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Is the extraordinary prosperity of Champagne built to last?

At a time of crisis for French AOCs Champagne continues to prosper. The French market may be flagging but export sales are on the rise. What is the basis of this success and how can it be sustained in the future? Three Champagne House directors who also also own holdings in other wine-growing regions of France offer us their analysis.

Nadège Druzkowski
La Champagne Viticole n° 711, March 2006

As an enduring symbol of conviviality, celebration, success or just friendship, Champagne wines punctuate every important moment in life. They christen the bows of ships as they are launched, send a shower of bubbles over the happy winners of sporting events and bring a sparkle to special encounters ... Forever associated with culture and celebration, the image of Champagne began with the beau monde of the 18th Century and has been lovingly reinforced and maintained ever since. Champagne winemakers have a long association with the world of luxury, linked since the the early days with all the pomp and circumstance of celebrations and major cultural events. The Champagne Houses took it as their mission to maintain Champagne’s celebrity and spread it worldwide. The Houses played a decisive role in making Champagne not just an ordinary wine but a symbol of dreams — as House president Joseph Henriot explains.

The success of collective effort

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Joseph Henriot

The Houses and their Grandes Marques were the "flagships" of Champagne overseas — the standard-bearers that forged the reputation of this delicately effervescent wine that is embraced today by consumers the world over. But the spirit that was broadcast by these engines of the Appellation would not have gained traction without help from a second engine — the terrific drive for quality on the part of the Winegrowers who have maintained the superiority of Champagne grapes across many generations. One engine does not work without the other, says Joseph Henriot. Everyone has to understand that there’s a common interest to protect here. Champagne wines are the product of a collective culture to which each makes their own contribution.

This collective determination to defend shared interests has come to represent the region’s biggest strength. It is a dynamic force that is not found to the same degree in all wine-growing regions of France.

In Burgundy for instance, there is less evidence of concerted action across the wine industry. Producers there are more divided among themselves. The result is enclaves of prosperity — personal rather than collective success. So says J. Henriot, who also heads the House of Bouchard Père & Fils.

The choice of men and history
This difference is partly the industry’s own choosing, but there are also historical reasons. Until the 18th Century, the terroirs of Burgundy belonged to large landowners or the French clergy, who worked to spread the reputation of Burgundy wines around the world. The French Revolution then saw the expropriation of Church property and the redistribution of land ownership from large private owners to smallholders. The Napoleonic Code then abolished primogeniture, leading to the division of family land into equal parts for each child. So began an inexorable process of fragmentation — made even more extreme by the diversity of Burgundy’s terroirs — that fostered a multiplicity of appellations, domains and Houses, to the detriment of the collective image of Burgundy wines, concludes Joseph Henriot.

Champagne Houses and Growers stand together
There may be a great many differences between the Champagne region and other French wine-growing regions but one thing is certain: a single, vigorous appellation coupled with a firmly united industry are two solid pillars on which to base the long-term success of our wine.
Working collectively as an industry has enabled us to protect production and yields and regulate the quality of the wines. This is the view held by Alain Thiénot, president of the Groupe Thiénot and also proprietor of several chateaus in Bordeaux. In Bordeaux, the poor and inadequate management of new plantings in recent years has led to a slump that continues today. The need to balance sales returns with quality has not always been taken into account. To this add an industry that has difficulty speaking in unison, on account of 50 different Appellations and as many trade unions, each with its own vested interests that can create conflicts of interest within the overall Bordeaux appellation. The situation is different in Champagne where a single appellation has the backing of an entire industry, notes A. Thiénot.

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Alain Thiénot

Alain Thiénot, owner of several chateaus in Bordeaux, including "Château de Ricaud".
The reason for this difference is the intimate link between Grandes Marques, Grand Cru and chateau-bottled Bordeaux. The Marques wines are in fact much-celebrated Grand Cru wines that owe their success to a specific vineyard. There may some common ground between top of the range Bordeaux wines and Champagne wines in terms of quality and product positioning, but the opportunity to promote the wines is different. In Bordeaux you work with a terroir to produce a wine that expresses its vineyard. But in Champagne, notes A. Thiénot, it’s above all a style of wine that a House represents, a blended cuvée more than a terroir. And it’s a style of wine that the House can perpetuate, in terms of quality and taste, year after year thanks to a subtle method of blending that allows the addition of reserve wines.

A flawless distribution system
The Champagne region has succeeded in building a strong appellation, on the basis of consistent quality but also supported by a flawless distribution system. Ever since the 19th Century, the Champagne Houses have been led by internationally-minded directors who were quick to construct a global trade network. Having established a strong presence in Paris, then at the pinnacle of European culture, the Champagne Houses spread their wings wider — to London, Saint Petersburg, New Orleans — creating an exclusive, global Champagne distribution network that now mostly operates through well established local retailers. The effect was to increase Champagne’s visibility in the market, setting it apart from its competitors in terms of quality and distribution. Servicing international markets was the cornerstone of the Champagne Houses’ communication campaign, which focused on Champagne as a luxury wine whose prestige extended to all all the players involved.

A worldwide renown that sets it apart
Three major advantages distinguish the Champagne region from other wine-growing regions in France. One advantage is the single Champagne appellation with its powerful image linked to celebration. Another is the industry itself, driven by the collective experience of Champagne Houses and Growers. Then there is also the force behind its Grandes Marques, says Ghislain de Montgolfier, president of the House of Bollinger, whose family also has holdings in Burgundy (Chanson Père & Fils) and the Loire (Langlois Château). A strong generic appellation powered by famous brands has given Champagne a dynamism that simply does not exist in regions where the brands tend to be obscured by technicalities. The image of Burgundy and Loire wines, for instance, is fragmented across a family of appellations that are not necessarily understood by the consumer

In addition to historical reasons and the choices made by the industry, there is also a technical reason for the solid uniting of Champagne wines around a single appellation. Using grape varieties it shared with the Burgundy region, Champagne began by making still wines. Through trial and error, certain producers then began to specialise in the complex process of second fermentation, to create a sparkling wine — a crucial stage in the making of a Champagne wine but not an easy one for smaller operators to master.
By the end of the 18th Century, second fermentation had attracted entrepreneurs and specialists with a more technical turn of mind. It was they who established the spirit of collective enterprise that drives the Champagne appellation. By dint of technical work and marketing, comments the President of the AVC (Association Viticile Champenoise) the Champagne Houses eventually hit upon the idea of creating a blended wine to ensure consistent quality from year to year.

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Ghislain de Montgolfier

Once armed with reliable quality and a name, the Champagne Houses were ready to develop a strategy based on brands. Each House had its marketeers briefed to mobilise the brand in different markets, representing the brand overseas. The brand is a real anchor point, says Ghislain de Montgolfier - a real competitive advantage when the consumer is so often confused by the increasing number of wine producers and their exponentially multiplying brand names.
Everyone in the Champagne production chain benefits from this strategy.
The prestige of the Grandes Marques, and the marketing investment they represent, has a lever effect that benefits the whole Champagne industry. In Champagne concerted policy action has produced a solidarity between the players that everyone today must defend. The continuing prosperity of Champagne requires that the industry continue to work together, confronting technical problems head-on and sharing knowledge. It is in this way, says Ghislain de Montgolfier, that Champagne will become even better.