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Champagne, Advertising, and the Problem with Principles

They follow me everywhere I go. On the commute to work, in my favorite magazines, even on the web sites that I frequent. Everywhere I turn I'm being exhorted, admonished, and educated to umask the truth.

For whatever reason, I'm clearly the target demographic for what is obviously a massive advertising campaign by the Champagne Bureau, a U.S.-based organization whose charter is to "educate American consumers about the uniqueness of the wines of Champagne and expand their understanding of the need to protect the Champagne name in the United States."

These ads have become so prevalent in my daily life as to be annoying. Every time I visit Ad_champagne_unmask.pngthe New York Times website, every time I open my New Yorker magazine, and every day on my commute home, I see the same image.

But in the midst of my annoyance I got to thinking: what exactly is the problem they're trying to solve here, and why do they think that me and my fellow liberal, upper-income, San Francisco and New York citizens need educating? Sure, there are probably some producers in the United States who are still using the word Champagne on their labels, but how big a problem is that really, when the U.S. Government and a number of our wine regions have had a signed agreement since 2006 making it illegal to use the word Champagne (among others) on any new label?

The Champagne Bureau claims that 50% of the sparkling wine sold in the U.S. is mis-labeled as Champagne. This is a statistic based on something called the Gomberg Report, which is a set of market data collected by Gomberg, Fredrickson, and Associates. Unfortunately both Gomberg and the Champagne Bureau refused to share any of that data with me, or sell me a version of their report (Gomberg told me they screen all purchase requests to make sure the report isn't bought by journalists) so apparently we have to take them at their word. Which is not something I'm particularly excited about.

My first stop in trying to validate or even get some perspective on this number was the government's COLA database of approved wine labels. Between when records start in 1981 and 2004 when the last such label was approved, there were only 104 American-made sparkling wine labels ever approved in the United States with the word "Champagne" in them. Unfortunately, the government's database does not tell us which labels are still in use commercially, but it is clearly a tiny fraction of that overall number.

To get a sense of how many wines really do still use the word Champagne on the label, I did some trolling around the Internet's largest sellers of wine. Sadly, I have no visibility into the country's two largest wine retailers, Costco and Wal-Mart, but Beverages and More carries 16 sparkling wines made in America that have the word Champagne on their label, with the majority from Korbel, Andre, J. Roget, and Cook's brands. Wine Library carries 11 American Sparkling wines from the same suspects. Wine.Com carries none, and practically every other specialty wine retailer that I know of carries none as well.

The reason that most major wine shops don't carry these wines? The average price point for a bottle of American sparkling wine with the word "Champagne" on the label is $8.21. The most expensive is $18.99, and the least expensive is $1.99. The majority cost between $4 and $7.

Certainly Korbel, and J. Roget (which is owned by Constellation Brands) must crank out a lot of wine each year, but could they and the few others that were grandfathered in under the 2006 agreement (no new labels were permitted, but already approved labels were allowed to keep the word Champagne on them) really make up 50% of all the sparkling wine sales in America?

I suppose it's plausible, but the more I looked into the problem of American "Champagnes", the more I began to think to myself how little it mattered what the actual sales volumes of these wines were. Not a single one of these wines would ever compete with real Champagne in the marketplace, and frankly very few of the people buying these wines would even consider buying something four times the cost, no matter where it came from. The cheapest Champagne I could find for sale anywhere in the United States is $20.78 (at one retailer), and the average price (not actually calculated by me) among the 1601 different Champagnes that Wine Searcher shows as being sold in the United States seems to hover around $40.

When I asked the folks at the Champagne Bureau whether their campaign to unmask the truth was based on a concern over market-share or purely based on principles, their quote generator cranked out this official statement for me:

"The issue of misleading wine labeling is first and foremost a consumer right's issue. Especially in this tough economy, consumers have a right to know that when they spend money on a bottle labeled "Champagne" they are getting what they pay for. More than 50 percent of the U.S. sparkling wine market is mislabeled as "Champagne," even though the grapes used in those wines do not originate in the Champagne region of France."

Which is a really boring way of trying to sound like consumer advocates while essentially saying, it's not a question of competition, it's a question of principle.

So let me just say this: I agree with the principle. Place names are important, and should be both respected and protected.

But given that the people who happen to be buying $5 bottles of sparkling wine made in America with the word "Champagne" on the label are most likely never, ever, going to be buying a bottle of true Champagne, what, exactly is the point of a million dollar ad campaign that is ostensibly about educating these same consumers?

And isn't it a complete waste of money to be pushing this message to the people like me who are actually LEAST likely to buy one of those $5 bottles?

Half of me wonders whether the whole thing isn't aimed at consumers at all, but instead at the executives of the companies who still produce these wines, as those folks are pretty likely to live in San Francisco and read the New York Times like me. I'm sure it doesn't escape the notice of the folks at Korbel that it's one of their bottles of wine behind that mask.

I suppose this whole thing wouldn't have gotten my knickers in quite so much of a knot were it not for one additional salient fact: Champagne, especially the good stuff, is really fucking expensive. My cynical side wonders how much cheaper Champagne might be if the region didn't spend millions on such ad campaigns. In a recession where I'm seeing wine discounts starting at 30% off and rapidly driving down to 50% and 60%, most Champagne houses haven't come anywhere near that level of discounting. Why is that?

If the folks in Champagne really wanted people to understand and appreciate how special their product is (and I really do believe it is special, and think everyone should drink a lot more of it) they might think about some ways of getting real Champagne into the hands of more consumers, instead of throwing millions of dollars away on advertising campaigns that I believe ultimately aren't going to produce any more Champagne drinkers.

Comments (24)

Tom wrote:
02.12.10 at 5:50 AM

I agree about the price issue. While there are some good reasons for champagne to cost more than some sparkling wines, many current prices are definitely overkill. There are some champagne bargains to be had, but not from the big houses, where consolidation at a time of greater demand has now left them with inventory they don't want to discount for fear that people will expect those lower prices even after they're buying more expensive wines again.

Martin Silva wrote:
02.12.10 at 6:03 AM

I don't agree with the ad campaign - especially after the 2006 agreement. The 50% statistic is plausible. Korbel alone make over 1 million cases of "Champagne". If you add other Constellation brands that also use "Champagne" - you end up way over the top. Domain Chandon, the largest sparkling wine producer in CA, comes in second at 700,000 cases of "Sparkling". From there, sparkling production really drops off. You're right though, the pricepoint of these so-called fake wines is far below our own domestic sparklers - but sales revenue comes in volume - so I'm sure it's worth it for the French producers.

1WineDude wrote:
02.12.10 at 8:27 AM

It would be *very* interesting to see a breakdown of the money spent on this campaign vs. the projected revenue losses to those selling true Champagne...

John in Virginia wrote:
02.12.10 at 8:47 AM

Just noted at local Costco here in Virginia that Moet White Star has come down to $27 a bottle from about $36 while Veuve Clicquot is still sitting at $37 a bottle. I would think they will move soon to compete.

Joe wrote:
02.12.10 at 10:08 AM

I must not be in the target demographic, because I haven't seen any of these ads.

I agree with Martin -- it is completely plausible to believe the 50% number, assuming the statement is "50% of all sparkling wine made in the US". You have a second statement saying "50% of all sparkling wine sales in America", which could be a very different number. Again, haven't seen the ad so don't know which statement is the one that applies.

Yes Champagne is expensive on the shelf but the production, storage, and transport is not cheap, either. And you did not address the issue of the Euro / USD exchange rate, which has greatly impacted the retail cost of Champagne -- and all wines imported from Europe. It looks as though the two currencies are coming closer, which, if the trend continues, should eventually help the consumer.

But I agree the bureau might want to consider better ways to get more Champagne into the hands of consumers -- maybe with more production of splits / half-bottles?

Sunny Brown wrote:
02.12.10 at 10:29 AM

Martin hit the nail on the head, it is not about dollars, it is about market share. Living in OH I can tell you that 7 out of 10 consumers absolutely think of sparkling wine as "champagne," Even if/when they know why Champagne is so protective of their name they may not really process the differences. Sad, yes. Worth a multi-million dollar campaign ad? Hmmm, but remember that Champagne itself in the US is built on campaign ads. Moet is owned by LV which is more known for cartier watches, fancy purses and yachts. It is 100% about image, and always has been. Vueve makes 1.3 mill. cases per year, and Feuillate's "winery" spans at least 10 city blocks, yet they would have you think their product unique, hand crafted and above all exclusive. The US Champagne Bureau (surely a shill for the Grand Marques) proclaims terroir the ultimate factor in quality, yet not a single Grand Cru town is mentioned anywhere on the website. Why? Because it is all about terroir when you compare Champagne and California, but clearly not about terroir when you make 1.3 mill. cases per year from all over the champagne region including from the Cote de Bar which is a 1.5 hour drive at 80 mph from the heart of Champagne. So in the end they must spend the money to appear exclusive, and for consumers to know the difference between Champagne and CA Champagne, because for many big houses it is not what is in the bottle that matters, but what it says on the label.

That being said, there is no greater drink on earth than a fine bottle of Champagne from a talented and conscientious grower that puts quality first and foremost.

Andy F. wrote:
02.12.10 at 2:11 PM

It's not just a question of competition or principles. Brand dilution is also a legitimate concern. Allowing the cheaper sparkling wines to appropriate the Champagne brand, devalues the Champagne brand.

Alder wrote:
02.12.10 at 3:36 PM


I understand your point but part of the point I am trying to make is that brands exist in the minds of populations. There is no Champagne brand to dilute in the population of people who are buying $3.99 Korbel Brut American Champagne.

John wrote:
02.13.10 at 10:25 AM

My little "he he" about this ad is that it suggests there's a city limits sign somewhere reading "Champagne, France." Kind of like an ad that says "Real Cotes-du-Rhone Village ONLY comes from Rhone, France."

John wrote:
02.13.10 at 10:26 AM

VillageS, sorry.

02.13.10 at 10:57 AM

I have a somewhat different take on the ad campaign. I think it is about market share-in the $20 and up price levels. And it all goes back to the notion, mentioned by Sunny above and others, that most people say Champagne eveh when they mean CA sparkling wine that is designated as sparkling wine.

If the Champagne boys can convince American consumers that Schramsberg or even Roederer/Anderson Valley or Domaine Chandon or Mumm Napa are not "Champagne", they can lower the appeal of those labels to some folks who want to drink "Champagne"

I don't expect that the Champagne boys think they are going after market share in the under $10 price point. Look at Alder's statistics on Champagne prices. It is not Cooks or J. Roget in their cross-hairs--although it may be Korbel who sell a heck of a lot in the over $10 area, And let's say that the average punter is out to dinner for a birthday or anniversary and sees Korbel Chardonnay Champagne on a list at $30 or a lower priced Champagne at $50 or so, would not that person, who probably is not going to buy more than a bottle or three of Champagne a year, also the target?

So, yes, it is about name-recgnition because name-recognition can change some buying decisions.

And think about it. Champagne cannot compete with CA for the entry level good bubbly drinker on the basis of price. Gloria Ferrer, Scharfenberger, Roederer and Dom Carneros Bruts all show as well or better than most $40-45 non-vintage Bruts these days--and the structures are the same, as is the aging regimen. And the CA wines sell for half the price of equivalent Champagnes. That is what so much of this about as I see it.

Charlie Olken

Kevin wrote:
02.13.10 at 6:43 PM

I wonder, would sales of brands like Korbel drop if they removed Champagne from the label?

I don't have a problem with the money the Champagne folks are spending on trying to protect their name, no more than I would if Napa Valley were to do something similar. I mean, what wouldn't be cheaper if there weren't money being spent on it?

rs wrote:
02.14.10 at 10:23 AM

My wife and I tried, but gave up asking waiters, even at fine restaurants, for a couple of glasses of sparkling wine, only to be asked if we preferred Perrier or Gerolsteiner. So now we ask for "champagne" (lower case) and are then asked if we want the Roederer or Domaine Chandon, etc. Champagne is like Kleenex or perhaps kleenex. You know what you mean. Only a handful of restaurants, notably high-end have true Champagne by the glass, and at $15-$20 per glass, well you can assume it's not plonk.

Sam wrote:
02.14.10 at 10:24 PM

This ad campaign has nothing to do with the sanctity of the Champagne name, and nothing to do with the quality of wine produced in the region or with the inappropriate use of the appellation on other labels; this is all about winning the news cycle, as the pols say. Champagne is the most recognizable brand in the world, and there is no such thing as bad publicity (unless you are an Austrian wine/anti-freeze producer in the 80s). All they are trying to do is drum up a false controversy that belatedly focuses the bright light of American attention on the quality and relatively limited supply of their wines. No one in France is concerned with Korbel or J. Roget in the least, and vice versa, other than handicapping the boards of directors of Constellation and LVMH as they race their yachts on the Mediterranean. As American oenophiles have this fake controversy thrust upon them, undoubtedly there will be some who celebrate and sanctify true Champagne out some misguided feeling of righteousness, and this little bump in sales and loyalty is all that the Champagne producers are looking for. When you are at the top, you can do three things: be complacent and condescending (like Bordeaux), act insane and try WAY too hard, or play every advantage like the seasoned professionals that you are. Guess which one the Champenois have chosen...

Anthony wrote:
02.15.10 at 5:34 AM

"Champagne, especially the good stuff, is really fucking expensive."

Ha ha - I love it Alder. It is a shame - because if I could find something here in Italy that was 20 euro a bottle I would buy it - but it is still all around 40 euro and up here. And I have a first hand account of a wine retailer here who was offered some famous name Champagne from a broker at HALF the regular price - for as much as they wanted (hundreds of cases if wanted). One problem here is if the retailer if getting a hugh discount, they still can't make the leap and discount the retail price!

Simona wrote:
02.16.10 at 6:23 AM

This time I am not with you, Adler. I agree with Andy and furthermore I think it is important that people know the meaning of a word and what there is behind it, no matter if they can or cannot afford/are or not interested in buying the real Champagne.
I am happy for this kind of campaign, as I am for the ads about real Parmigiano cheese or whatever product connected to a certain area, both for consumers rights and producers rights.

Vodkasniffer wrote:
02.16.10 at 1:54 PM

As usual the french are full of themselves.. whats new?

KC wrote:
02.22.10 at 5:13 PM

"Had a bit of J Champagne last night", I tell my friend. Now, he knows and I know it was not technically Champagne, but we both know exactly what I meant. If he said to me, "that is not really Champagne", he would not be called my 'friend'.
So what would be the effect if all these American versions changed thier label to 'methode champenoise'? (considering they are truly made in the correct style)

Ian NYC wrote:
02.23.10 at 11:11 AM

Just a tip for those looking for a good buy from Champagne is Grower champagne. The grapes are grown and produced by the same house, which is a rareity in champagne. They are usually 100% grand cru Chard and can rival some of the best Blanc de Balncs for a fraction of the price..and to RS, I am a sommelier in Manhattan and would murder any one of my staff members for comments like that to a guest.. Keep the faith, good wine guys are out there.

J. Fluteau wrote:
03.10.10 at 6:25 AM

AS most Americans, I used to think "champagne" was just the generic term for sparkling wine. But that was before I met and married my champagne grower husband, and began working with him in the family wine business, here in the "cote des bars" mentionned by Sunny Brown
Our company also used to produce a range of non-champagne sparkling wines, and some of those customers used to tell us that they would hide the label and let guests think it was champagne....this was meant as a compliment, but I would wonder why they felt they had to pass off our product for something it wasn't. Lets face it, champagne has snob appeal, and I sincerely doubt (yes Kevin) that Korbel would sell as well if they didn't usurp the term champagne.
ps I also agree 100% with Ian NYC - if you want authentic champagne, go with the Grower champagnes !

Dag wrote:
03.14.10 at 6:12 PM

Having experienced two large blind tastings of grande marque and grower champagnes this December, I have to interject that it's complete hogwash to say that "grower" is better OR less expensive. The results of both of the sets of over 20 wines we tasted (with a group of very experienced tasters along with some non-pro's) showed consistent preference for most of the grande marques over the growers. And almost all of the grande marques were cheaper than the grower bottlings.

The basic premise of the NM vs RM is flawed - it's not like NM's buy grapes on the spot market at harvest time in Champagne - they are the de facto vineyard managers. Who cares if they legally own the dirt if they direct how the vineyard is managed? (Coops are an entirely different conversation).

Just because some Grand Poobah Wine Snob calls grower champagnes superior (funny how he also just happens to import and sell them) it doesn't make it true. You're missing out on some truly excellent champagnes if you turn up your nose at many (agreed - not all) of the grande marques.

And by the way, I agree with you, Adler, on the whole ad campaign thing.

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William wrote:
02.15.11 at 4:25 AM

I live in Moscow and there is a lot of terrible sparking wine that is called Champagne. It is so bad that it would make Cooks taste good. They claim to have a right to call it Champagne:
"Under European Union law, as well as treaties accepted by most nations, sparkling wines produced outside the champagne region, even wine produced in other parts of France, do not have the right to use the term "champagne". In much of the former Soviet Union, including the three Baltic States, who are now EU members, the term Sovetskoye Shampanskoye continues to be used, with the governments of those countries claiming that the rights to the use of the word “Champagne” was granted in perpetuity to the Russian Imperial Government by the French and that this cannot be rescinded."

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