Champagne Sales Are Slumping. Is Prosecco to Blame?
Few sounds are more joy-inducing than the seductive and universally recognizable “pop” of a sparkling wine cork: an instant Pavlovian call to arms for celebration, good times, and good drinking. But troublingly, the wine world currently has few reasons to toast in its continuing epoch of bewildered reckoning.
According to the latest macro analysis from the International Organisation of Vine and Wine (OIV), an intergovernmental body providing guidance to the wine and grape-growing industry, overall global wine production is now at its lowest point since the turn of the millennium. And though shorter-term weather events have conspired to aggressively amplify the plunge into this recent abyss, the overarching trend for the past 25 years is a clear line sloping downward. Perhaps more menacingly, global wine consumption itself has reached its lowest point since 1996, according to OIV estimates.
Needless to say, it’s been a startling slap in the face for the industry.
But then there’s bubbly. In sharp contrast to everything else occurring in the global wine market, from 2017 through 2022, the sparkling wine category has consistently and convincingly defied the downturn. Over that timeframe, according to global drinks industry analytics firm the IWSR, sparkling wine’s slice of the U.S. wine market pie grew by half, from 8 to 12 percent. Though a recent plateau has been reached for the sparkling category, the forecast points toward a continued surge in popularity and sales.
Yet, a clear champion has emerged in the global race for effervescent influence. In relative comparison to wine overall, the good times continue to roll for all things bubbly, but none have dominated the field more so than that Swiss army knife of fizz, Prosecco. The northern Italian darling continues to crush all competition, with bottling figures for the product reaching all-time highs in 2024, according to the Prosecco DOC Consortium. It’s an astonishing achievement, made even more eye-popping by the trumpeted statistic that “Prosecco DOC now represents nearly 25 percent of Italy’s total DOP (PDO) wine production.”
That’s right: A quarter of all protected-designation wine production in Italy is now Prosecco.
Meanwhile, Champagne has had a good run over the past decade, especially during the late-Covid era. But the gearbox now appears to be seizing up for Champagne, as sales have recently slumped, with volume export demand dropping to its lowest point since 2002.
With Champagne’s CAGR (compound annual growth rate) receding by 7 percent from 2021 to 2023 — contrasted with Prosecco’s increase of 5 percent over the same period — the question begs to be asked: Is the Italian sparkler coming for the French wine’s crown?
Champagne Problems Are Aligning
Like the rest of the bubbly category, Champagne had been riding a convergence of beneficial factors. “The overall picture is that for 10 years the category has grown at a pretty decent clip,” says Richard Halstead, COO of consumer research and custom analytics at the IWSR. “In the wake of the financial crisis [it grew]. I think that sparkling wines as a whole … they are aligned with a number of basic consumer needs that are becoming more apparent with the march of technology and the way people live.”
The naturally Instagrammable aesthetics of fizz have worked wonders for the category, he explains, and adds that post-pandemic social interactions have become more cherished and celebratory — environments befitting sparkling wine consumption.
“Some Champagne producers would argue that their product doesn’t compete with Prosecco, but from a general consumer point of view, it appears to occupy a very similar position and need state.”
But a divergence is taking place as premiumization is biting back amid economic worries and the new U.S. administration’s trade histrionics. Even though Champagne remains the qualitative pinnacle of global bubbly, that can be a double-edged sword during a time of global economic trepidation.
“Champagne operated at the high end of what the market was doing. The last 12 months have been different, and premiumization in general has been affected,” says Ian Downey, executive vice president of Winebow Imports, which represents both Champagne and Prosecco, among other global sparkling wines, in its portfolio. “[Champagne’s] not falling off the map, but there’s definitely a softness.”
Throw in the industry-wide struggles with climate change — not to mention the painting of alcohol as the bad guy du jour — and the stars seem to have suddenly aligned into a bad sign for Champagne’s present situation.
But are Champagne drinkers really “trading down” to Prosecco? (All due apologies to the region’s high-quality artisanal producers.) Surely those who enjoy and appreciate the monarch of fizz don’t see Prosecco and the like as viable replacements?
Champagne Drinkers Diversify
When pondering this hypothesis, my gut reaction as an experienced wine professional was “Of course not. Champagne exists in a category all its own. Champagne aficionados are a loyal and particular bunch.” But for the typical Champagne-drinking civilian, there’s actually a lot more gray area and willingness to cheat on Champagne than many of us pros would like to think.
“Everyone and their brother is putting something sparkling on the shelf … [and] on-premise, Champagne is losing by-the-glass spots.”
“People who drink Champagne generally have a wide repertoire of different things they drink,” Halstead at the IWSR says. “Some Champagne producers would argue that their product doesn’t compete with Prosecco, but from a general consumer point of view, it appears to occupy a very similar position and need state.”
The IWSR data shows that most Champagne drinkers, in a pinch, will readily reach for still wine or other sparkling wines — in that order — as a substitute. He adds that the typical Champagne drinker tends to be distinctly social and still wants to go out when the economic situation gets rough. Additionally, many view the entire concept of sparkling wine as part of their lifestyle, and they’ll willingly accept Champagne substitutes if financial pressure forces their hand.
With the overall sparkling category currently viewed as a market safe haven, a rush of competition is now crowding the segment.
Master Sommelier David Glancy, sparkling wine specialist and founder of the San Francisco Wine School, says major players have entered the sparkling space to capitalize on the bubbly trend. “I walk grocery store isles, and I see more and more producers making sparkling wines,” he says. “Everyone and their brother is putting something sparkling on the shelf … [and] on-premise, Champagne is losing by-the-glass spots.”
Both Downey and Glancy say that the competition from other top-tier traditional method regions has to be taken seriously now. “Some people are jumping into English sparkling wines,” Glancy says, also giving a nod to South Africa’s Cap Classique as a legitimate competitor. Similarly, Downey points to Italy’s Franciacorta.
Likewise, the boom in cocktail culture has cut into Champagne’s share. According to the IWSR’s Bevtrac data, a 15-market longitudinal consumer study that interviews approximately 20,000 consumers every six months, “U.S. Champagne drinkers are also more likely (compared with U.S. drinkers generally) to be cocktail drinkers,” with those concoctions far more likely to leverage Prosecco’s combination of mix-worthy price and broadly compatible flavor profile. And as much as some cocktail cool kids would like to declare the spritz culturally dead, Downey says the hordes of holiday sunseekers continuing to crowd European and American shores definitely testify to the contrary.
“You can’t do what happened to the Prosecco category with all sparkling wines. The category has become so commoditized. Even for the trade at this point, [Prosecco] has become very large-brand-centric.”
Interestingly as well, the trendy weight-loss medication Ozempic, which also appears to suppress alcohol consumption, is significantly more likely to impact Champagne specifically, with IWSR Bevtrac data stating that “U.S., Champagne users are nearly twice as likely to use Ozempic (21 percent vs. 12 percent for all drinkers),” and that Champagne drinkers are “more likely to use cannabis in all its forms.”
There’s also an appealing predictability to mass-market Prosecco, along with a price point to match. Both of these traits serve it well in an economic downturn. “Prosecco seems to be able to market itself as an aspirational product that is also accessible,” Downey says. “You can’t do what happened to the Prosecco category with all sparkling wines. The category has become so commoditized. Even for the trade at this point, [Prosecco] has become very large-brand-centric.” That might not sound appealing to hardcore wine aficionados, but it’s a siren song for the average cash-strapped consumer and industry buyer looking for reliable, abundant, and inexpensive.
It’s all adding up to a Champagne drinker who is not necessarily trading down from Champagne, but rather diversifying outward. “It’s just now mixed in with things that are more affordable regularly,” Downey says, as they stagger Champagne consumption with alternatives to stretch their dollar without sacrificing the image and feel of the bubbly lifestyle.
Can Champagne Bounce Back?
Prosecco, it seems, is certainly playing a part in Champagne’s ongoing downturn, but it isn’t the main antagonist. In truth, there’s no single villain to blame, but rather a lineup of minor baddies all teaming up against the iconic fizz.
But not all is lost for the Champenoise and their incomparably revered sparkling wine. It appears that the current travails aren’t permanent in nature, but rather the convergence of multiple cyclical trends conspiring with ongoing cultural transformation to induce an intensified dip — one that should bounce back to a degree and level off.
But there’s work to be done.
Downey at Winebow points to a generally under-experienced on-premise workforce post-pandemic that needs to be trained up, and Glancy believes that the best way to begin is for Champagne to reclaim abandoned slots on by-the-glass lists. Champagne premiumization may have gotten a bit ahead of itself, and he’d like to see more dealmaking on BTG volumes in order to strike the right tune that appeals to all involved. “Still luxury, but something the restaurants can still make money on — and therefore push volume,” he says.
Accessibly priced Champagne by-the-glass served by empowered, knowledgeable barkeeps and waitstaff? That’s something we can all get behind.
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