We are seeing more and more quality bubbly in Beijing, whether from major players such as France, Spain and Italy or lesser-known ones such as South Africa, Chile and China. That includes so-called ‘Grower’s Champagne‘. I asked Charles Simon of Seina a few questions about this category of wine and the products he sells.
The price of Champagne in Beijing is often three times or more than Cava or Prosecco or other sparkling wines. Why is it so expensive?
This is quite a complex topic as you need to consider many aspects of the business. The price difference starts even before wine-making.
Champagne was probably the first wine-producing area to arm itself with very strict production rules, this with the help of a legislator to ensure these rules would be enforced. The first set of rules came in 1927, and further, even stricter rules were added in 1935 and after.
These rules have been set in order to ensure a minimum quality that would be high compared to other sparkling wine-producing areas. This was designed to protect the reputation of the Champagne area, including its growers and houses, as well as consumers, with the message being that by choosing a Champagne you cannot make a bad choice.
The first effect of these rules was to increase the production cost of the grapes. To ensure the sustainability of grape growing for growers, thus ensuring they would not fight the rules, a base price is fixed every year for every village in Champagne. Many factors affect these base prices, the easiest one to see as a consumer being the quality of the grapes: autre cru (not mentioned on bottles), premier cru or grand cru.
In 2014, the average grape price per kilogram in Champagne was close to 6 euros, even higher if you consider only grand cru. You need about 1.2 kilograms of grapes to produce a standard 75 centiliters bottle of Champagne. Do the math, it’s already an average of 7.2 euros of production cost per bottle just for the grapes.
Without going further into details about the cost of Champagne, we can have a look at Cava in Spain. In 2013 the average grape price per kilogram in Catalonia, the biggest Cava producing area, was of 0.60 euros per kilogram, and the average ex-cellar price per bottle of Cava for export was of 3.90 euros. In other words, you can purchase a ready to drink Cava for about 55 percent of the cost of the grapes used in a bottle of Champagne. To be more precise, the average ex-cellar price per bottle of Champagne for export in 2013 was of 14.30 euros, close to four times more expensive than Cava. The average export value of a bottle of Prosecco (DOC and DOCG together) was 2.84 euros that same year.
We can wrap-up the average export value per bottle in 2013 at 2.84 euros for Prosecco, 3.90 euros for Cava and 14.30 euros for Champagne. Next step is importing these wines into China. For simplicity, we will skip the shipping cost and move straight to landed cost calculation. China charges import duty (14 percent), consumption tax (10 percent) and value-add tax (17 percent) when you import such wines. Still to keep it simple, we will say it add ups to about 49 percent of the value of your shipment to the bill. The import cost will be of 1.39 euros for Prosecco, 1.91 euros for Cava and 7.01 euros for Champagne. This further increases the gap in value between these three wines as we now total 4.23 euros per bottle for Prosecco, 5.81 euros per bottle for Cava and 21.31 euros per bottle for Champagne.
Last but not least, there is the maturity of the wine market in China. This makes pretty much any wine more expensive than it should be. Because of the lack of maturity on the trade side, and the lack of wine education on the consumer side, there is a lot of malpractice. Some by design, some by “mistake”. The most common one is selling-price calculation. Many actors of the market will simply apply a multiplier, whereas in more mature markets the multiplier would be paired with a profit cap (in value) to avoid overpricing. Some actors simply overprice by design because some consumers still think more expensive is better and ruthless traders make money on their backs. Then, because of the lack of maturity of the market, there are more middlemen with all the same bias. Again, it is just mathematics, and it the end, the consumer is paying the price for all of that.
Now, you said Champagne is often three times or more than Cava and Prosecco. Our quick computation put the landed cost of Prosecco and Cava respectively five and almost four times lower than that of Champagne. So, if you find a Champagne only three times higher, you probably found a channel which is more mature. Or could it be that the Cava and Prosecco channels are less mature?
You guys sell ‘Grower’s Champagne’. What’s the difference between that and brands such as Moet and Mumm?
Grower Champagne is a rather recent term. When using this term, we mainly talk about Champagne makers who produce wines exclusively from their own grapes. These boutique Champagne estates are always 100 percent family owned, often for more than a few generations.
For the consumer, an easy way to find out if a Champagne is made exclusively from grapes grown by the same grower, is to have a look at the Champagne label. Indeed, by law, the registration number of a Champagne brand has to be displayed on the label. Just look for two capital letters followed by digits. The letters give information about the type of brand. Is it a producer? A négociant? An OEM? Digits are just the registration number itself. This can be either on the front or the back label.
For Grower Champagne you want to look for the following:
RM (Récoltant Manipulant): your typical grower, producing wine exclusively from his own grapes with a maximum of 5 percent of purchases from other growers to cope with harvest issues or other wine-making concerns.
SR (Société de Récoltants): two or more growers sharing the same winery. Most of the time, they are from the same family: father and son, brothers, and so on.
Now there is a third one that creates debate because it is case by case: the NM or Négociant Manipulant. They may or not own vines and always buy grapes from growers to produce their own Champagne. The most famous NMs might very well be Moet, Veuve Clicquot and Mumm. It does not sound very much Grower right?
This is why I said it can create a debate. Moet is the biggest vineyard owner of Champagne with more than 1,000 hectares. However, grapes from their vineyard account only for 25 percent of their procurement when it comes to producing their 23 million bottles as of 2011.
NMs are not all that big. Moreover, some NMs use up to 70 or 80 percent of their own grapes to produce their wines. They are family owned, independent and used to be RM or SR at some point in history. How would you consider those? To me, they fit in the Grower Champagne category. Grower Champagne is more than just two letters on a label: it is a spirit, the spirit of independence, authenticity, character and terroir.
Behind the spirit of Grower Champagne, what I love is the fact that you pay for the wine, and only the wine. Indeed, most of the Growers do not spend a single cent on marketing and promotion. On the other side, the big NMs spend a lot on marketing and promotion, building their brand and fame. So with these Champagnes you do not only pay for a wine, but also for a brand. Be careful, I am not saying one is better than the other, it simply is a different spirit serving a different purpose.
Brand sensitive people will always go for the big names, they are label drinkers. For wine lovers, I invite them to be more daring. My rule of thumb? If I never heard of it, I have to taste it!
How did Seina start, what wines do you carry, and where can consumers buy them?
Seina started as an intrapreneurial project within my brother-in-law’s company back in mid-2011. It basically was a small import activity mainly focusing on Bordeaux wines, but we always had Champagnes in mind.
We started to work seriously on the Champagne project in late 2012, moved from intrapreneurs to entrepreneurs in 2013 by founding Seina, and finally started importing Grower Champagne in early 2014. That is also the year my brother Edouard joined us in Beijing, adding his passion of Champagne to the team.
We still carry a Bordeaux portfolio, which is the bulk of our activity. We also started to sell Provence wines to extend our aromatic offer on the French still wines. And of course, we have our Grower Champagnes portfolio.
At first, we mainly targeted private clubs for our Champagnes, and we still do. However we just started a retail and food service offer in Beijing. You can find our Champagnes for retail at La Cava de Laoma in Sanlitun SOHO or at Buena Onda in Huamao.
Say I’m new to Champagne. What would you recommend as my first bottle from your portfolio?
‘Secret de Bulles, Brut, Grand Cru NV’ from Champagne Lepreux-Penet. It has the bones of what most people are used to from a Champagne, yet has the flesh of a true Grower Champagne. This balance makes it a perfect wine to step into the world of Growers. Once you step up the ladder you can go for what some call the “terroirist growers”, risk takers vinifying Champagnes of unprecedented character and controversy.
Do you have any Champagne storage tips for people in Beijing given the huge gaps in temperatures and humidity during the year?
Two basic rules of wine storage are no sunlight and no “thermal shock”. The ideal temperature should be between 6 and 18 Celsius, and any change should happen slowly. For Champagne, an extra precaution is to avoid vibrations. For long term storage, the best is to have your bottle standing rather than lying. But no worries, lying is fine as well.
Remember that Champagne is sold after ageing, meaning you should drink most of your non vintages within three years after purchase. Vintages can be stored for an extended period. Also, the bigger the bottle, the longer you can hold it.
If you do not have a wine cellar, find the darkest, coolest place in your apartment and check if it is suitable. Otherwise go on Taobao, Jingdong and the like. You can find small wine cellars at less than 1,000 renminbi. It always is a good investment!
What’s your favorite Chinese food with Champagne?
Some people say Champagne goes with anything, and I might be one of those! Or is it just because I am a Champagne addict? I love breaking the codes. Too many people view Champagne as a black-tie drink, not even a wine.
When it comes to pairing Champagne with Chinese food, I have more than one favorite. Food from southern China is an easy pairing. Steamed dim sum works well for me. I would have the seafood ones with a regular Champagne or a well-developed Blanc de Blancs. I prefer the meat ones with Blanc de Noirs or Rosé.
If you move north to Beijing, fried dumplings work well with a regular or Rosé, especially if Pinot Noir is the main grape used. However, I would not recommend using vinegar with any of these pairings as this simply kills the wine. Of course, Beijing duck works amazingly well with Champagne. Again, I would recommend a wine based on Pinot Noir, typically from the Montagne de Reims area. A 100 percent Pinot Noir Rosé, a Blanc de Noirs, or why not a vintage?
Champagnes which do not work well are, unfortunately, those I prefer: those with oak notes from barrel aging. Simply does not work for me.
Two rules though. One, give space to your Champagne, it is a wine! I prefer a standard wine glass to get the most out of your Champagne. Two, serve it chilled, not frozen. Too many people serve Champagne under 6 Celsius. Try something between 8 and 10 Celsius next time, you can even dare 12 to 14 Celsius on vintages!
Always remember: different people have different palates. What works for me might not work for you! Pairing is a matter of taste more than an exact science.
You have a special event coming up this weekend. What’s happening?
Indeed, quite an amazing event actually! We are partnering with Buena Onda, a pop-up Peruvian bar serving fresh Peruvian food. Just like us, they believe there is room for improvement in the wine offered on the market, especially when it comes to providing value to consumers instead of taking it away from them.
For one night only [this Saturday], you will be able to enjoy a bottle of Grand Cru Grower Champagne at 299 rmb, and for just an extra 100 rmb it will come with a salmon tartare and a trio of dips.
Now, when is the last time you found Champagne at this price in China?
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