose brands continue to dominate sales there. It is the most important market for prestige cuvées and vintage Champagne, while rosé shipments took a big jump forward last year rising to 938,804 bottles from 676,729 in 2003, a new record. It is not just in the UK that there is a clear upward trend in demand for rosé styles of Champagne.

Sales of vintage Champagne also made decent progress in 2004, moving up from 1.896m to 2.048m bottles. This is still some way below the peak reached at the height of millennium madness in 1999, however, when 3.869m bottles of vintage Champagne were shipped to US shores. The US also remains the leading market for the likes of Dom Pérignon, Cristal and Belle Époque, and while the volume of prestige cuvée Champagne shipped, like vintage, has not returned to the dizzy heights of 1999's 4.32m bottles, it has grown steadily since 2001, and in 2004 represented 8.04% of shipments to the US, and rather more than that in terms of value.

The US is an even more strongly branded market than Japan. The top three brands in the US - Moët & Chandon, Veuve Clicquot and Perrier Jouët - between them accounted for 64.92%, or 13.15m, bottles of total shipments to the US in 2004, compared with 62.63% of total Champagne shipments the year before (11.872m bottles). The top eight brands in the US between them tie up over 81.45% of shipments, leaving meagre portions for the other smaller producers. In Japan, the top eight players have three-quarters of the market (75.1%). Contrast this with the UK where the top eight had only slightly more than half the market (52.15%) in 2004.

The US is a key market for Allied Domecq's brands, particularly Perrier Jouët, which has built sales there from 60,000 cases to 102,000 between 2001 and 2004. Mumm has also grown its sales there, if less spectacularly, increasing volume from 50,000 to 78,000 cases over the same period. The four LVMH and Allied Domecq brands between them account for around 15m bottles out of the total of 20.26m shipped to the US, with Moët and Clicquot taking the lion's share at just under 12m bottles, and this is without considering what Krug and Ruinart contribute.

Jean-Marie Barillère, CEO of Champagne Mumm and Perrier-Jouët said; "Perrier-Jouët has been reinforced in terms of its number three position in the US (behind Moët and Clicquot). Demand for Champagne is growing strongly, particularly in California and Las Vegas, the fastest growing city in the US where demand is booming. We've seen 20% growth for Perrier-Jouët and Mumm together in terms of volume, and in value it's more."

In the short-term, however, profitability has been hit by the weakness of the US dollar against the Euro. "Quite a few people in the wine business are losing money in the States today. You'd have had to have over 50% margin to absorb the 50% change in exchange rates and still make a profit. But we are in it for the long term," said Barillère.

For Mumm, the goal is, "global value growth not volume. We have grown in some markets while in others we are a bit smaller. The US market is potentially very good and still very profitable due to the mix and the high proportion of prestige cuvées sold there, but for Mumm it is still an investment market," said Barillère. "We are still not where we want to be in terms of price and channel. We want a greater presence in the on-trade and that's a general comment for every market the brand is targeting."

Value growth not volume makes sense, given that Barillère says they have started a process of country-by-country allocation for Mumm, following the efforts of winemaker Dominique Demarville to greatly improve the quality in the bottle at the end of 2003. He is very optimistic about what he calls the Anglo-Saxon markets, the UK and US, though he is more optimistic about the former in the short-term due to the currency difficulties in the US. "The key point is to sell at a good price. Volume is not the issue. All our strategic activities will be concentrating on value, not volume." He admitted in the past both under Allied Domecq and before that Seagram, that Mumm had suffered as a result of the companies taking the same approach to Champagne as they did for spirits.

Piper Heidsieck in many ways conforms to the ideal positioning for an international brand with 80% of its sales outside France, according to Alain Rouchaud, managing director of C&P Heidsieck. The UK and US are its two most important export markets each accounting for around 15% of sales, but Rouchaud says: "In terms of value the US is slightly more important for us and it's growing faster in terms of volume, value and sales mix. The US certainly has a key role to play in the next three to five years. When the economy is doing well people like to celebrate and drink Champagne. It's showing off in a way.

Expert Analysis

Global market review of Champagne - forecasts to 2009
This new report from just-drinks is a comprehensive insight into the world's major Champagne markets, providing analysis and forecasts to 2009. The award-winning author outlines supply and demand, production and shipments, and new product development, supported by interviews with the industry's top executives. It also features company profiles of the top 15 groups in champagne: Moët Hennessy Group, Groupe Lanson International, Vranken Pommery Monopole, Laurent Perrier, Allied Domecq, GH Martel, Rémy Cointreau, Centre Vinicole Champagne Nicolas Feuillatte, Louis Roederer Group, Alliance Champagne Co-operative, Boizel Chanoine Champagne, Taittinger, Group Thiénot, Duval-Leroy, Bollinger. The profiles cover brands, market share, strengths, weaknesses, vineyard holdings, sales worldwide and own country vs exports, and group turnover figures.

Find out more here.