PARIS French champagne maker Taittinger aims to return to pre-crisis sales levels this year, helped by a slide in the euro against the U.S. dollar, restocking by distributors and growing demand in emerging markets like China.
The recovery will be driven by volumes rather than price, assuming no big surprises in the second half of the year, Chief Executive Pierre-Emmanuel Taittinger, a grandson of the company's founder, told the Reuters Global Luxury Summit in Paris on Tuesday.
"I am worried about pensions. I am worried about the debt of our countries. We will have less money. But we will always have the time to make love and drink champagne, and we will do it even more," said Taittinger, whose office sits above 1,000-year-old cellars near Reims Cathedral in France's Champagne region.
The champagne industry is emerging from a tough year that saw sales of top makers like Remy Cointreau (RCOP.PA) fall by double-digit percentage rates as the recession dampened demand for the bubbly drink, which has been around for more than 300 years.
LVMH's (LVMH.PA) champagnes were hit hardest in its spirits and wine division. Pernod (PERP.PA) has also seen sales of its Mumm and Perrier-Jouet brands fall.
Taittinger recorded a 10 percent dip in volumes last year amid lower prices, and sales fell to 90 million euros ($109 million). The CEO expects revenue to rise 10 percent to 20 percent this year, reaching as high 110 million euros.
Taittinger retail prices in France range from around 30 euros for its Brut Reserve to 120 euros for its Comtes de Champagne, which uses only the Chardonnay grape -- drunk by James Bond in Ian Fleming's novels.
The CEO said it was important for Taittinger to remain affordable and that the champagne house was not chasing profits. He said its only competitor is Viagra.
"Taittinger has never been bling bling champagne. We are champagne for connoisseurs. We are artists in champagne," said Taittinger, a self-confessed fan of the artists Francis Bacon, Chamizo, Trouille and Courmes.
"If I had money I would buy Francis Bacon," he said. "He was a big champagne drinker. Every night he was having champagne."
And Taittinger still finds enough reasons to have a glass of champagne despite the economic doom and gloom.
"Today, life is very tough for all of us. There's stress. We are under pressure, we have to fight, we have to be competitive. We have to face all the difficulties of life. Nothing is better than a glass of champagne to forget things for a few minutes, a few hours," he said.
"We are an affordable luxury. For one hour we can behave like the Queen of England."
CHINA, THE NEW U.S.
The decline of the euro against the U.S. dollar and other major currencies also works in favor of the French champagne house, which Taittinger bought back after a long struggle from U.S. private equity firm Starwood Capital in 2006.
"The fact that the euro is weaker than before, that is good for exporting champagne (and) a lot of tourists from all over the world will spend more money in Europe," Taittinger said.
Distributors around the world were also restocking after driving down inventories last year amid the financial crisis.
Taittinger exports 70 percent of its production. The UK is its top export market, while its home market of France remains its top sales driver -- for now.
In two to three years, Britain may overtake France, Taittinger said. China is the other great hope for Taittinger.
"China is doing extremely well," said the CEO, whose children work in the business.
"China is the new United States. They are going to lead the world. It's why we have to promote champagne in China -- to make them happy and peaceful. They are going to lead the world for the next 200 years."
Taittinger is seeing exports to China grow by 40 percent per year and aims to sell about 100,000 bottles there this year.
"There is no doubt that it will be a strong market in 15 years. It will be much better than the U.S.," he said.
(Rerporting by Eva Kuehnen and James Regan; editing by John Wallace)