Why champagne is trailing cognac in China – Paul French

Getting in favor of China’s rich is easier for some brands than others. Retail analyst Paul French explains in Business Week why the plan to make champagne a hit, like cognac is already, might not work in the Middle Kingdom.

Business Week:

“We think China could change the champagne market in the coming years,” said Charles-Armand de Belenet, head of marketing for the champagne division of Pernod Ricard SA. (RI) China is the second-biggest export market for Pernod’s Mumm brand and No. 3 for sister label Perrier Jouet.

There’s a problem with that plan: champagne doesn’t have the staying power of cognac, its fellow French export. The fizzy drink has to be consumed immediately after opening. Cognac, by contrast, can be kept for years and offered to special guests when the occasion warrants, said Paul French, an analyst with researcher Mintel in Shanghai.

Most Chinese sales of cognac come around the just-finished Lunar New Year holiday, when Chinese often give friends and business contacts expensive bottles of cognac or baijiu — a local white spirit.

These gifts are displayed “on a shelf, like a vase,” said French. “There’s a massive over-expectation about China” among makers of bubbly, he said. “Champagne is quite a hard product to push.”

More in Business Week.

Paul French is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers’ request form.

Getting things right in China is not easy for foreign brands. Last summer Ben Cavender explained why efforts to localize on the China market did not work out for B&Q, Gap, IKEA and Donut Donkin.