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LUXURY: CHAMPAGNE – With compliments

20 December 2007 By db staff writer

Giving target consumers free Champagne is a key part of most brands’ marketing mix and is often done at top-end hotels and in premium airline travel. Clinton Cawood considers who benefits and how

Within the luxury sector, reaching the right target audience is of critical importance, and this has inspired no end of ingenious solutions. The extravagant freebies given to celebrities at events, for example, is a testament to the perceived power of brand endorsement. According to some sources, award show goodie bags usually contain over £10,000 worth of travel, jewellery, and other luxuries. Famously, Grey Goose’s creator, Sidney Frank, would plant bottles of the vodka in limousines being used for the Academy Awards – the guerrilla version of these giveaway marketing techniques.

For Champagne, there are some sectors that provide precisely the right audience and occasion for this. Despite the limited supply faced by the Champenois, and the high costs involved, the use of complimentary bottles in outlets such as top-end hotels and first class travel makes the desirability of reaching this audience quite clear.

Other aspects of luxury

Getting brands in front of the right consumers – opinion formers, early adopters, VIPs – is one part of the marketing mix, and undoubtedly an effective one, but there are many other aspects of packaging and marketing activity that can help create and maintain a luxury positioning.

Hatch Mansfield’s Lynn Murray believes that a luxury image is the product of a number of factors. “Packaging must deliver with quality cues, both visual and tactile. Pricing implies ‘luxury’ too, and it is important not to heavily price promote at this level.” Murray adds that there is value in being “associated with luxury establishments, events or the right celebrities or other luxury brands”.

For Maisons Marques et Domaine, “packaging and pricing, rarity and age all add to the ‘luxury image’,” says brand manager James Samson. He adds, however, that it is the “luxury experience” that counts – a factor that includes the taste of the product as well. Veuve Cliquot’s brand director, Sally Warmington, believes that communication strategy is of particular importance – what she refers to as “the tone with which we speak to our consumers, and recognising that luxury consumers are looking for something different from a brand, something engaging and real, based on heritage, expertise and understanding, along with a unique personality that makes them feel special and exclusive.”

Providing a complimentary bottle of Champagne to the right kind of guest in a hotel delivers ideal exposure for a brand. And while a hotel’s house Champagne is frequently used in this situation, this can vary. As Niko Mustafa, restaurant manager at London’s Gore Hotel, confirms: “We do quite a lot of complimentary Champagne. Sometimes it’ll be our house brand: Beaumont des Crayères Brut or Rosé, or Moët Rosé… it depends on who they are. The hotel pays for it – we don’t have a deal [with suppliers] for the ones we give away.”

The right people and places
This kind of activity is clearly something that has benefits for the hotel, the Champagne brands, and the guests, of course. For producers, however, the benefit can be two-fold. As Gosset’s Patrick Ligeron explains: “I wouldn’t say that it’s more marketing than commercial – it’s a bit of both. On the one side, people that use Gosset in their mini-bars, that’s commercial. The customer pays for these. But it’s also a good image for us, showing Gosset placed in those top quality places. It’s a real partnership between a Champagne and a top quality hotel.”

For James Samson, brand manager at Maisons Marques et Domaines, UK agent and importer for Louis Roederer (and its prestige cuvée, Cristal), this kind of positioning is primarily of value in marketing terms. He explains that the outlets at this end of the market “underpin the premium positioning of the brand. In terms of volumes, they are by definition low, but they carry with them a high PR caché”.

For Vranken Pommery Monopole, Colin Cameron, marketing manager at Percy Fox & Co, sees more of a dual benefit to this kind of activity. “It’s both a visibility and prestige objective, as well as the volume return.” Pommery is particularly suited to activity in hotels as a result of its 20cl POP bottles, which are ideal for mini bars. In addition, Cameron explains that “with some top-end hotels we work with them to construct a deal whereby the hotel has a free bottle of Pommery already chilling in an ice bucket when the guests arrive and stay in the suites”.

Not all houses provide split bottles, however, and producers and hoteliers are indeed split on the subject of mini bar sales of Champagne. At the London Hilton (one location where the small POP bottles are available), communications manager Jules Kerby explains that Champagne is available “either via room service or the mini bar and is a popular choice for hotel guests”. Mustafa confirms that “half bottles of Moët & Chandon sell well in the mini bar” at The Gore. At the Landmark in London, however, food and beverage director Sylvie Carpentier explains that “we’d rather they order Champagne from room service. The mini bars are quite sensitive in terms of people stealing bottles – it’s our decision not to include it.”

Brand ambassadors
Similarly, merely giving away a luxury product has its disadvantages. Laurent Perrier’s marketing manager Daniel Brennan believes that “it compromises brand equity, and devalues brand integrity to give bottles away”. The marketing platform provided by top-end hotels is not missed by Laurent Perrier, however. As Brennan explains: “We will give, on occasion, a gift box with a bottle of Champagne to guests that are considered to be good brand ambassadors for Laurent Perrier. It’s brand placement in the right place, and seen by the right people – by opinion formers that can influence others.”

The practice of providing complimentary bottles of Champagne to guests is by no means universal. At the Beverly Hills Hotel in the US, head bartender Matt Martinez explains that while bottles are not put into all guest rooms, “we do send amenity bottles to VIP guests upon request”. When this is done, the department that requests the Champagne is responsible for the cost. At the Principe di Savoia in Milan (which, like the Beverly Hills Hotel, is part of the Dorchester Collection), this is only ever done as part of a promotional package, and in this case, according to PR manager Alessandra Baldeschi, a prestige cuvée is used.

Benefits for the hotels

Top-end hotels provide Champagne brands with an arguably unparalleled marketing platform, with access to an ideal target audience. In turn, this audience gets complimentary Champagne. What is the benefit for the hotels, though?

“They share the marketing with us, in terms of promotion and marketing support, as well as in terms of branding,” says Sylvie Carpentier, food and beverage manager at The Landmark in London. “They also help us a lot with training – the more staff are trained, the more we can sell. They invite staff to go to France.” According to the restaurant manager at The Gore in London, Niko Mustafa, brands do indeed provide “a lot of support in training”.

As Carpentier points out, however: “All of the brands offer the same. A house Champagne contract is one or two years, and when it’s time to renew you compare the different brands, and everyone’s giving you the same.”

When it comes to the Champagne list offered by the hotel, head bartender at the Beverly Hills Hotel, Matt Martinez, is even more cynical: “There is no benefit to any Champagne house with how we create our wine list. As far as value to the hotel, there really is none either. We build our list based on offering our guests variety in product and price.”

In short, the one clear winner in all of this is the guest of a top-end hotel. But then again, we already knew that.

The choice of actual Champagne to put in a suite varies according to various factors. “It depends on the value of the suites,” says Ligeron. “Some put prestige cuvées into bigger suites, and some hotels change the brands very often.”

As Martinez explains, although the hotel has a house cuvée, “the Champagne sent out as an amenity will vary according to the specific request of the person doing the ordering.

We can and do send prestige cuvées upon request.” For Carpentier, the choice of Champagne is dependent on the guest. “Sometimes VIPs prefer a particular brand,” she says.

Regardless of the brand or cuvée, complimentary bottles are, needless to say, almost always appreciated by guests. Mustafa confirms that customers usually do drink them, while Carpentier says: “We never see Champagne coming back. If they don’t drink it they take it with them.”

First class approach
Of course, top-end hotels are not the only platform for Champagne to reach its ideal consumer. Cameron confirms that premium travel “is another area of visibility that is important for us”. On British Airways, VPM provides one of two marques, depending on class of travel. “It helps to keep these two marques in the mind of our Champagne consumers – whether occasional or regular consumers.” Lynn Murray, marketing director at Hatch Mansfield (the agency responsible for Champagne Taittinger in the UK) confirms: “Premium travel is an important shop window for a Champagne brand. Business and first class travellers are the right target audience and they expect to be served the best in category, be it food or wine.”

Premium airline travel is a focus for Laurent Perrier as well. As Brennan explains: “This is the international audience we’re trying to reach. This is very much a microcosm of our global message. We want a worldwide experience for the brand.”

This channel presents a limitation to Champagne producers, however. Although Ligeron acknowledges that “on airlines of course we get similar, high profile customers, Gosset is not really fit for the volumes of top airlines. That’s why we do it exclusively in the top end.” Samson agrees that the premium airline travel arena is “a great area to be involved in, and we are constantly having conversations with the top carriers. Volume constraints confronting Roederer mean we do not target the premium travel sector aggressively.” Samson adds: “A luxury image needs to be allied to scarcity of supply and to excellence of quality.”

Brand strength
Whereas complimentary bottles and mini bars in hotels do not offer a particularly wide range of choice for consumers, there are other avenues within premium hotels that cater far better for the wide range of choice offered by Champagne producers. As Carpentier puts it, “we have different Champagnes – different styles and different brands – so we can sell to everybody, because Champagne is a personal taste.” Given the effective branding within Champagne, however, there is another aspect. “There is a fashion for brands as well,” says Carpentier. “Some people only buy by brands. Some will only buy Cristal or Dom Pérignon. The branding is strong, and the Champagne companies know it.”

Companies do indeed know it, and there is significant activity in hotels, outside of the suites, aimed at influencing consumer choice. As Moët & Chandon and Dom Pérignon senior PR manager, Emily Harris, gives the example of a Moët Gold afteroon tea to guests at the Mandarin Oriental. “This type of activity is key for Moët in terms of image and forming partnerships.” Similarly, The Landmark offers a Sunday Champagne brunch with unlimited Taittinger.

Samson also points out the importance of more conventional sales in top-end hotels. “We supply several of the most prestigious [hotels], on occasion supporting the listings with pouring deals if it serves all our purposes.”

According to Murray, while hotels offer an opportunity for brands to build their image, “top-end hotels will want to be seen offering a well known brand as their house pouring Champagne”.

There is no wonder that the association between these top-end platforms (hotels or airlines) and Champagne houses are so prevalent. The benefits are quite clear for all those concerned – whether that is in marketing or volume terms. While consumers of luxury products are still flying first class and staying in top hotels, they will almost certainly still be drinking Champagne, and probably for free.