Thursday, December 29, 2011

Champagne & Caviar

Blink:
Saturday night before you indulge in some champagne and caviar, here is a luxury market update for both treats that you might find interesting.

Read On:
The Chinese are coming!

Have you noticed the recent spike in champagne prices? For some of the more popular brands, I have noticed double-digit increases. The production in Reims, the leading champagne region in France is currently capped at 330 million bottles. Their production costs have skyrocketed due to the increased cost of grapes and land, because most of the major brands do not own vineyards, thus buy their grapes from independent growers. More importantly, due to the growing demand for bubbly amongst emerging countries like Brazil, Russia, India and especially China, global supply is now under extreme pressure. The bad news is Moet Hennessy which markets some of my favorite labels (e.g., Veuve Clicquot Yellow Label, Veuve Clicquot Rosé, etc.) is on limited allocation. The good news is they recently partnered with a Chinese company to build a vineyard in northwest China.

On the flipside, caviar despite its luxury status, is maintaining its current market prices. Why? For starters caviar is not a brand name. Did you know that fish eggs other than sturgeon pass for caviar? Furthermore, the Russians and Iranians who cornered black caviar made exclusively from Caspian sturgeon, are being challenged by sturgeon fish farms located in Finland, Spain, the United Arab Emirates and of course China. Google revealed that there are no reliable caviar stats. Production apparently peaked at 550 tons in the 70’s all from wild sturgeon populations which are now an endangered species due to pollution, dam building along the Volga River and poaching. Farm production currently estimated at 250 tons is expected to triple in the next decade.

Bottomline: At the end of the year, higher champagne prices will be offset by lower caviar prices for future New Year’s Eves.

新年快乐
(a.k.a. Happy New Year!)

3 comments:

  1. Interesting and timely commentary here. China does have the man power to produce most everything it seems.

    有一個繁榮的新的一年

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  2. Good to see that caviar is stable. Me likey. (ANd technically, champagne can ONLY be grown and processed in the Champaign region of France...but YOU know that!)

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  3. Cheers. Happy New Year. Can't wait for 2012.

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