This New Year’s Eve, the Champagne Market Is Looking for Hope

Pour one out for your local Champagne seller.

It’s been a shaky year for the French sparkling wine. The export market started at a low; it slipped 9.2% year-over-year in 2024. Then came the tariffs.

The industry also faces existential threats. Alcohol consumption is down across the US, specifically among young Americans, and while consumer spending remains high, middle-class Americans are starting to feel the pinch in their wallets. Will they still splurge on a nice bottle of Champagne?

The Champagne sellers that Business Insider spoke to were feeling wounded but hopeful.

The volume of Champagne consumed in the US between the first and third quarters of 2025 was up 3% compared to last year, according to beverage analytics firm IWSR. Between 2020 and 2025, the compounded annual growth rate of US consumption is flat at 0%.

“It’s in a good place,” said Koryn Ternes, a consulting manager at IWSR. “It seems like the category is stabilizing.”

Strong tariffs, weak dollar

President Donald Trump’s threat of a 200% tariff on European wine in March never materialized, to the relief of Champagne merchants. However, the industry is still facing a 15% tariff.

Excess inventory from pre-tariff periods may be softening the blow. Part of the industry’s struggle in 2023 and 2024, Ternes said, was that it stocked up during the 2022 post-pandemic boom. That led to a period of “overhang,” she said.

Bill Marci, the owner of the San Francisco Champagne Society, is only feeling the tariff shock now. While the prices of goods with shorter shelf lives, such as cheese and crackers, increased almost immediately, Marci had enough Champagne stored to last him at least six to nine months.

The end of the year brings lots of meetings between importers and distributors, Marci said. One importer he spoke to said the upcharge was closer to 30%: 15% of that is the tariff cost, and the other 15% was the combination of price increases from producers and a weak dollar.

Factors like tariffs, rate cuts, growing government debt, and a decline in investor confidence have weakened the US dollar. For Champagne importers making purchases in Euros, this puts salt in the tariff wound.

Vineyard Road importer Michael Reiss contends that the value lost on the dollar is more like 8%, which he described as “not nothing” but small compared to the tariff effect. While a merchant may be able to ask a supplier for a 30-day payment delay, he said, the tariffs cannot be pushed or avoided.

“The tariff amount, you owe that before you owe anything,” Reiss said. “That money goes out the door quite quickly.”

The uncertainty may cause even more damage, he said. This time of year, suppliers ask Reiss what his expectations are for 2026, but he doesn’t know how to respond.

The tariffs have also led to some price creep. The question is: will consumers care? Marci’s San Francisco-based business hasn’t seen a difference.

“There’s so much money in Silicon Valley, they don’t even flinch,” he said.

Can Champagne buck America’s sober push?

It’s no secret that Americans are drinking less.

A 2025 Gallup poll found that 53% of Americans have occasion to drink alcohol, a record low. Americans ages 18-34, normally a core client base for the alcohol business, have seen drinking rates fall by nine percentage points between 2023 and 2025, per Gallup.

Marci has noticed a lack of Gen Z customers. He blames part of that on the slowdown of media buzz following his business’s 2014 opening. Young people may also lack the experience to appreciate good Champagne. The only ones who do are European, he said.

For now, Marci’s clientele sits comfortably between “mid-30s and old enough to no longer pick up a glass.” (And no, they haven’t been asking for non-alcoholic Champagne.)

Reiss wasn’t too worried about the decline.

“When people drink less, they do tend to drink better,” Reiss said. The markets getting beaten up, he said, were for lower-priced generic wines.

Then there’s the state of the economy. While consumer spending continues to drive economic growth, chains from McDonald’s to Home Depot have warned that middle-income consumers are cutting back.

Again, Reiss wasn’t worried.

“A $75-80 bottle retail would be a stretch for a significant part of the population,” Reiss said. “The group for which it’s not a stretch is doing well and spending money.”

Meanwhile, another country is surging in its Champagne consumption: the UK.

James Simpson, the managing director of Pol Roger Limited and chairman of the Champagne Agents Association, said the country’s consumption was bouncing back after an inflationary period.

“In the UK, we’ve still got the habit of drinking,” he said.

Something to celebrate

You’re not alone popping Champagne to ring in the New Year.

The industry thrives in the fourth quarter, IWSR’s Ternes said, with holiday gifting and the end of the year fueling consumption.

Then comes the drop-off. Q1 can be a struggle for the industry, as it competes against a bitter winter and New Year’s resolutions.

“Dry January is a thing,” Reiss said. “We don’t do well in January.”

Indeed, Champagne remains a drink of festivities. Last year, the Champagne producers’ association, Comité Champagne, justified the export slump by saying that people didn’t want to celebrate.

Reiss was frustrated with the Comité Champagne’s statement. He said they portray consumers drinking Champagne “because that’s what beautiful people living wonderful lives do.”

“It’s not the world we live in,” he said. “We’re selling wine that happens to have bubbles.”

But celebration could be why the industry remains so optimistic, despite tariffs, a weak dollar, declining alcohol consumption, and economic uncertainty.

The industry relies on good vibes — and everyone wants to maintain them.

“Gloom and doom” won’t serve the industry, Simpson said. “We’re all trying to be positive.”