You want an interesting scenario? Try this one on: In 1997, some 12.7 million cases of sparkling wine were sold in the U.S. By at least one projection, that figure will balloon to more about 17 million cases next year.
How about this statistical projection: Retail revenues for all sparkling wine and champagne in the U.S. last year was about $1.0 billion. In 1999, that figure could rise, conservatively, to nearly $1.7 billion.
These are projections, and where these numbers come from is less important than why someone would be willing to project them. It is all in the planning for the millennium parties, and this includes not only what Americans will do, but also people from all over the world.
The projections above come from David Brown, vice president for marketing at Gloria Ferrer Champagne Caves in Sonoma County, and the man who also markets Freixenet of Spain, the largest-selling imported sparkling wine in the U.S. with 750,000 cases sold here in 1997.
Brown’s assessment of the “millennium crush,” an impact that already has made an appearance in the U.S. wholesale market, seems to be quite conservative. Of course, no one can foretell the future and what the consumer actually will do, but his thinking clearly is sound. (See sidebar)
David Brown of Gloria Ferrer, one of the nation’s savviest marketing executives, did a thorough (although admittedly seat-of-the-pants) analysis of the potential for champagne and sparkling wine sales in the U.S. for 1999.
“We think all champagne and sparkling wine sales in the U.S. will be up 35% in 1999,” said Brown, who has published part of this thesis in a brochure called “Millennium Planning Guide for Retailers and Restaurateurs.”
Brown added, “We feel that most of the producers who make a methode champenoise product will run out before the end of the year.”
I asked Brown if Gloria Ferrer had plans to increase production this year for next year’s demand. He said it was too late. This year’s grapes are now fermenting a second time to develop bubbles and complexity, and sales of this wine cannot begin until mid-2000.
And even if the winery had wanted to do something in 1997, “We don’t have the capacity; we’re already swimming as fast as we can swim,” he said.
His analysis is based on the fact that the millennium parties are “a once-in-a-lifetime celebration, which will be getting year-long media attention. Cruise ships, Las Vegas [hotels] and major New York hotels have sold out. And keep in mind that December 31, 1999, falls on a Friday and people in the entertainment business say that they do 20% more business if a New Year’s falls on a Friday or Saturday night.”
Here is Brown’s analysis:
“There are 270 million Americans, and an adult population of 182 million. There are 43 million adults who bought at least one bottle of sparkling wine last year, which leaves a remaining number of 139 million potential sparkling wine consumers.
“Now, let’s assume that 50% of these new potential sparkling wine consumers have only one glass of champagne or other fine bubbly pressed into their hand during the course of the year. That’s 69.5 million glasses of bubbly.
“If there are 72 glasses of sparkling wine in a case, that’s 965,000 additional cases of wine that we’ll need in 1999.
“OK, now let’s go back to champagne drinkers who had at least a bottle last year. Let’s assume they increase their consumption by one bottle. That adds another 3,583,000 cases to the number.”
By adding the 3.6 million cases that today’s drinkers will add to their shopping list to the nearly 700,000 cases that will be sold to those who didn’t drink sparkling wine last year, we can see that sales of all bubbly will rise to a conservative estimate of 4.4 million cases more than the 12.7 million that were sold in the U.S. in 1997, a 35% increase — for a total of more than 17 million cases.
Also, there is the price increase that Brown projects.
The ACNielsen wine survey estimates that the average price of a bottle of bubbly in the U.S. last year sold for $6.89. That’s about $83 per case times 12.7 million cases, or just over $1 billion.
Brown suggests that the strong U.S. economy will prompt consumers to trade up to an $8 per bottle average. “We predict, then, that with 17 million cases sold, revenues will rise by some 65%, to about $1,650,000,000.
Meanwhile, despite a few “stock market corrections,” the success of the U.S. economy, especially over the last two years, already has created many celebratory moments throughout the U.S., and 1997 statistics prove the point:
Almost as much French champagne was sold in the U.S. last year as in the all-time record year of 1987. With French champagne being the clear worldwide standard for such products — and not generally an inexpensive wine — it’s a clear indication we are continuing to celebrate.
According to statistics from the Champagne Wine Information Bureau in New York, some 1.28 million cases of French bubbly were sold in the U.S. last year, compared with 1.1 million cases the year before. The all-time record for French champagne sales in the U.S. was in 1987, when 1.32 million cases were sold here. Overall imported sparkling wine sales posted a 1.5% sales increase nationally in 1997.
At the same time, domestic sparkling wine sales continued to rise, jumping 2.5% in 1997 over 1996, according to the authoritative Adams Wine Handbook 1998 — and much of the growth has come from upscale brands that sell for $10 or more.
Leading merchants say that a small part of the demand in 1998, but one that is increasingly on the minds of wine lovers, is planning for the “millennium parties” scheduled for December 31, 1999. And, in many cases, one can imagine there will be many parties leading up to the millennium eve.
It’s true that the real millennium isn’t until a year later, but already there is an indication that bubbly is on the minds of many — not the least of them retailers who are stocking shelves in anticipation of a 1999 rush to lay in quantities of sparkling wine and champagne so as not to get shut out for the New Year.
One major Southern California retail chain called Brown at Gloria Ferrer and asked if he could guarantee about 65% more of his Gloria Ferrer sparkling wine in 1999. Brown said it was not an order for the product, just a request that the product be available if needed.
“No one wants to make a one-shot product,” said Brown, adding that it takes at least 18 months to make fine quality sparkling wine, and that when he got the request for so many additional cases, it was already less than 18 months from the time that the wine would be needed.
All bubbly typically sells predictably slowly for 11 months of the year and then leaps into the stratosphere as people ready themselves for the onslaught of partying that accompanies the changing of calendars. About half of all champagne and sparkling wine sales occur in the last quarter of the year. Will this pattern change in 1999? No one knows.
By this past summer, however, there already was a level of excitement at wholesale for all bubbly. There was a great deal of nervousness — as if people were asking, “Will bubbly sales this year forecast what will happen a year from now?” The coming months offer optimism for the major — and even minor — champagne houses.
Jean-Louis Carbonniere, head of the Champagne Wine Information Bureau, notes that U.S. sales of French champagne were flat or down from 1987 through 1992, and have slowly but very steadily been on the rise since then.
An interesting point, Carbonniere said, is that since 1982 champagne sales in the U.S. have more than doubled, and that in 1996 champagne sales increased more than 6%. That was followed by the 1997 increase of 14%, and that figure is expected to rise significantly in 1999.
Moreover, the demand for prestige bubbly, the so-called Grand Marque Prestige Cuvees, continued to rise even faster, on a percentage basis, than for the relatively lower-priced brands.
“The economy is doing well and the confidence we saw among consumers last year has continued,” said Carbonniere. He added that the depressed nature of the French franc has allowed prices for non-vintage Brut to remain below $25 a bottle in most cases, with some of the better-known houses keeping prices below $20.
Illustrating the success of higher-end brands, Mo