The Shifting Landscape of Champagne

The Champenois are considered the best marketers in the world. They’ve had to be—at least until recently. The emerging middle classes of India and China and the nouveau riche of Russia are inhaling Champagne faster than Baby Phat designer Kimora Lee Simmons, who apparently prefers the level of Champagne in her glass never to drop below an inch. After several years of modest growth, Champagne sales are now being driven up quickly by these new markets. In 2007, worldwide shipments increased 7.3% by volume and 10.4% by value over the previous year, to a total of 338.7 million bottles. According to the French Federation of Wine and Spirits Exporters, French wine sales in China more than doubled to nearly $364 million in 2007, with Champagne at the forefront. Perhaps because of the weakened dollar, the amount of Champagne shipped to the United States dropped slightly last year.

These days, the focus of the Champagne industry is not on how to position and sell its product, but rather on how to keep up with demand. The 2007 harvest produced the equivalent of 335 million bottles of Appellation d’Origine Contrôllée (AOC) wine and 53.1 million bottles of wine in reserve (wine that can’t be sold), which should fulfill current market needs. But what about next year and the years after that? If the current pace continues, the 85,950 planted acres now producing the wines of the Champagne AOC will not be enough.

Although the dynamic here is unique, with most producers buying fruit at a fixed price through multiyear contracts from independent family growers—who own 90% of the vineyards—the challenge is the same as in other prestigious Old World wine-producing areas: limited resources. Fruit comes only from strictly delimited vineyards long recognized for their supreme terroir. Land prices are rising quickly, and producers are scrambling to protect their contracts by offering field services, consulting expertise, and other incentives. One of the most successful at this is Jacques Peters, who leads Veuve Clicquot’s “Champagne Relationship” division. He works exclusively with the company’s growers, aiming to maintain their contracts; today, more than half of Veuve Clicquot’s 950 grape contractors use the Champagne house’s technical or field services.

Expansion of the AOC is already in the works. In 2003, the Institut National des Appellations d’Origine (INAO), the government organization that controls wine appellations in France, embarked on the most extensive revision of the region’s legal boundaries since 1927. First, the INAO defined fresh criteria for entry. Then it sent scientists out to survey soil, climate, and the historic sites of the Chardonnay, Pinot Noir, and Pinot Meunier vines. At present, 44 new communes are being considered for entry, while another two may be declassified. Once the final reclassification is approved—which is not predicted to happen until 2015—the fruit from the new vineyard areas will be available to Champagne producers.

Since 1911, individual vineyards in Champagne have been graded on the échelle des crus, a quality scale from 80-100%. To earn grand cru status, a vineyard must score 100%; premiers crus are rated 90-99%. Originally, the price of the fruit was based on these numbers. The Comité Interprofessionnel du Vin de Champagne (CIVC) determined a base price for each vintage, and the grower received the corresponding percentage of that price—100% for grand cru grapes, and on down the scale. According to Charles Curtis, MW, director of wine and spirits education at Moët Hennessy USA, “The percentages still exist, but since 1990 they have not been used to determine the price. Then there was a decade where a prix indicatif was set, which was sort of a suggested (but non-binding) price fixing, and growers were able to negotiate whatever the market would bear. Recently, a winemaker told me of an example of a grower in Montgueux (rated 80%) who is getting the same price as growers in the grands crus.

“Today, the percentages are taken to refer to quality,” Curtis adds, “but do so only loosely, since it is widely recognized that not all the fruit from every village is homogenous in nature. There was a period after the European Union broke up the price fixing where growers demanded a bonus”—called a prime—“but the prime is now usually done in the form of ancillary services, such as vineyard consulting. Needless to say, the market for fruit is very competitive.”

The CIVC is constantly reviewing the status of Champagne’s vineyards, but it seldom changes theéchelle des crus. “The échelle has been tweaked several times since it was first created,” says Curtis, “notably in 1985, when several villages were promoted to grand cru, although it is not revised on a regular schedule. The biggest change is the proposed revision of the system, which is the basis of a zonage program that reviewed minutely the potential of each vineyard site.”

Unlike the minefields of Burgundy, the five major regions of Champagne—the Montagne de Reims, the Vallée de la Marne, the Côte des Blancs, the Côte de Sézanne, and the Aube—have been celebrated for their consistent quality over the years. Winemaking styles may be changing, however, and what the future holds after the INAO revisions is difficult to predict. For one, Virginia Philip, MS, sommelier at The Breakers in Palm Beach, Fla., believes that market demands may already be dictating changes at the grandes marques (the major Champagne labels): “Stylistically, I would argue that the wines are being released earlier and the vintage Champagnes too consistently. In the past, we would see vintage Champagne released three to five times per decade. Now it seems as if all the big houses are releasing every year.”

A more positive sign is the emergence of outstanding small récoltant-manipulant producers, who make Champagnes from their own grapes (as opposed to a négociant-manipulant orcoopérative-manipulant). “We welcome the opportunity to showcase these wines on our lists at The Breakers,” says Philip. “There is an artisanal craftmanship in these wines that is ultimately reflected on the palate.”

But at today’s exchange rates, “buying Champagne of any kind, at any level, has become much more challenging and frustrating,” Philip notes. “I am looking for a well-made wine that I can offer at a fair price in the brut, brut rosé, and tête de cuvée categories. Our sommelier team tastes for quality and harmony in the wine; if it is not there, we do not consider it for our by-the-glass programs.”

Wine buyers may want to consider the accompanying table, which includes some of my favorite major producers, along with tasting notes on their best recent releases.

Whether artisanal or multinational, Champagne producers are likely to continue supplying the world with wines of flawless quality. Each bottle of their subtle, refined wine is a pure reflection of pristine, chalky terroir, as well as the tireless work of the growers, the mastery of the blenders, and the efforts of the most brilliant marketers on the planet.

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