Champagne Supernova

It’s been a very busy year for David Meyers at Moët Hennessy UK.  Both the business and workforce have grown by 50% as the distribution of company-owned brands has been brought in-house. Here he tells Patrick Schmitt about his goals of value creation and seeking out star brands of the future

DAVID MEYERS, Moët Hennessy’s managing director since January this year, fits no obvious stereotype.  He doesn’t have the physical presence of a powerful City boss, a form most usually honed on the rugby field and fuelled by rare roast beef in quantities found only in Piccadilly clubs.

He doesn’t have the prerequisite luxury booze-business pallor, reddened by years of excessive consumption – not the weather in the Cotswolds – and with moleskins to match.  And he doesn’t have the slick all-American look, that sheen, which must have the same intensity on the shoes, as the combed back hair, and pocket-handkerchief.

No, Meyers is remarkably unassuming for the UK face of the largest luxury drinks brand owner in the world.  His collar isn’t starched, his London office isn’t decked out like a Ralph Lauren retailer, and his manner is mild.

Furthermore, his smile is genuine, his beliefs are delivered softly, if persuasively, and he appears relaxed, while obviously being highly driven.  So where does he come from? Not France that’s for sure. In fact, he’s Canadian, in his 40s, and has experience in pharmaceuticals and food as well as wine, spirits and beer.

He’s worked in four different countries he tells me, but most notably, in the Caribbean for Rémy Cointreau, where he ran the Barbados-based Mount Gay distillers for five years.  This was not only his "first opportunity to go into general management", but also an experience which taught him "a great deal".

Learning on the job In fact, Meyers’ time at Mount Gay is key to his current approach to managing any company, or more accurately, employees.  "I think that too often people are too quick in business to decide that they need to change people in their team," he explains, before describing his predicament at the Caribbean distillery.

"We had a business which had poor results and poor morale to go with that, and it was a small community and there wasn’t the depth of talent to draw on.  "If it had been in North America or Europe a new general manager would have been tempted to clean house, and I didn’t have that luxury.

It taught me the more important lesson that when you put people in the right environment and motivate them properly and you communicate with them properly and you set goals in a very clear manner, then good people rise to the challenge and human nature is remarkably similar even though it’s such a diverse world we live in.

"I work very much on a team management approach, a way where we work together to set common goals, and I want people to feel very much empowered and responsible about how we are going to achieve those goals, and what are the milestones, and how they are going to motivate their team in turn to achieve them.

So it’s really pushing responsibility and decision making to the lowest levels in the organisation, and it’s the way I’ve carried forward all through my career."  Meeting Moët But Meyers’ time at Rémy was also vital to his current post at Moët.

After his position at Mount Gay he headed for the US where he ran a distribution company for Rémy "and that’s where I came in contact as a competitor with Moët Hennessy," he explains. He describes developing a "healthy respect" for the company and having "fun building the category," and even more "fun trying to steal share from each other."

Nevertheless, the call to return to his birthplace, Canada, became too strong. "We had been out of the country essentially for the past 10 or 12 years and with three growing children and family commitments in Canada we decided to move back.

On his return Meyers "had a one year stint in the beer business with Sleeman [Breweries], and in that time I realised two things, frankly.  One is that the beer business wasn’t for me – my love and passion is for the wine and spirit business particularly at the premium/luxury end; and, two, we loved living in different parts of the world and enjoyed that lifestyle and wanted to get back into it.

So my deliberate strategy was to target not only the biggest and best in the wine and spirit business but also to deliberately target to come back to the UK – we lived here in the late 80s and we wanted to return here.  And I’m a lucky person, both happened."

Managing change

It hasn’t been an easy start, however, for Meyers.  "This year has been a year of dramatic change for Moët Hennessy in the UK; a year which has been extremely challenging for the team, and I’m happy to say that my team has risen to this challenge and succeeded.

We have increased the business by 50%.  In May this year we brought in our companyowned brands which were distributed by a third party in the UK – mainly the brands I’m talking about are Veuve Clicquot, Krug, and our still wine business – and that was quite a dramatic change for Moët Hennessy in the UK."

So what prompted it? "It’s very consistent with the strategy of consolidation which has taken place all around the world," begins Meyers, "and the management here felt it was time to do that project here in the UK.

What it has meant is that we have increased our workforce by 50% as well [as our business].  We are a small company still – we are less than a 100 employees – but almost half of those are new this year.

So it has been an enormous project in terms of hiring the right people, training them on our brands and the way we do business – and I’m pleased to say we have recruited people who are passionate for creativity, very much team-oriented and very much get it in terms of what luxury branding in the wine and spirit business is all about."

And it’s interesting to note that Meyers personally interviewed all the new recruits, "to make sure I was endorsing my team’s recommendations," he says. 

Powerful portfolio

Basically, MHUK was faced with the task of taking on six new brands and ensuring they were fully incorporated into the Moët Hennessy mould in 10 weeks.  "It was a very rapid project and we needed to make sure that we did it in a high quality way."

In particular, the change involved bringing Veuve Clicquot into the same stable as Moët, and some have questioned whether these two massive and powerful Champagne names (number two and one in terms of value in the UK respectively) would help or hinder each other when distributed by the same company.

Meyers is, however, confident in the strategy although acutely aware of the dangers.  "You’ve got two of the biggest brands in the UK and that brings some real challenges and opportunities," he says initially.

"The challenge is to make sure the brands don’t start to look like each other and, certainly, they are very different personalities and they have very different roles to play within the Champagne business."  In particular, "Veuve is definitely premium to Moët," comments Meyers.

But could Veuve outgrow Moët, knock it off its perch? "I think it will be very interesting to see because we’ve got an excellent team and excellent programmes and quite a high reinvestment rate on both Moët and Veuve Clicquot so, at the end of the day, it’s up to the consumer to decide, and if Veuve Clicquot, years and years from now, surpasses Moët, I don’t know.

There are certainly supply issues to consider but, that put aside, it’s up to the consumer to decide."  Vital, however, for Moët- Hennessy is to avoid Veuve stealing sales from Moët, or vice versa for that matter.

They must both grow, taking share from others outside the company’s portfolio, or increasing the market as a whole. 

And as Meyers says, "What we do have in our control is making sure that within the portfolio there is minimum cannibalisation, and we do that by ensuring that through our marketing and sales programmes we make sure that the positioning is as far apart as possible, always focused on consumer needs, always focused on the role that these brands play with the consumer and making sure that we are as distinctive as possible between those in our target market in our choice of the type of programmes we get involved in.

For instance, Moët and Chandon is the Champagne of the fashion industry – it is a territory we would not have Veuve Clicquot involved in at all; Veuve Clicquot sponsors the "Season" events.

"Each of these brands lives separately in the consumers’ minds," he continues.  "They don’t know that Moët Hennessy owns both Moët and Veuve Clicquot and, frankly, I don’t want them to know.  We work on the personification of each of these brands individually." 

The Moët approach

But something that really drives Moët Hennessy’s approach to all its brands is this idea of "value creation". 

This, Meyers says, is not just "value in terms of equity or financial value for us as a brand owner but value building for everyone throughout the distribution channel – those involved in the distribution and sales of Moët, for instance.

"And that’s why I’ve talked about in the past, and I shall continue to talk about a key challenge facing the Champagne industry in general and specifically the bigger brands like Moët. 

As supply and demand meet each other – which is happening now – we owe it to ourselves, our businesses, and our consumers to continue to build brand equity and also make sure we are pricing for value creation.

And that means increased prices and reduced promotions over the medium term."  And what really makes a brand suitable for Moët Hennessy’s impressive portfolio? "We look for star brands," says Meyers. 

These he defines as brands that "are timeless, modern, fast growing and profitable".  "There are very few star brands in the world and we believe that if it’s not a star brand like a Dom Pérignon or Veuve Clicquot then we want it to be a rising star – and that is a brand that we can see real potential within a planning horizon of three to five years of becoming a star brand."

Other star brands Meyers mentions are Cloudy Bay, which is celebrating its 20th anniversary, Belvedere vodka, which has already achieved superpremium status, despite being only two years under Moët Hennessy’s care in the UK, and Krug, which has just been redesigned, and is being treated to a new advertising campaign.

"We are going to be stepping up the pace and effort for Krug and it’s going to be a brand more and more people throughout the trade will be hearing a lot about," stresses Meyers. "Krug is, frankly, a brand we can take up in terms of value creation in quite an aggressive way."

And much of MHUK’s success seems to be in adopting and reinvigorating respected brands.  As Meyers says, "The creativity and innovation comes from within the brands and how you really bring them to life."

As for the future, it’s a case of consolidation as well as looking for new "star" or "rising star" brands, like the company’s Argentinian wine Terrazas." Organic growth is what really drives us with our brands, but organic growth in terms of value creation," comments Meyers before adding, "Acquisition is also important, but that is very much hit and miss.

If you look at the acquisitions over the last couple of years this group has made a lot of  acquisitions but all within the luxury premium end.  There are not a lot of luxury brands within the wine and spirit industry that are either available or even existing."

Then, after a brief discussion about brands outside the company’s portfolio, Meyers pauses, and then comments, "The other thing that I want to leave with you is a thought," before actually launching into a stirring monologue.

"We are so fortunate to have such a wonderful portfolio of luxury brands in the wine and spirit business and I want to make sure that our team leaves the brands in better shape than they are today in years to come, I want to increase pull from a consumer point of view and reduce push wherever it is feasible.

"I want people to have the opportunity to develop their careers and learn.  I want us to beat our budget and I want us to have fun doing it, and those for me encapsulate what we look for, what we tell new people who come into our business and what we like to remind ourselves as well."