The Champagne sector stands at a 'crossroads', with some producers backing newer markets to bring growth and others maintaining Champagne's traditional markets remain more critical for its future, a new report has suggested.

According to the just-drinks report, 'Global market review of Champagne – forecasts to 2016', the Champagne market recovered in 2010 and 2011 following the "inevitable sales declines of late 2008 and 2009".

But, it adds that there were already signs of a slowdown towards the end of 2011, particularly in the large western European markets, which account for around 80% of shipments, and that trend has continued into this year. Most observers believe overall Champagne shipments will rise only slightly during 2012.

However, other countries, such as the US, Australia, Japan and Asian markets including China, are showing "a more dynamic sales trend", albeit from a smaller base, and an increasing number of producers are "eagerly embracing these exciting new markets".

However, the report states that other Champagne producers are still focusing on the sector's historically strong destinations, battling for market share and increased profitability even if extra volumes are hard to come by. Some are also prioritising the relatively Champagne-savvy US.

Champagne exports last year rose by 5.1% to 141.3m bottles, with sales values rising by 11.9% to EUR2.18bn (US$2.81bn). The report forecasts that volumes will continue to rise steadily from a forecast 145.5m bottles in 2012 to 165.0m bottles in 2016. It predicts that sales values will rise from EUR2.3bn in 2012 to EUR2.9bn in 2016. 

The report predicts that "new" markets will continue to record sales increases, offsetting flat figures or declines in more mature markets. "The shift in the balance of Champagne sales is leading producers increasingly to target the Far East, alongside a renewed focus on the US," the report notes.