Friday Read: Price and vintage in Champagne

By James Lawrence

Published: 31 January, 2020

To the untrained eye, little has changed in the world of Champagne marketing. The Grande Marques, endowed with lavish budgets, continue to position themselves at the most glamorous events. Vintages are declared and the well-oiled marketing machine continues to roll.

But dig a little deeper into this business and there is evidence that tactics amongst the major houses are evolving, designed to meet 21st century consumer expectations and capitalize on the buoyant demand for luxury Champagne. The launch of the 2008 vintages of Louis Roederer's Cristal and Bollinger's Grande Année – both excellent wines - certainly ruffled quite a few feathers. The trade could not deny the impressive quality on offer, or the price jump compared to previous releases.

In 2018, my local wine merchant was selling Cristal 2009 for £135. I also managed to snag an unsold bottle of Krug 2003 for £165. Yet today, I cannot find any Cristal 2008 for less than £200. Similarly, Krug 2002 is rarely available for less than £300 – at least in my experience. But what justifies these price hikes? The perceived quality of the vintage, of course.

Until relatively recently, the price of vintage deluxe Champagne was not dependent on the reputation of the harvest or scores as it is in Bordeaux. The 2003 vintage of Dom Pérignon – universally regarded by critics as a weak year – was priced at a similar level to the 2004, which received more enthusiasm from the press. Yet it appears that the champenoise have learnt a trick or two from their colleagues further south.

The best analogy to reach for is that houses have introduced an' en-primeur approach' to selling upmarket Champagne. A generous amount of energy is now expended in promoting vintages such as 2008, which were justifiably lauded by the press. The hype builds, the trade are complicit and voila – unprecedented price tags are achieved.

Nevertheless, there are key differences. The Bordeaux system is, of course, built on the notion that buyers can purchase their wine a few years ahead of bottling, at an advantageous price; in contrast brands like Dom Pérignon are released eight to nine years after the harvest and merchants, once given their allocations, can only then begin selling the wine to consumers once the release has been announced.

Moreover, the press descends on Bordeaux in the spring to talk up, or conversely malign the previous years' harvest. Committed writers arrive to taste vin clair in January each year, but there is no such parallel practice of pre-release vintage assessment in Champagne.

Where the similarities lie is in the media/consumer marketing machines now being adopted by key major brands prior to release. These have more than a whiff of en-primeur about them. Merchants are typically now told of an upcoming release three months before its set date, allowing them and the brand in question plenty of time to get the hype machine rolling.

But what has been the primary catalyst for this change of approach? For decades, luxury Champagne brands have been predominantly marketed as a superior choice for lavish celebrations, rather than as an investment/speculative option. Of course, a small percentage of buyers have always purchased to re-sell, but the phenomenon of promoting Champagne as an investment commodity has been alien to most of the major houses.

However, Champagne is now seen as both a celebratory drink and lucrative investment choice in its own right, thanks to a culture of promoting individual vintages that has encouraged fine wine merchants and consumers to diversify their interest beyond reds. So the hype over certain vintages attracts investors - according to fine wine exchange Liv-ex, Champagne has performed above expectations on the second market. “Prestige Champagne has always been a good investment - but perhaps only recently has the market begun to recognise this,” observed director Justin Gibbs.

“There has been hype around 2008 Champagne (and also hype about 2012) and it certainly led to greater sales than vintage cuvées normally receive,” adds Jeroboam's wine director Peter Mitchell MW.

Of course, not every Champagne brand is slavishly adhering to this model. “At Champagne Palmer, we have recently launched our vintage 2008 in magnum, it’s indeed a fantastic vintage, and yet, we did not apply a price increase,” says Champagne Palmer's communication manager Francois Demouy.

“I would say that in Champagne the 'vintage effect' is maybe more emotional than rational and, in my opinion, I don’t think that the vintage should affect the pricing.”

Peter Mitchell MW also underlines the danger in creating a strong link between vintage quality/media hype and price. If the perceived quality of the vintage is high, then brands clearly benefit.

But what about vintages that are written off?

The Bordeaux establishment still haven't forgiven the UK press for its assessment of the largely turgid 2013 vintage.

“The benefit to the trade of a hyped vintage is having a call to action and creating an urgency about buying a wine, whilst also (often) being able to charge supra-normal profits,” admits Mitchell.

He continues: “The downside is that it can make wines hard to shift in vintages maligned by critics. Tuscany was not a region that was largely vintage dependent until really quite recently, but now is. So whilst 2013 was easy to sell at inflated prices, 2014 was passed over by many, despite many 2014’s being excellent and approachable. Balancing those two vintages together, did this benefit the trade or the consumer? I would argue not. Creating cycles of boom and bust benefits no one.”

In this regard, though, Champagne once again has the upper hand. There is no imperative to declare every year – although that has been the general pattern for some brands – and prestige cuvée releases can be limited to the more favoured vintages, if the balance sheet allows. The poor years can remain 'hidden' in the NV category. And crucially, prestige Champagne can now be viewed by collectors as a safe and relatively affordable investment, meaning that the phenomenon of linking vintage hype to inflated price is likely here to stay.

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