It’s true, Champagne is harder to find these days. After a plethora of disruptions, the United States (US) is currently in the early stages of a Champagne shortage that is expected to last several years.
Supply chain issues caused by the coronavirus pandemic has left importers scrambling to guess what to order months in advance since delivery to the U.S. can now take twice or even three times as long.
The Champagne market has fluctuated over the last 18 months. In 2020, the demand for Champagne dropped 18% by volume, according to Comité Interprofessionnel du Vin de Champagne (CIVC). Towards the end of the year, people wanted their celebratory drinks back and champagne sales unexpectedly soared.
This trend continued throughout 2021. Consumption statistics estimate the demand for Champagne is going back to pre-pandemic levels.
The return to pre-pandemic sales has caused a ripple of new challenges. The CIVC sets Champagne production levels every year, singling out how much can be harvested, how much should be reserved for future multivintage blends and how much will be turned into vinegar. In 2020, as countries experienced lock downs and demand fell, the board set the limit for Champagne production 25% less than in 2019.
Thatcher Baker-Briggs, a retailer, importer and owner of Thatcher’s Wine Consulting says, “The initial decisions made by importers to slow—or even more drastically, to stop—importing wines is really a larger issue than the supply chain.”
The law requires Champagne must spend a minimum of 15 months in its lees to be sold internationally.
The Champagne region also experienced unprecedented weather issues. First came scorching heat in March, which burned vines. Then came days of frost that froze the vines. In June and July, torrential rains created mildew on many of the remaining plants. Several growers lost the majority of their vines. This year’s grape harvest is expected to be the smallest in decades.
The economics of Champagne continue to evolve. “The trend towards premiumization is impacting Champagne as well,” says Gabe Barkley, CEO of MHW, Ltd., a wine and spirits importer.
“The demand for top cuvées is growing—and their prices increasing—at a faster rate than we have historically seen.” He highlights Moët Hennessy Louis Vuitton’s February 2021 acquisition of Armand de Brignac, which produces Ace of Spades.
The question looms – When will the shortage end?
Production won’t be back to normal for several years, and prices will likely continue to rise. Even with a perfect supply chain, the time and materials required to create Champagne means inventory can’t catch up in a day.
“It looks like supply chain issues will last into 2023,” says Vakil. “Labor and raw material shortages, port bottlenecks and climate change are crucial components delaying the production and shipment of Champagne globally. Unfortunately, we’re seeing that supply can’t keep up with an increased demand for Champagne during the industry’s busiest time of year.”
