Chapel Down profits from the growing popularity of English champagne
A smash hit: Chapel Down boss Frazer Thompson
Champagne becomes an old hat. So says the boss of Chapel Down, England’s largest producer of sparkling wines, which is quickly becoming a rival to the French fizz mastodons.
Frazer Thompson, who has run Chapel Down for two decades, may be biased, but the numbers stand up to scrutiny.
While sales of champagne fell 22% in 2020, according to the producer organization CIVC, sales of Chapel Down have risen sharply. The English producer is now planning to open a new larger cellar and increase its production.
Thompson, an outspoken Geordie, says, âChampagne has a problem. I recently saw an advertisement with Roger Federer lying in a bathtub in an immaculate suit, supposedly drinking an unopened bottle of MoÃ«t. We thought it was the most absurd imagery, and there’s that super-luxury combination.
“Does anyone really believe that Roger Federer even drinks champagne, especially fully clothed in a bath?” Consumers are reading this now.
Part of that is due to the lockdown, he thinks, especially looking at his three sons who are in their early 30s and how other young people want to present themselves on social media.
âThey completely changed during the lockdown,â says Thompson. âNow it’s a lot more about truth and honesty. I think [the pandemic] brought about profound social changes.
Rather than being drawn to an ambitious life of excess and wanting to emulate the rich and famous, Thompson believes consumers are more interested in supporting a British success story – and Chapel Down is firmly on their radar.
âI used to say we were a button on the backside of the champagne elephant,â he laughs. âNow I think we’re more of a festering boil. The company, whose winery is in Tenterden, Kent, has long attracted shareholders who are also loyal customers.
âInvestors are our best marketers,â says Thompson, 61, who often receives personal emails from the âincredibly engagedâ 4,500 shareholders.
It’s a proven strategy and in 2014 Chapel Down raised Â£ 3.8million in just 22 days as investors put their money into it.
Thompson adds, âPeople carry our cards and bore their friends to death about us at dinner parties. This is something that does not usually happen.
The company also received early backing from real estate entrepreneur and Saracens rugby club owner Nigel Wray, who bonded with Thompson “because we’re both crazy about sports,” then introduced the veteran by City Michael Spencer. Both are still significant shareholders and Thompson still receives a tremendous amount of advice from them.
Chapel Down’s shares are listed on the challenger Aquis exchange, which means the shares can be easily traded.
Thompson points out that this is convenient for anyone who needs to sell stocks and free up some cash, but many will never care, especially since anyone who owns more than 2,000 stocks, worth current Â£ 1,200, gets a third off the price of any Chapel Down Wine purchased through its website, among other perks.
Despite lockdowns for much of last year, shareholders were clearly enjoying their rebate as online sales exploded. And the brand is one of the few English wines to be sold to Waitrose, Sainsbury’s, Marks & Spencer and Tesco.
Thompson is also hoping for a rebound in hotel sales now that bars and restaurants open. Chapel Down is featured on the wine list of several upscale establishments, including Harrods, the Sheraton Grand Hotel on Park Lane in London, Ascot and the Royal Opera House.
Lucky drinkers who find them – sitting in a bar next to him might even get a free bottle – Thompson is known to look into anyone who “dithers” on the wine list and buy them a bottle of his produce.
The growing demand will mean that Chapel Down, whose production capacity is extended to Tenterden, will need a new cellar. Thompson is finalizing plans for his location, although he is likely to stay in Kent. And he’s adamant that the Tenterden site, where Chapel Down has a restaurant and visitor center, will remain his home.
Its production tool will be used to produce high-end drinks such as Kit’s Coty Blanc de Blancs, and to experiment with new products.
Bubble bath: tennis star Roger Federer in recent Moet ad
Thompson and his team also want to start buying more English grapes from vineyards producing more than they can process. He says, âThere are a lot of people – millionaires and the like – trying to get into this game right now, but they haven’t really thought about it.
âThey’re planting acres and acres of vines, but what are they going to do with all of this? When they have produced enough to make bottles for themselves and their comrades, we will be there to buy the rest of the grapes.
Chapel Down has come a long way since Thompson, then global brand manager for Heineken, joined him in 2001, after losing a bet to a friend who had challenged him to identify a glass of the sparkling wine from The cave.
âI suffered a 70% pay cut when I arrived and sent my family out of the Netherlands,â says Thompson. âThe second week, heavy men in leather jackets came to take possession of the photocopier.
The company has not emerged entirely unscathed from the pandemic – in February it was forced to sell its Curious Drinks brewing business, which weighed on performance.
He had sold 90% of his beer to pubs and bars, and in subsequent closings that income fell off a cliff. Chapel Down eventually turned Curious over to private equity firm Risk Capital Partners, after putting the company under administration.
Now fully focused on wine, he will soon publish his 2020 results – and they should be successful.
Last October, Thompson said fruit yields were “once again exceptional”, which should mean he produced many more bottles than the year before.
There are of course other English wine producers whose stars are rising. Thompson sees Nyetimber as his biggest rival. Others include Camel Valley, Bolney, and Hattingley Valley.
But with the forecast for the English sparkling wine industry to grow from 3.5 million bottles in 2020 to 8.2 million in 2026, Thompson is confident that every business will have a niche in which to grow.
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