From Terroir to Table: A Deep Dive into Champagne Market Terroir Influences

From Terroir to Table: A Deep Dive into Champagne Market Terroir Influences

The Champagne Market is estimated to be valued at US$ 7.67 Bn in 2023 and is expected to exhibit a CAGR of 5.0% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.

Market Overview:
Champagne is made from grapes that are grown in certain areas of France. This wine is fermented twice to produce carbonation. It is known for its fine bubble texture and complex floral, fruity and yeasty flavors. Champagne is considered a status symbol and is consumed during celebrations globally. The wine enhances the image and taste experience.

Market key trends:
Champagne is witnessing high demand from millennials globally which is a key trend driving the market growth. Millennials prefer premium sparkling wine and want unique drinking experiences. They are experimental with their tastes and willing to pay a higher price for premium products. As a result, champagne producers are focusing on innovative packaging, limited editions and developing more luxurious premium brands targeted at millennials. They are also investing in digital and social media marketing campaigns to attract younger consumers. This rising millennial demand for champagne experience is estimated to significantly contribute to the market growth over the forecast period.

Porter's Analysis

• Threat of new entrants: The champagne market has high requirement for grape varieties and production process that requires high capital investment limiting threats of new entrants.
• Bargaining power of buyers: Large buyers like supermarkets have significant bargaining power due to their purchasing volume compelling producers to offer competitive prices.
• Bargaining power of suppliers: Since grapes and other raw materials have limited supply concentration, suppliers have moderate bargaining power over champagne producers.
• Threat of new substitutes: Though sparkling wines pose competition, champagne preserves brand image and exclusivity facing limited threats from substitutes.
• Competitive rivalry: Being a mature market, rivalry among champagne market players is intense necessitating innovative branding and marketing strategies.

SWOT Analysis

• Strength: Champagne enjoys a luxury brand image and extensive distribution network globally. The protected designation of origin designation assures quality and authenticity.
• Weakness: Champagne production is susceptible to climate change volatile weather patterns impacting grape yields. Declining consumption in key markets like Europe is also a concern.
• Opportunity: Emerging markets like Asia Pacific and Latin America offer high growth potential driven by rising incomes and exposure to western lifestyles.
• Threats: Trade disputes and rising import tariffs can weaken competitive positioning in major export markets like the US. Substitution threat from domestic sparkling wines also looms large.

Key Takeaways

The global champagne market size is expected to witness high growth, exhibiting CAGR of 5.0% over the forecast period, due to increasing social events and celebrations.

Europe dominates the global champagne market with France accounting for over 95% of the production volume. Changing lifestyles and rising disposable incomes in Asia Pacific are fueling demand for premium beverages in the region and is anticipated to be the fastest growing regional champagne market.

Key players operating in the champagne market are Moet & Chandon, Nicolas Feuillatte, Laurent-Perrier, Piper-Heidsieck, Champagne Pommery, Louis Roederer, Champagne Lanson, Champagne Pol Roger, Krug Champagne, Champagne Cattier, Pernod Ricard SA, and Bollinger.