This year, bubbly is booming

Expect a shortage of champagne next year as demand grows.

TORONTO GLOBE AND MAIL

This year more than ever, champagne producers will have special reason to pop open bottles of their own product on New Year’s Eve: Sales are on a tear.

India, Russia and China are partying like Britney, Paris and Lindsay, apparently, posting annual champagne-consumption increases well above 30 percent, smitten by the drink’s iconic status as the celebratory sip of Western sophisticates.

But the boom is hardly confined to emerging-thirst countries. Coasting on a global obsession with all things bling, France’s most famous sparkling wine is enjoying its largest gains in absolute terms from big, bubble-belting markets such as Britain, the U.S., Germany, Belgium, Italy, Switzerland and Spain. Even Canada, a laggard among developing countries at just 1 percent of export consumption (roughly equivalent to one good sip per person annually), posted an admirable 11-percent gain last year.

Since the early 1990s, global sales have swelled almost 50 percent to 320 million bottles, up from 220 million. And they’re accelerating. Worldwide exports last year expanded 9 percent in volume over the previous year.

By far the biggest segment of growth has been roses, the glamour-imbued pink style that has more than quadrupled in popularity over the past decade.

But for consumers, an ominous statistic is emerging from the otherwise bullish numbers. As of 2008, champagne will face an official shortage, with even higher price increases than usual on the way and stricter rationing of key brands.

The problem is that Champagne, a region of undulating hills and chalky soils about 90 minutes east of Paris, measures only about 81,510 acres. Based on a maximum output of 4,050 bottles per acre (in a good year), the annual production ceiling is 330 million bottles or so. A lot of wine, yes, but as of this year, demand exceeded that maximum supply.

“This year we’re going to be at the maximum,” said Bertrand Deltour, market director in Canada for Moet Hennessy, the wine and spirits division of LVMH Moet Hennessy Louis Vuitton, which owns top-selling champagne brands Moet & Chandon, Veuve Clicquot, Dom Pirignon, Krug and Ruinart. “The shortage is real.”

In fact, shortages of some limited-production cuvees have already begun. In Canada, Moet Hennessey this year was forced to ration its excellent, and trendy, $77 Veuve Clicquot Rose, limiting distribution to just one province, Ontario. “We don’t have enough to sell in other provinces,” Deltour said.

The supply crisis (if you can call champagne rationing a crisis situation) is expected to be so strong that France’s agency in charge of wine-growing appellations announced last month it was proposing the unusual step of significantly expanding the region’s borders.

The move, which would take many years and require European Union approval, would be a big economic windfall for the outlying farmers. Land within Champagne can sell for 100 times or more as land just over the Champagne border, which surrounds the cities of Reims and Epernay east of Paris.

But the hallowed region’s success may eventually have an even bigger and more fruitful impact on the rest of the French wine industry than just the gerrymandering of its own borders. It is already being closely watched by long-suffering producers in regions such as Bordeaux and the Languedoc, hundreds of whom are teetering on the brink of bankruptcy because of declining domestic consumption and global competition from the generally more easy-drinking wines of California, Australia and Chile.

The moral: Champagne excels at two things the French wine industry is not known for, slick marketing and consistent quality.

Champagne, though governed by the same convoluted appellation laws that supposedly guarantee wine quality throughout France, has always played by its own, far more consumer-friendly rules.

Sure, the wine’s complex flavors and crisp acidity are direct products of the region’s famous white-chalk soils and bracing northern climate — two variables that French wine aficionados collectively refer to as terroir. But few people except for those aficionados care. One thing the general public has grown to appreciate most about champagne, particularly the so-called non-vintage variety that makes up the bulk of sales and has been experiencing virtually all the growth, is the consistent quality of its brands year after year. No other French wine region comes close.

The reason? Blending. Nonvintage champagnes are a marriage of wines spanning several years and wide swaths of vineyard land. These super-blends are otherwise considered anathema in the world of fine French wine, whose appellation system is designed to stress the unique charm of specific vineyards and vintages. But it means juice from a good year and a good vineyard can be used to hide the defects of a lesser wine, enabling the winemaker to craft a consistent house style that is more a signature of the brand than a particular place in time.

The other big attraction of champagne for most people, of course, is its symbolism. As a good-life icon, it’s up there with Gucci and Mercedes. Deltour calls it a wine that operates in a “totally different category” from all others. “Champagne has been able to create a trademark, a brand name. The name champagne today stands as a luxury brand.”

And, from a wine-marketing standpoint, it stands as a triumph of brand over land.