Surging English Sparkling Wine Sales Gives Chapel Down New Impetus

The largest wine maker in England is banking on strong growth in the sparkling category in the coming years as the U.K. and export markets come out of the pandemic in search of something refreshing and new.

Chapel Down, which turned a 2020 loss into a tidy operating profit of just over $1 million (£843,329) last year, is among wine makers such as Nytimber, Rathfinny, Ridgeview and Tinwood that are riding a wave of interest in English wine-making, 70% of which is now taken up by sparkling production.

Kent-based Chapel Down, saw still wine sales increase by 17% in 2021, but sparkling volumes grew at more than double that pace, up 39%. This reflected rising demand for bubbles as pandemic pains eased, but also renewed focus by Chapel Down in this segment.

CEO Andrew Carter warned that in 2022 total wine volumes “will be lower” due to much weaker grape yields in 2021, down about 30% industry-wide, but he added: “We forecast continued 2022 revenue growth and higher gross profitability resulting from sparkling wine sales and the benefit of price increases. The English wine market is in growth and there is a significant opportunity.”

So much so that Chapel Down divested its loss-making beer and cider business a year ago to focus on wine. The company’s total wine and spirits revenue increased 25% to £16.6 million in 2021 selling over 1.5 million bottles of wine for the first time ever.

The brand picked up new off-trade retail customers like Britain’s current biggest supermarket chain, Tesco, and strengthened business with existing retail customers including Waitrose, Marks & Spencer, Sainsbury and wine specialist Majestic. Direct-to-consumer e-commerce also grew by 30% and now accounts for almost one quarter of all revenue.

Carter—whose drinks background includes roles as managing director at Chase Distillery, chief commercial officer of Australia’s Treasury Wine Estates, the owner of Penfolds and Wolf Blass, and managing director of Bacardi Travel Retail before that—joined Chapel Down as CEO in September 2021.

He has ambitions to be “the most celebrated English winemaker” by “premiumizing our brand”, something he knows a lot about from his stints at TWE and Bacardi. He will focus on the company’s “more profitable sparkling wines” as a core strategy to ensure that Chapel Down, listed on the Aquis Exchange, remains profitable.

Gaining greater prominence

The brand has been moving in the right circles: this year it was the official sparkling wine at the Oxford and Cambridge Boat Race—among the world’s oldest amateur sporting events, which took place in London earlier in April; and it has just signed up to be the official sparkling wine’ of the England and Wales Cricket Board (ECB) in a three-year deal.

Chapel Down is also visible in the arts through partnerships with London theater The Donmar Warehouse, the Turner Contemporary art gallery and the Royal Opera House. It is a member of the luxury brand club, Walpole Group, and is sold in luxury department stores Selfridges and Harrods, as well as leading bars, restaurants and hotels in the UK and internationally.

Many of Chapel Down’s ambitions rest on its production abilities by expanding its acreage and driving up volumes. The brand owns, lease and sources from 750 acres of vineyards in South East England with a further 150 acres of vineyards to be planted in the 2022/23 season. Though yields were poor in 2021, the company expects them to improve long term “as viticulture improves and our latest plantings on better sites start to bear fruit.”

Additionally, the existing freehold winery in Tenterden, Kent will be joined by a new one. “It will enable us to organically double the size of the Chapel Down business during the next four to five years,” said Carter.

English sparkling wine has garnered the attention of France’s Champagnes houses. Taittinger has established the Domaine Evremond brand in vineyards in Kent to produce its own English sparkling wine, while others have reportedly invested in some smaller wineries in the South East of England.

Source: https://www.forbes.com/sites/kevinrozario/2022/04/29/surging-english-sparkling-wine-sales-gives-chapel-down-new-impetus/