In these first days of 2010 I would like to review something that drew my attention.

During the end-of-year period I saw in many supermarkets a huge offering of (very) cheap champagnes.

I’m not talking about obscure brands here, but brands like Bolinger (19,95€)

One could complain that luxury products get a lot of competition from imitating brands, but in this case I think this is not true.

Exclusivity, which was always associated with champagne, has disappeared. And it are the producers who have helped doing so.

The consequences are a bit curious: cava, which was first considered to be an imitator of champagne (especially by the champagne producers) and which was pushed into the market at low prices, is now preferred by the consumer above champagne!

As a result the pricing of comparable cava brands was higher han those of champagne brands.

Why can cava producers claim a better pricing?

Because they listen to their consumers.

Consumer: “give me a qualitative product (read: one that doesn’t give me a head ache), one that is reliable (read: introduce a quality label) and at a reasonable price (read: I’m ready to pay more if you show me why you are better).”

Three simple questions that were neglected by the champagne industry.

An example: in 2007 the champagne industry introduced a serious price increase due to a bad harvest.

The quality of that same harvest was bad. Very bad. Nevertheless, pricing went up, where quality went down.

The result: an unreliable, expensive and bad product.

Cava producers, on the other hand, did a good quality job and kept their prices reasonable (even with lower production volumes).

Their credibility went up, whereas champagne producers are paying the bill right now.

Let me wish you a bubbling 2010!

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