Abstract: A Strange Story: When Crisis Leads to Wealth—The Institution of Champagne Wine as a Luxury Good

Christian Barrère

Abstract

The very profitable Champagne industry now belongs to the luxury field; indeed, Champagne wine was the first example of a new mass luxury. However, the history of Champagne is special, because initially Champagne was not a good wine but only a standard one. It was one of the numerous white sparkling wines, and under the Champagne name, both the best and the worst could be found. By means of a unique historical process of creativity, the industry succeeded in transforming Champagne wine into a luxury good and in segmenting the old market into two strongly separated compartments, one for Champagne and one for all other sparkling wines. Moreover, this evolution resulted from a major crisis in the Champagne vineyards. On April 11, 1911, the red flag was flying over the vineyards and people were singing the "Internationale"; the vineyards were occupied by 40,000 soldiers. The crisis compelled the sector to evolve or perish. A small group of actors took the lead in the evolution process, creating a strategy based on high quality. This essay tells this success story and considers its conditions.

BEH On-Line Paper