LONDON (Reuters) - With revelers raising a glass of bubbly to the new year, England's tiny sparkling wine industry is set for a lift in 2014 as established brands step up export plans and newcomers join the party.
Internationally, England may be known for its ale, cider and gin, but it is also home to 432 vineyards and 124 wineries, mostly along the southeast coast, which has similar geology and climate to France's Champagne region across the Channel.
English sparkling wine remains a drop in the bucket compared with its continental cousins, but producers are determined to hang on to their premium positioning, selling at an average of 25 pounds ($40.89) a bottle even as many cost-conscious Britons turn from champagne to cheaper cava from Spain and prosecco from Italy.
"We see ourselves as a luxury brand and we have to be judged on a world stage, not just an English stage," said Julian Kirk, head of sales for West Sussex winemaker Nyetimber, one of the longest-established names in English sparkling wine and owner of 10 percent of the country's vineyards.
"The British market is great, but we can't depend on it for the long-term future," Kirk added.
Those efforts have made the wine community sit up and take notice in recent years, earning British bubbly more than its fair share of awards.
Among them was East Sussex winemaker Ridgeview's triumph at the 2010 Decanter World Wine Awards, ahead of a number of more illustrious champagne producers.
English sparkling wines punched above their weight again this year, with three gold medals in the prestigious International Wine Challenge. The winners were Nyetimber, Gusbourne Estate in Kent and Dorset producer Furleigh Estate.
It should come as no surprise, therefore, that Nyetimber began exporting to Japan in May and Denmark in September.
With more than two decades of production under its belt since the 1992 debut vintage, it is likely to start selling in the United States in 2014 and is also eyeing Singapore, Hong Kong, Australia and Denmark's Nordic neighbors, Kirk said.
English sparkling wine sold 55,000 nine-liter cases in its home market in 2012, according to wine data specialist IWSR, having achieved compound annual growth of 13 percent over the past five years.
That gave it 0.6 percent of the 9.1 million cases of bubbly sold in Britain last year.
Spain, France and Italy together control 87 percent of the market, though Spain recently pulled ahead of France because of the popularity of cava as a low-cost enjoyable sparkling wine, IWSR's Helen Windle said.
IWSR predicts that sales of sparkling wine will grow faster than any other wine category in Britain over the next few years, adding 1.7 million cases between 2012 and 2018, at a compound annual growth rate of 2.8 percent.
For champagne makers such as LVMH, Pernod Ricard and Laurent Perrier, there has been increasing speculation that they might be looking to purchase vineyards in Britain, their biggest export market.
"If we have the time, will and passion, it's possible (to make great sparkling wine in England)," said Pierre-Emmanuel Taittinger, president of the champagne house that bears his family name, though he said it has no such plans at present.
Julia Trustram Eve, marketing director for the English Wine Producers trade group, said that the winemakers must retain their focus on quality.
Though part of this comes from the cool weather that gives the grapes high acidity, it is also down to the traditional production method, in which second fermentation takes place inside each bottle rather than in bulk tanks.
"It's in our interest to make sure that anyone involved in the industry and the production of this premium wine is going to keep to those levels of quality, for the sake of our own reputation," she said.
Digby Fine English, one of the newest English winemakers, is sticking to that strategy. Its first vintage, 2009, has just gone on sale at upmarket outlets such as Selfridges department store and Michelin-starred restaurants.
Trevor Clough, Digby's corporate strategist-turned-CEO, says that the industry's small size helps to support its premium price as it builds its reputation slowly but surely.
"We're not really at the point where we want everyone to know and everyone to want to buy English wine all the time," Clough said.
"It's all about focusing on early adopters and cultivating their enthusiasm." ($1 = 0.6114 British pounds)
Editing by David Goodman