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Wednesday 23 April 2014

Krug crown starting to slip

23rd September, 2010 by Rupert Millar

Krug is losing ground to the other big names as Champagne sales pick up in expensive on-trade venues, according to Liv-ex.

krug.jpgYear-on-year, Krug vintages on Liv-ex have appreciated 0.03%, the smallest movement of all the brands on the Champagne Index.

The index also tracks Dom Pérignon, which grew 4.05% since last August and Cristal, the most successful over the same period, which had an 8.84% rise in value.

Speaking to the drinks business, Jimmy Metta, director of Vanquish Wine, said that the likes of 2002 Cristal, 2000 DP and Perrier Jouët Belle Epoque were doing extremely well and there was only a small dip in rosé sales.

“With winter round the corner, white has surpassed rosé sales but brands like Laurent-Perrier Rosé and Bollinger Rosé are still very strong,” he said.

Furthermore, high-end on-trade venues and private clients were providing the most custom. "High-end on-trade venues in central London are performing very strongly,” he claimed.

“People are now spending more on high-end products and it seems that we are getting over the worst with Champagne sales picking up significantly as well as larger formats. Our other strong demand is coming from our private client base, which order on a daily basis for dinners and events.

“We have noticed that the low-end and particularly the really high-end are performing the best as high net worth clients don’t want to trade down to a cheaper champagne and really only go for the best there is,” he concluded.

As for Krug, Metta said the brand had been slipping behind the others for the past 18 months. The reason, he claims, is that the house has not stepped up to the mark in terms of marketing and image in what is one of the most competitive markets in the industry.

“Competition is fierce and marketing is key to make the consumer feel special and this is something Krug has not succeeded in doing," he said.

"People spend a lot of money on Champagne and they want to know they are buying an experience and getting their money’s worth.”

Not that Krug is incapable of producing exclusive products. Far from it, as Clos d’Ambonnay and Clos de Mesnil each costing around £1,700 a bottle can testify.

Metta predicted that Krug would “go back to the drawing board” in order to, if not completely reposition the brand, then at least bring it back to what it once was.

“This is an important Champagne house with real history and they working hard to change people’s perceptions. They are smart enough to realize that there is a problem and want to do something about it.

“I don’t think they are trying to reposition this brand but they are trying to make it what it once was and reaffirm it as a front runner amongst the other blue chip Campagnes. Krug is and always will be a classic with strong roots and it’s only a matter of time until it re-emerges to fight back with the big boys.”

Rupert Millar, 23.09.2010

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