Jack Hibberd Head of Data Marketing Livex com
Jack Hibberd Head of Data & Marketing Liv-ex. com Tuesday 28 th February 2012 “The ‘fine’ Champagne market – increasing the fizz” Harpers Champagne Summit
What is Liv-ex? Established in 1999, Liv-ex is the global exchange for fine wine merchants: • More than £ 100 m of wine was bought and sold on the platform in 2011 • Sunday Times Fast Track 100 three times in the last five years • 400+ members in 33 countries • Online marketplace • Price data, info and analysis • Storage & transport • Setter of standards
What is fine wine? A wine with: • • Secondary market trade Ability to improve in bottle Long track record Critical acclaim A recognised secondary market price and a liquid trading environment are the crucial factors.
The fine wine market • The fine wine market is worth US$4 billion annually (up from US$1 bn in 2004). Global market turnover (Billion USD) 4, 5 4 3, 5 3 2, 5 2 1, 5 1 0, 5 0 2004 2005 2006 2007 2008 2009 2010
The fine wine market • • Merchants account for 90% of trade. New markets have led to strong growth. US$3. 6 b US$245 m US$408 m US$163 m Merchants Auctions Hong Kong Other
“Fine” Champagne Although Liv-ex traded 23 different Champagne brands last year, the vast majority of trade (90%+ by value) was in three key products: • • • Dom Perignon Louis Roederer Cristal Krug Vintage Average bottle price in 2011 was £ 130. (In comparison, AC Nielsen off-trade average was £ 18 for NV and £ 23 for vintage. )
A declining share Champagne: Average monthly share of trade on Liv-ex 4 % of trade on Liv-ex source: liv-ex. com 3 2 1 0 2006 2007 2008 2009 2010 2011
“As for Champagne it’s [2. 4%] percent of our business. In the good times of three years ago it made up 10% of our business. ” Stephen Browett, Farr Vintners Harpers, 10 th February, 2012 8
дек-03 мар-04 июн-04 сен-04 дек-04 мар-05 июн-05 сен-05 дек-05 мар-06 июн-06 сен-06 дек-06 мар-07 июн-07 сен-07 дек-07 мар-08 июн-08 сен-08 дек-08 мар-09 июн-09 сен-09 дек-09 мар-10 июн-10 сен-10 дек-10 мар-11 июн-11 сен-11 дек-11 Index level Yet, prices remain firm The Liv-ex 25 Champagne Index 300 280 260 240 220 200 180 160 140 120 100 80
дек-03 80 Dom Perignon Krug Louis Roederer Cristal дек-11 сен-11 июн-11 The Liv-ex 25 Champagne Index by brand мар-11 дек-10 сен-10 июн-10 мар-10 дек-09 сен-09 июн-09 мар-09 дек-08 сен-08 июн-08 мар-08 дек-07 сен-07 июн-07 мар-07 дек-06 сен-06 июн-06 мар-06 дек-05 сен-05 июн-05 мар-05 дек-04 сен-04 июн-04 320 мар-04 Index level Krug outperforms source: liv-ex. com 300 280 260 240 220 200 180 160 140 120 100
Champagne v Bordeaux Liv-ex Champagne 25 v. The First Growths ( 2004 -2012) Index level (31 Dec 2003 = 100) 500 450 400 350 300 250 200 150 100 50 дек-03 дек-04 дек-05 дек-06 Liv-ex Champagne 25 source: liv-ex. com дек-07 дек-08 дек-09 Liv-ex Fine Wine 50 дек-11
An opportunity? If not Bordeaux. . . • Collectors looking for something new? • A defensive stock for investors? • Asian opportunity? Historically strong in the on-trade and retail, Champagne now has an opportunity to build sales amongst highly-involved private clients and wine investors.
0 янв-12 дек-11 Burgundy: Share of trade on Liv-ex ноя-11 окт-11 сен-11 авг-11 июл-11 июн-11 май-11 апр-11 мар-11 фев-11 янв-11 % share of trade Burgundy leads the way source: liv-ex. com 9 8 7 6 5 4 3 2 1
Beychevelle Leoville Barton Cristal Dom Perignon Pin Leflaive Sassicaia DRC Ornellaia Salon Mesnil Haut Brion Krug Yquem Lafite Rothschild Guigal E Avg RP score (last five vintages) Champagne to follow? Average score of leading fine wines across last five releases source: liv-ex. com 100 98 96 94 92 90 88 86 84 82 80
Exploiting the opportunity • Laissez-faire works Release some control and get the market behind you. Exclusivity doesn’t mean scarcity. • Build a profile on the secondary market Liv-ex, merchants and auctions can help build a fine wine brand. • Act like a fine wine, not a luxury brand Leave something on the table for the consumer.
www. liv-ex. com
- Slides: 16