It’s crunch time for Champagne as the 2024 vintage comes hurtling down the track.
Every July, the Champenois decide the commercial appellation – how much growers can pick and bottle for the upcoming harvest. This applies to both sales expectations and vineyard yield (the average amount of bunches per vine times expected bunch weight). This year, the Comité Champagne (CIVC) announced the 2024 commercial appellation to be 10,000 kg/ha, on par with the harvest amount set in 2021.
Current estimates are that for 2024, the damage is around 10 percent of the potential yield at pruning. More precisely, according to Sébastien Dubuisson, the CIVC’s Director of Quality and Sustainable Development, frost is responsible for 9.2 percent of the potential loss (predominantly in the Aube department where both the regions of Bar-sur-Seine and Bar-sur-Aube have been hard hit), and the rest is attributed to a severe hail storm that destroyed 70 percent of 500 hectares in the Vallée de la Marne, on the border between the Aisne and Marne departments.
Rain has been another common denominator between 2021 and 2024. In both cases, winters were mild and wet, spring was cool, and the rainfall has been excessive, a pattern which has continued over the summer. 2021 saw a deluge of water mid-July, which so far has not happened this year. However, rainfall totals will probably be very close to 2021 if not higher this year, with short warmer spells continuing to be interrupted by big rainstorms lasting several hours.
The wet and humid weather has, just as it did in 2021, resulted in extreme downy mildew pressure. The extended flowering period further increased the risk factor, and even if so far no one wants to make predictions on the extent of the probable downy mildew yield loss, everyone agrees losses at harvest will be significant, but hopefully smaller than in 2021.
At the press conference following the commercial yield announcement, Maxime Toubart, president of the Syndicat des Vignerons (SGV) and co-president of the CIVC, estimated the yield also to be around 10,000 kg/ha, but, if 2021 is anything to go by, this figure may fall if powdery mildew pressure joins the current downy mildew epidemic.
It is very interesting to see the commercial yield matching the agronomical yield this year, especially in the context of last year’s rot-induced quality issues. Officially, 10 percent of last year’s harvest will need to be “sorted out at tank level” or replaced by this year’s juice, because the quality of the wine is significantly substandard. However, unofficially, that amount can go up to 40 percent, depending on who answers the question, which means a lot of extra grapes will have to be found.
The normal exchange process has this wine replaced with wine that is outside the appellation (DPLC), in other words, grapes in excess of the commercial appellation and the Réserve Individuelle (RI) – Champagne’s buffer system to help manage the commercial yield that is capped at 10,000 kg/ha. The RI amount per harvest is normally set at 3,000 kg/ha and, since the total RI currently stands just under 8,000 kg/ha, this in theory means producers need between 12 and 13 tons per hectare, to be able to make the DPLC quality exchange. DPLC exchanges are common practice in Champagne, but they remain controversial, as they entice growers to pick and sell poor-quality grapes, knowing they can sell DPLC the next year, and thus be paid twice.
Moreover, seeing the commercial yield is set based on sales expectations, one could argue 10,000 kg/ha is a tad excessive. Champagne expeditions – bottles leaving Champagne – have been decreasing for 16 consecutive months, and the moving annual total (MAT) sales figure stood at just 280 million bottles, which is below the 2021 June MAT level of 281 million bottles. It pays to point out that because of the Covid losses in 2020, the 2021 June MAT was significantly lower than usual.
Compared to last year, Champagne sales decreased by 39.3 million bottles (in June 2023 the MAT stood at 319.3 million bottles). Moreover, the first semester of 2024 is the second lowest in terms of sales for more than two decades.
A commercial yield of 10,000 kg/ha roughly converts to just over 280 million bottles, however, seeing that in the first semester sales have declined by 15.2 percent, it is very unlikely no further sales losses will occur in the last six months of the year.
Export sales are driving the decline, they are down by 18.2 percent compared to last year, while French sales only lag by 10.2 percent. European exports have fallen by 22.1 percent, while sales to the rest of the world have dropped by 16.4 percent. While the sales decline has slowed up a bit in the past three months compared to the first trimester of the year, it pays to point out that the June losses (down 12.7 percent) were steeper than both the May (down 10.2 percent) and April (down 12.6 percent) losses.
When questioned on the optimistic commercial yield, David Chatillon, president of the Union des Maisons de Champagne (UMC) and the CIVC’s other co-president, blamed the bleak sales figures on the great sales results in the first six months of last year, which he claims to be the second highest semester figure ever, after 2022. Nevertheless, at 106.7 million bottles, the first semester of 2024 trails all other years – bar 2020 – in the past decade.
Chatillon has explained the sales decline by importers and distributors overstocking after the Covid-19 crisis, but seeing the decline has now lasted 16 consecutive months, this is not very credible. Moreover, looking at the figures per market over the last decade, it is clear that the French sales are continuing their downward trend, losing a few percentage points every year. Export sales remain a little higher than 2018 – the highest export sales year before the Covid crisis – but if European sales continue to fall, it is likely they will come out on par or even lower, meaning total sales will continue to decline year on year.
The houses and cooperatives continue to bear the brunt of the sales loss, they lost 17.1 and 15.2 percent respectively this first semester, which clearly shows that it is the non-vintage category that continues to struggle. One of the obvious reasons for this could be the recent price hikes, which have been driven by an increase in grape prices – but not grape quality – and the abundance of non-Champagne alternatives at lower and equal price points.
While both co-presidents uphold that Champagne is in a more premium category than other sparkling wine, and that therefore the higher price point is justified, several houses and cooperatives have begun steep discounts to try and shift a little non-vintage volume both in the UK and the US. This strategy has been working tentatively, but so far it has not rejuvenated the sales slump, maybe because consumers have moved onto more exciting sparkling wine alternatives.
According to the IWSR, the US sparkling wine market has been expanding exponentially since 2019 with almost one in four wine drinkers opting for sparkling wine regularly in 2023. The report states: “Consumers are looking increasingly beyond brands to explore new styles of sparkling wine.” So far the big winners of this sparkling wine exploration have been Prosecco, Crémant, Cava, and US sparkling wines, as especially men under 55 have become more adventurous in their sparkling wine choices.
Meanwhile in the UK, the growth since 2019 slowed down a bit in 2023, but still one in three wine drinkers regularly drinks sparkling wine. However, it seems Brits are more set in their choices with 41 percent of the sparkling wine drinkers sticking to known brands. Nonetheless, this has not translated to Champagne hanging onto its market share. Instead, English sparkling wine, Crémant, and low-alcohol sparkling wines have been driving the growth.
