Federation Francaise

As president of Société Jacques Bollinger, Arnould d’Hautefeuille is the power behind the throne at some of France’s most illustrious wine and Cognac houses. Charlotte Hey met him for a tête à tête

Not a lot of people in the trade know how important Arnould d’Hautefeuille is. Even fewer would recognise the name of the company of which he is president, although the last word might give the game away. Société Jacques Bollinger (SJB) might not be a company name bandied about readily in some trade circles but its spread and influence in the wine producing regions of France, plus other smaller, more recent interests in Australia, make it significant.

SJB, run by d’Hautefeuille, is a holding company formed by members of d’Hautefeuille’s family back in 1986 for its subsidiary companies and acquisitions of the core brand Champagne Bollinger. Langlois Château in the Loire was acquired in 1973, a stake in Delamain Cognac in 1994, followed by Chanson Père & Fils in Burgundy, which joined the stable in 1999. Champagne Ayala is the most recent and significant acquisition and in addition SJB owns two distribution companies, BDL France and Mentzendorff in the UK.

“We took a strategic view to form a holding company allowing the head of each company to concentrate on their particular area and not be distracted by the overall running of the group,” explains d’Hautefeuille. It’s up to him, it seems, to cope with the “distractions” of overseeing the interests of the group. But he insists that does not make him anyone’s boss, “No, no, no, we are a federation of companies,” he insists. How very French. But then Arnould d’Hautefeuille is… very French, very unassuming and the epitome of French charm.

Serious and quietly spoken it seems at first meeting but there’s definitely a twinkle in his eye and an incisive business mind behind that certain je ne sais quoi. Along with d’Hautefeuille, SJB currently has three other family members working in the company; Ghislain de Montgolfier who heads up Champagne Bollinger along with Etienne Bizot, recently moved from SJB, and Michele Bizot who looks after Langlois Château. But why the holding company? Why not just let all the other wineries be part of the Bollinger stable?

“We took a strategic view to form a holding company,” explains d’Hautefeuille. “That way we allow the head of each company to concentrate on their particular area of business and not be distracted by the overall running of the group. Strategically, we as a holding company are there to co-ordinate the strategies of the group. Each individual company has its own full business plan. As a company our first responsibility is not to restrain the development of any of the companies within the portfolio, especially not Champagne Bollinger, which is at the core of the business.”

Acquisitions have happened gradually as the company has grown and d’Hautefeuille  believes that this is one of the main advantages of being a family business. “We are not being driven by the short-term. As a board you have time when it comes to developing new projects like Ayala, for example. Even as a family company you are driven by your shareholders, in our case the wider family, but it is not the same approach as when you are a public quoted company.

He also believes there is the added benefit of image, if the family handles it correctly. “We take how we are perceived by the outside world very seriously. The family links bring legitimacy as far as our contacts within the market, growers and trade are concerned,” he says. “You are perceived as a direct representative of the family, even if you are not directly involved in a particular operational aspect of the company. That brings authority.”

Strategic gains
Langlois Château was purchased by Bollinger due to a shortage of wine in Champagne and the company felt it necessary to offer other products to the distribution network. “We wanted to broaden our portfolio – add other sparkling wines that were complementary to Champagne,” says d’Hautefeuille. “However, over time we discovered that the category doesn’t work like that. Sparkling wine is a whole other story. It’s not a case of when sales of Champagne go down the sales of sparkling wines go up.

“After that we went to Burgundy because we felt, not only did it represent a good opportunity, but also Chanson and of course the whole of Burgundy concentrated on cultivating the same grape varieties as in Champagne – Pinot Noir and Chardonnay – and their distribution networks were similar. Cognac Delamain, similarly, shared the same distribution networks and a branded strategy akin to Bollinger.” The strategy is clear but why Ayala?

“Ayala is an opportunity to rebuild a Grande Marque over the long-term,” he says, “maximising the chance to rebuild a company that has good wine but has been a little neglected commercially. We see this as an opportunity to start a new story. The brand has a certain legitimacy, nice cellars and convenient and excellent wines. But we plan to keep the two brands very separate; as Ghislain says, Ayala is Ayala and Bollinger is Bollinger.”

Dilution danger
But are there any more acquisitions on the cards? “Maybe Taittinger,” he jests, quickly. “No, we have no plans at the moment, our focus is currently to readjust to the effects of the Ayala purchase on the rest of the business.”

D’Hautefeuille’s position affords him not only a global perspective for his own company but also that of the wine and Champagne trade as a whole. He is very clear about the issues companies of his size face right now. “There is so much consolidation and acquisition going on globally that the pressure is on, commercially speaking, especially and increasingly on distribution. Companies are constantly being acquired, distributors are no exception. That makes it more and more difficult to find distribution companies to fit to our size. Therefore for us it is important to have Mentzendorff and BDL in our portfolio – both companies give us a direct and effective route to market.”

It would be impossible to have a conversation with d’Hautefeuille without touching upon the state of the French wine category and his views on the Champagne business. And while he is modest about his ability to comment on what is happening in the Champagne region at the moment, deferring to Bollinger MD, Ghislain de Montgolfier, his views seem pretty clear.

“If the Champagne vineyards are to be extended one day , the process has to be done very carefully,” he states. “It is important that any consultation on the proposed expansion retains a technological and purely geological approach – the parameters must be very strict, full of objectivity and not distorted by the fact that potential re-classifiable land is owned by so and so or such and such a company.

“I have to admit that I am not very much in favour of the proposed extension mainly because I think it could be detrimental to the image of Champagne – there is a big risk of its permanent dilution.” With Champagne Bollinger turning over about 60% of the company’s total proceeds, the situation in Champagne has an effect on the business.

One of d’Hautefeuille’s main preoccupations is the domestic market and the effect this has on the region and the generic brand as a whole. “The French market represents about 60% of  Champagne’s total market and of that a significant part is BOB or ‘non-existent’ brands. These are sold at a lower average market price than in other markets.”

He continues, “For me the challenge has to be to try and increase the average price in our home market or by transferring a share from this market to other export markets in terms of quantity. That can only be good for Champagne in the long-term.”

When it comes to the French wine industry d’Hautefeuille’s views of the challenges facing the industry take a different tack. In his view, Champagne is unique in the way the AOC has developed with a branded focus rather than by geographical areas like Bordeaux, the Loire and Burgundy. Commercially he believes that this gives the champenois an advantage. “The top appellations have already proved that they can survive but all those producers that fall into the middle ground will find business difficult,” he comments. “I think that French wine production has been protected by the AOC regime for too long. The power is still in the hands of too many small producers which makes it very difficult to get any kind of consensus when it comes to approaching the market.”

Parochial power

D’Hautefeuille is adamant that power rests in the hands of too many small producers which makes it hard to reach any kind of agreement. “The rules have to be adapted. Nobody wants, can or is even empowered to change things for the better. There are too many people, too many different lobbies involved  – it’s very Gaullois,” he laughs.

“You know what Julius Ceaser said about how he beat the French and won the Guerre des Gaulles (Conquest of Gaul)? He said that it was impossible for various Gaulois tribes to get on together so he played on that and that was how he won. We are very parochial,” he grins. But then when it comes to parochialism in wine production the French are not alone.

French d’Hautefeuille may be, but parochial he certainly isn’t, nor is the SJB Group which now employs around 230 people and has a consolidated turnover of g80 million.
And while neither he nor his company may be the talk of the town they have been quietly consolidating their own premium niche with a portfolio of products that have the brand equity and the market share to ensure continued success.  db January 2006

Arnould d’Hautefeuille CV

D’Hautefeuille started his professional career in the banking industry with Credit Lyonnais and after a few years he was asked by the family to join Champagne Bollinger. Starting in the export department and then finance department, he soon progressed to the position of directeur général at Champagne Bollinger.

He then left the company in 1990 to go back into banking, joining Credit Lyonnais after 12 years where he worked issuing stocks for small caps for two years and then four years with internal auditing. He then returned to run SJB in 1997, where he has been  CEO since 1999.

Headed by d’Hautefeuille and Etienne Bizot (who moved back to Champagne Bollinger in 2005) the SJB Group employs 230 people and has more g80 million consolidated turnover.