CHAMPAGNE: Vive la différence

Champagne continues to rise in popularity – and in scarcity. In such a market, Fionnuala Synnott notes a rise in consumers seeking out exclusive cuvées beyond the grandes marques

As demand for Champagne grows, consumers are gradually becoming more comfortable with the category. This newfound confidence has led some to become more adventurous when ordering Champagne. Fred Brugues, head sommelier at Sketch, explains: “Increasingly, people like to be recognised for their knowledge. For instance, people may order an Elizabeth Salmon rosé to show they know there is more to Billecart-Salmon than the classic rosé.”
Jean-Noel Girard, export director at Champagne Devaux, has noticed a similar development: “There are more and more people with good knowledge who are looking to drink something unusual, something they can’t find on every street corner.”
At The Ritz, food and beverage manager David Collas is trying to encourage consumers to experiment. “As long as the quality is there people will become more adventurous.” The hotel‘s Rivoli Bar therefore offers a Champagne of the month and encourages the house to carry out extensive training with the staff, to familiarise them with all of the wines.
 
Timeless classics
But this doesn’t mean the grandes marques have been forgotten. In fact, Colin Cameron, marketing manager at Percy Fox, UK agent for Pommery, thinks that growing consumer curiosity is benefiting the grande marques, as well as vintage Champagne. “While there is no diminishing the popularity of brut NV, we are experiencing increased demand for alternative styles – particularly rosé of course. Being adventurous often results in trading up and premiumisation. Consumers are steadily understanding and accepting the step up in quality of vintage Champagne.”
In many on-trade venues the grandes marques are proving as popular as ever. Chris Seale, head of Champagnes at Pernod Ricard UK, comments: “They are a symbol of quality in an image-driven category.”

The grandes marques can co-exist with more unusual offerings as long as the market remains dynamic. Andrew Hawes, managing director of Mentzendorff, explains: “Some consumers will move on to experiment with emerging styles such as zero dosage, while new entrants will be drawn perhaps initially to the major brands, with others moving on from their entry point brands or own-labels onto more premium brands.”
However, Charles Philipponnat, president of the eponymous house, thinks consumer desire for new taste sensations is currently outstripping interest in the classic Champagnes. “Real quality is beginning to play a role in the market when before it was all about branding. In the top end of the market, big-volume grandes marques are now perceived as boring, but the leading companies are conscious of the brand cycle and are also developing high-end or quality alternatives (LVMH with Krug, or Ruinart with ‘R’).”

Style over substance
As Champagne becomes increasingly mainstream, some houses are investing more in consumer marketing. “What I have seen, from the Champagne houses, is that they are doing more and more marketing. They are trying to communicate the exclusivity of Champagne and becoming interactive,” says The Ritz’s Collas.
This has led to the accusation that they are promoting image over quality wine credentials. This is a dangerous strategy. Girard warns: “Before reaching the consumer, houses have to go through the on- and the off-trade. If you want to be active on image and forget the wine you will lose credibility within the trade.” Collas adds: “If Champagne is sold like a handbag or shoes, what will the future hold?”
Investing millions in marketing is not something the smaller houses can do. Christophe Lagrange, sales and marketing director at Jacquart, comments: “At Jacquart we have to sell the quality of the wine. Unlike some other more famous grand cuvées, we have to ensure we have marvellous wines first.” This puts more onus on the house to produce quality wine. “A small house such as Gosset has to produce a better quality product in order to compete with the grandes marques,” says Collas.

Given the current demand for premium Champagne and the fact that most grandes marques are only available on allocation, there is a gap in the market for an entrepreneurial house looking to break into this exclusive club. Brands such as Ace of Spades have relied heavily on celebrity endorsement to build their reputation. But is this enough? According to James Samson, brand manager for Louis Roederer, endorsement is part of the recognition of the excellence and desirability of a product. “Endorsement of Roederer has always come first and foremost from our peers and from experts in the trade as well as educated connoisseurs.”
But celebrity endorsement is transitory. It is therefore difficult to build anything of lasting importance via this medium alone. Andrew Hawes, at Mentzendorff, explains: “We have been building the Bollinger brand in the UK market for 150 years and there is a substantial dividend that flows from this. We have also attracted celebrity endorsement but never sought it out – an important distinction.”
But a Champagne house may find itself being endorsed by people outside its target audience, just like Burberry was in the 1990s. Colin Cameron, marketing manager at Percy Fox, comments: “It is about quality more than endorsement. Celebrity endorsement does not always mean a positive message, as was found by a certain prestige cuvée.”
According to Samson, at Louis Roederer, the real key to building reputation is to focus on quality. This is something that any house – not just the grandes marques – can do. “Former members of this banding of high quality houses may retain a certain status due to long-term consistency and high regard but there is nothing that consistently excellent production cannot do to cement the reputation of lesser known houses if they wish to aspire upwards.”

This quality message is one the grandes marques would do well to remember. Collas comments:  “The grandes marques club has to be careful about quality.” Chris Seale, head of Champagnes at Pernod Ricard UK, agrees: “It takes winemaking skill to justify the price point of a prestige cuvée. Look at Dom Pérignon, Krug, Cristal and Belle-Epoque: it takes hundreds of years to develop a brand’s value and credibility.”

Building the category
But marketing also has its own advantages. “It can bring new consumers into the category. It makes Champagne more aspirational and creates an image around the whole category,” says Lynn Murray, marketing controller, at Hatch Mansfield, UK agent for Taittinger. Jean-Noel Girard, export director at Champagne Devaux, is not against big brands either. “Some big names are becoming bigger and bigger, especially in the emerging markets. Houses like us will come after the big brands.”
Charles Philipponat foresees good opportunities for lesser-known houses: “The grandes marques club is already meaningless. Many newcomers are now gaining respect, and with proper commercial investment, they will grow. The big brands will stay because they are so dominant and wield so much financial power. But the Goliaths cannot defeat the clever Davids (although they may buy them out).”
In the image-driven Champagne category, the relationship between the label and what is in the bottle is particularly blurred. Yves Dumont, chairman of the management board at Laurent-Perrier, explains: “Luxury is paradoxical: the image inspires consumers to try it but I do not believe that is enough. Ferrari’s association with F1 is important but if Ferrari didn’t deliver the horse power then it wouldn’t sell any cars.”

Marketing campaigns can be advantageous for the whole category, creating opportunity for smaller houses and keeping consumer interest alive. It is also important the Champenois do not become complacent following growing demand for their wine. Philippe Lallier Deutz, head of trade marketing at Deutz, says: “Just because an image has been built over time doesn’t mean it will last. We must continue working as before and cannot wait for the demand to come to us.”
However, marketing for marketing’s sake is a short-term strategy. Anyone looking to build a long-term reputation has to base it on solid quality credentials. Charles Philipponat adds: “Any brand strategy needs to be based on true product attributes and quality, lest the brand weakens. This can happen no matter how much promotion is done.” As Andrew Hawes, at Mentzendorff, says, “The Champagne region is extremely well regulated and there are firm controls on stock holding versus sales and on the ageing of stock. The last few vintages have been both of a high quality and generous yield and this has also allowed the additional development of the qualitative reserve. So houses are laying down greater volumes, but with no possible compromise to quality.”
Dumont,  at Laurent-Perrier, puts it thus: “Champagne is a consumer product, a wine and a luxury – whoever misses out one of these elements is missing a trick.”

db ©  June 2008