James Bond, champagne houses for sale, spooky vines – sipped & spit
SIPPED: sizzle
Chateau Angelus will be James Bond’s choice of red wine, reports decanter.com. The movie had an “unbelievable” impact on sales of the St. Emilion wine, says owner Hubert de Bouard. No word of how much, if anything, the tie-up cost. Just think what it would have done if he picked a cabernet franc from the Loire!
SIPPED: more sizzle
After recent successes in Hong Kong, auction houses Sotheby’s and Christie’s graced New York with sales this past weekend. The Sotheby’s sale grossed $5,403,527, blowing away the estimate, and the Christie’s topline was $3,652,140, a high for them for this year. Absentee bidders from Asia featured prominently.
SIPPED: fizzle (not fizz)
While Napoleon Bonaparte could always find a reason to have Champagne, whether in victory or in defeat, Remy Cointreau has found a reason not to: lack of profits. The cognac and spirits maker has engaged a bank to find a buyer for its unprofitable Champagne businesses, which include Charles Heidsieck and Piper-Heidsieck. Interested in their margins? Poke around their helpful web site where they lay bare the financials of their divisions, including €96.7mln sales for Champagne with a €4.0mln loss. [Bloomberg]
SIPPED: spooky vines
NBC is developing a series (not yet even a pilot) revolving around a “troubled family desperate for a fresh start that takes over a Napa Valley winery whose ancient vines possess dangerous mystical powers.” Aha! All those ancient vines in Napa… [deadline.com]
On November 16th, 2010 at 11:29 am ,Charlie Olken wrote:
Re Napa vines with mystical powers.
There are much older and scarier looking vines in Lodi than in Napa. Word has it that NBC has just made that discovery and is already planning a sequel to the Napa project, whose title of VINES, simply misses the point about those supernatural powers. The Lodi sequel will come closer with its title, Lodi ScissorVines.
On November 17th, 2010 at 4:55 pm ,Sherman wrote:
Let me guess — the spooky vines were planted over the remains of an ancient native burial ground. I can see the marketing tie-in now — “Poltergeist Wine.”
They’re heeeeeeeerrreeeee —
On November 17th, 2010 at 9:24 pm ,Michael wrote:
It astonishes me that R-C cannot make these champagne houses profitable. It seems that the overhead must be very low, contracts locked in, etc. Here’s an idea LOWER YOUR PRICE. Really, Champagne could sell so much more with a lower entry level. Its hard to convince buyers that the wine is for everyday when the entry price is $30+ retail for even the most basic of the wines.
On November 18th, 2010 at 11:12 am ,Dr. Vino wrote:
Charlie – maybe the prequel?
Sherman – could be…but I think they’d need an additional permit for that. 😉
Michael – I agree. In the face of severe economic headwinds in the past couple of years, it is shocking how little discounting there has been in Champagne.
On November 18th, 2010 at 11:46 am ,Charlie Olken wrote:
With prices for vintage-dated Champers running $60-80, even for grower bubblies, there does not appear to be much suffering being felt by most producers. Whether Remy could have lowered prices to gain market share is a different question, of course, but their brands have not had much cachet recently and that is a problem both for production and marketing.
On November 19th, 2010 at 1:44 am ,Florence wrote:
You guys are off base on the recent pricing and overall profitability of the Champagne biz.
If you look at CIVC data you’ll see that in 2009 producers in Champagne earned the lowest price per case on their shipments to the US than they had since 1996.
Some points to keep in mind…
1 – You can’t judge the producer’s profits from the shelf price. You have no idea what kind of “spiffing†or “incentivizing†goes on along the value chain. Importers, wholesalers, retailers, and restaurants have all been more demanding recently because they’ve been in the drivers’ seat. No it’s not all of them of course, but champagne producers big and small have had to line the pockets of every step of the way to the consumer, and that sometimes doesn’t end up being reflected on the shelf. It still kills the producers’ profits. Last year I saw one deal in the trade where retailers could buy Perrier Jouet and get a bunch of free Absolut with it. I didn’t see any change to the price of PJ or Absolut on anyone’s shelf.
2 – The US market is small compared to France and the UK where there were tons of buy-on-get-one-free deals these last few years. I don’t recall seeing Remy’s brands do that but the “bogo†activity severely depressed overall pricing as brands tried to retain a shred of share. This depressed pricing in major markets must have majorly hurt champagne producers.
3 – Grape prices have outpaced the avg price per case from producers to the trade, meaning by definition lower margins at the producer level. Don’t take my word for it – check out this great paper: http://www.wine-economics.org/workingpapers/AAWE_WP64.pdf
It’s not just Remy’s brands that have suffered from these points which is clear from looking at other brands’ financial statements. The big issue Remy’s had from what I’ve read is that their union refused to let them lay anyone off. The union went on strike and basically won. So Michael, Remy’s overheads are doubtfully very low given that the category’s volumes were killed by the recession but they weren’t able to lay anybody off even though they didn’t need to produce as much.
Charlie, I couldn’t disagree more about these brands. As someone who avidly watches the champagne category, I think Piper and Charles Heidsieck both have cachet with different segments. Charles is killer quality and I’ve met few people who have tasted it that disagree. And it’s price/quality is good too. Piper is more marketing driven. It had a collaboration with a shoe designer last year that was all over the media. Also I was just looking at the latest Wine Spectator ratings (I know I know it’s not the end all be all) and out of all the champagnes it rated over the last year, 3 of the top 10 are Piper and 1 of the top 10 is Charles Heidsieck.
End of the day, Remy makes a barrel more money on a case of spirits than on a case of champagne. Always has always will – just like everyone else. For the life of me I don’t know why spirits companies bother with any wineries. They don’t get it, they don’t like the margins, they don’t like the cyclicality. Welcome to the wine biz. 🙂
I need to pop a cork now. Cheers!
On December 5th, 2010 at 10:11 am ,Dave Erickson wrote:
Little late, I know, but super post, Florence, thank you.