‘2017 was a very strong year’ says Moët director
Champagne icons Moët and Dom Pérignon enjoyed a “very strong year” in 2017, with growth in all regions, including Europe, the drinks business can exclusively report.
‘2017 was a very strong year for Maison Moët & Chandon’ according to the brand’s international director Jerome Seignon
Following a telephone interview with Moët & Chandon’s international director Jerome Seignon on Friday, db can confirm that Champagne’s most powerful group enjoyed rising sales worldwide, which included, significantly, Europe too – bucking a general trend of decline for Champagne demand in this region.
As previously reported by db, estimates from the Champagne region as a whole suggest that France and UK together saw a decline in shipments during 2017 of at least 10 million bottles, with decreases of 6m and 4m in these countries respectively.
However, shipments to all markets are estimated to have totalled 307.6m, a 0.5% increase by volume on 2016 – with growth widely believed to have been driven by strengthening demand for Champagne in the US, Australia and Japan in particular.
Importantly, such a rise in international sales has been enough to offset the losses in Champagne’s domestic market and the UK – the region’s first and second largest markets by volume.
Nevertheless, as reported on Thursday last week, LVMH, which owns Moët and Dom Pérignon, as well as Veuve Cliquot, Krug, Ruinart and Mercier, outperformed the overall market, posting a volume increase of 4% during 2017.
This is significant due to the scale of the group, which is estimated to account for about 20% of the total volume sales of Champagne, or approximately 60 million bottles.
If this number is accurate, then LVMH alone contributed an extra 2.4m bottles to Champagne shipments worldwide in 2017.
Although the group never releases the volume sales for its Champagne brands, Seignon was certainly upbeat about Moët and Dom Pérignon’s performance in the past year.
“2017 was a very strong year for Maison Moët & Chandon, with the growth in line with what has been said in the press – [4% up in volume] – both for Moët and a bit more for Dom Pérignon, which is doing very well,” he recorded.
When asked about individual sources of growth for Moët & Chandon and Dom Pérignon, he told db that “the growth is coming from everywhere on both brands”.
Continuing he said, “Europe – which is a traditional market for Champagne where we have many experts in Champagne and also strong competition – has been doing very very well with a strong growth on both Dom Pérignon and Moët & Chandon; in case of Dom Pérignon we are above 5% in volume, which is very dynamic.”
Indeed, speaking about Dom Pérignon specifically, he said that the release last year of three vintages for this Champagne – the 2009 blanc, 2005 rosé and P2 2000 – had helped the performance of the brand in France, “and the UK even more”.
“These two markets, which were suffering a bit in the past, have been leading the growth for Europe,” he added.
For Moët & Chandon, he said that the UK “has been very strong” for the brand in 2017, although he qualified this by admitting that volume sales were “almost flat versus the previous year”.
“We had to face the devaluation of the pound and the corresponding price increases, but, despite this challenging context, we were very happy – so we could confirm the strength of the brand in this historical market for Moët & Chandon.
“And in France we had interesting growth also for Moët & Chandon, which contributed to the growth of the brand – so the UK and France both delivered very positive results.”
Returning to the analysis of the global performance for both Moët & Chandon and Dom Pérignon, he said, “And the good news is also that North America – not only the USA, but also Canada and Mexico – is performing very well, above 5% again for both brands; it has been a very strong year for Moët & Chandon in the USA for the second year in a row.”
Partner Content
He added, “So the brands are very strong in the market of experts in Europe and a huge market like North America.”
Looking elsewhere, he said that “Asia is booming also on both brands, with Japan – which is a very strong market historically for the maisons – is growing strongly; and a younger market like China, which is almost double once again.”
He also revealed that Africa was performing well, along with Latin America, although he said that Dom Pérignon had suffered in the latter region due to the tropical storms.
“The only region a bit affected for Dom Pérignon, not Moët & Chandon, was Latin America and the Caribbean because of the natural disaster – and these small islands with their wonderful resorts are strong source of business for Dom Pérignon.”
“Overall it was a very positive picture on both brands across the markets, with no difference across the different profiles of consumers,” he summed up.
With the group’s investment in new winery facilities for its brands, and willingness to pay relatively high prices to secure grape supplies across the region, it is often said among commentators in Champagne that LVMH has plans to significantly increases its volumes, and it is believed that the group has an objective to reach 100m bottles in annual sales within the next 10 years.
When db asked Seignon whether such an ambition was true for the group, he stressed that it was growth in value, not volume, that was the primary objective.
“We are the leader and we want to confirm this leadership year on year, but for us, what is important is desirability – being the most loved brand as Moët & Chandon is a real privilege for us, and the priority for us is value always – it is a value game. If we can bring value then everything is ok; and that’s why the notion of desirability is so important.”
Certainly the rise in volume sales of LVMH Champagnes during 2017 is in line with a general trend in Champagne: the growth for the region is coming from strong brands with a truly international footprint (for example, Moët is sold in 154 markets).
Meanwhile, the declines seem to be coming from weaker brands – particularly grower Champagnes – that are focused on the domestic market, as well as own-label and exclusive label Champagnes sold on discount in the major supermarket chains of the UK and Europe.
“Boosting Champagne sales were a lot of high-low price promotions with exclusive labels, but that is definitely fading out,” commented Andrew Hawes, chairman of the UK Champagne Agents Association, during an interview with db last week.
Read more
CHAMPAGNE SELLS 4M FEWER BOTTLES IN THE UK IN 2017
