Jiles's Blog

Bunches, bunches everywhere, nor not a bunch to press

 

Readers who are not familiar with the inner workings of the champagne industry may be surprised by the title of this article, which is an echo of lines from The Rime of the Ancient Mariner.

They may also be surprised to learn that in Champagne grape growers (vignerons) are often not allowed to pick all the grapes that Nature has provided on the vines – at least not to press those grapes and turn them into champagne.

In this post I’ll explain the thinking that lies behind this seemingly strange situation.

  

Very broadly speaking there are two types of champagne maker: on the one hand, there are the well-known houses (maisons) whose names you may well have heard of; there are some two or three hundred of these and they account for by far the lion’s share of all the bottles sold around the world but they own a relatively small share of the 34,000 or so hectares of vines planted in Champagne. They own so few vineyards relative to the number so bottles they sell that they are obliged to buy grapes from third parties.

Those third parties are the many thousands of grapes growers who own the lion’s share of the vineyards. These plots are often very small indeed, but nevertheless the price of grapes being as high as it is in Champagne, selling the grapes from even a small plot can provide a healthy side income and if you own a larger plot then the sale of grapes becomes your main source of income.

The maisons are great at sales and marketing but own few vineyards, whilst the vignerons own the vineyards but lack the skills and resources to sell anywhere near the number of bottles that the maisons can do.

Given this situation, you can see  that the two categories of actor in Champagne have a sort of symbiotic relationship – each one needs the other in order to survive and prosper.

So far so good and the interests of both side are aligned.

However….

Things get a little more complex and even tense when it comes to deciding on two important issues: the price each year per kilo of grapes and the weight of grapes that is harvested each year.

As regards the price of grapes, the maisons want to buy grapes at the best possible price to keep their costs of production down whilst the vignerons want to sell at the highest price they can get.

To manage this potential conflict of interest a governing body called the Comité Champagne (CIVC), was established many years ago to allow actors on both sides to express their needs with a view to reaching a happy compromise.

 

Until a couple of decades ago, the price of grapes each year would be set by Comité Champagne, but nowadays it is the market and the individual agreements between buyers and sellers that determine the price.

A similar conflict of interest can exist when it comes to the size of the harvest and here several factors are at play.

First, the weather influences the size of the harvest. In record years the vines can be laden with up to about 18,000 kg of grapes per hectare, whilst in poor years yields can be as low as 4,000 kg and if a disaster such as a severe hail storm were to strike, some vignerons can be left with no harvest at all.

Broadly speaking however, an average yield in Champagne is 10,000 kg per hectare which, as an aside, is enough to make about 8,500 bottles of champagne.

But things are not quite so straightforward as you might imagine because the state of the global champagne market now comes into consideration.

For twelve months or more sales of champagne have been in decline and as sales slowdown the stock of bottles in the masons’ cellars increases. There’s a cost associated with keeping bottles in the cellars for several years whilst they nature and the bigger the stock, the higher the cost.

 

Right now, the last thing the maisons want is to buy large quantities of grapes and turn them into bottles of champagne that they won’t be able to sell quickly.

Meanwhile, the vignerons have a different point of view. Whilst they understand that it is in no one’s interest to produce more bottles than can be readily sold, they still need to live and so they are seeking to pick and sell as many grapes as can  be absorbed by the market and in this sort of situation, the vigneron’s estimate of the correct amount of grapes to pick is usually higher than that of the maisons.

This is where the Comité Champagne comes into the picture to find a compromise and this year, with about a month to go until the harvest starts,  they have announced a limit 9,000 kg per hectare on the amount of grapes that can be picked and turned into champagne.

There’s one last turn to the story.

Any grapes on the vines in excess of 9,000 kg may be picked and pressed, but the juice must be held back in reserve and not yet bottled as champagne. This juice can be released in future as and when market conditions require it.

That then, is why vignerons in Champagne cannot always use all the grapes that Nature has provided on the vines (at least not immediately). It’s a system that has stood the champagne industry in good stead for many years and has served to look after the interests of everyone concerned – not an easy task but one which seems to work.

 

If you have any thoughts or comments on this or anything else to do with champagne, please email me at This email address is being protected from spambots. You need JavaScript enabled to view it.

Never buy one of these bottles

 

Here’s a picture taken in a supermarket near where I live.

They have a range of wine and spirits on sale and some of the more expensive bottles are displayed on shelves behind the check-out counter.

The idea of course, is to encourage people standing at the check-out to buy a bottle of their favourite drink that they see prominently on display, but my advice is never to buy any of the bottles, and definitely none of the champagne, that you can see at the right-hand side of the picture.

 

So what’s the problem? There are some reputable brands there. If you look closely, you can see Lanson, Moët & Chandon and Veuve Clicquot – nothing wrong with any of those champagnes, you might say.

No, the problem is all to do with the way the bottles are displayed:

• They are right underneath the light in the recess of the shelf and
• They are right next to the window on the right of the photo and when the sun shines through the window, which it often does, the sunlight falls directly on to the bottles particularly the ones on the end of the shelf - exactly where the champagne bottles are.

This is the worst possible place to display champagne because the bottles are being hit with a double dose of light: electric light from the shelf and natural sunlight from the window

Why is this a disaster? Because of something called Goût de Lumière or Taste of Light.

This may sound bizarre, but it’s very real and you’ll notice it instantly if you ever have the misfortune to open a bottle of champagne that has been badly stored in this way.

The champagne will have a sort of metallic and rather bitter taste to it – totally undrinkable in my opinion and a  total waste of money.

The problem may not be so serious when it comes to bottles of spirits, but champagne is a delicate wine and very susceptible to damage, in just a matter of days, if the storage conditions are poor. Good storage means a dark place at a reasonably stable temperature (no highs and lows) and no strong odours.

The problem is exacerbated with champagne in clear bottles which, unlike green bottles, provide no protection from UV light, but that’s a topic for another blog post.

For now, please remember to avoid the Goût de Lumière.

All the best

 

WORKING WITH DISTRIBUTORS

At some point in the life of your champagne brand, probably sooner than you imagine, you will want to work with a distributor who can get your brand into new outlets, increase brand awareness and drive sales.

However, a distributor who is effective and successful will be approached by dozens of brands also presenting their product and looking for a distribution partner. The competition will be intense so your objective is to make it as easy as possible for the distributor to say Yes to you.

In part 1 below are a few guidelines about how to present your brand and in the second part of the article you’ll find a few suggestions about how to work effectively with a distributor once you have secured an agreement.

Part 1 - Pitching

 

 

 

 

 

 

Timing

In almost all countries the end of the year is the key period for sales and distributors will start planning for that crucial period many months in advance. Springtime is therefore a good time to present your brand to distributors. By summer it will be too late because they will have already made their decisions about which brands they want in their portfolio, and it will be too late to change that until the following year brings a new round of discussions.

Reasons why

You may be absolutely convinced that every aspect of your brand is outstanding and that it will be easy for a distributor to sell, but you will need to put yourself in the shoes of the distributor and understand what he or she is looking for.

Why are you contacting the distributor?

Do your research about each distributor and explain why would your brand be a good fit for them.

Does the distributor already have a champagne in the existing portfolio?

If so, why would they want another champagne?

Does your brand address a different market segment, does it fit into a different price bracket, what will make it attractive to the distributor?

If the distributor does not have a champagne in the existing portfolio, why should they take on your brand?

Is there an opportunity that has ben overlooked?

What is that opportunity and how big an opportunity is it?

Bring something to the table

It will be easier to persuade a distributor of the merits of your brand if you have already secured some listings, so start by prospecting in your local area and approaching bars, restaurants and retailers to get some initial sales.

 If you can show the distributor a list of existing accounts that will immediately bring in revenue for them, that will lend weight to your claims that there is a market for your brand.

Training

Always offer to train the distributor’s sales force about your product.

When a salesperson visits an outlet, he or she may only have a very few minutes to speak with the customer. It is vital therefore that the salesperson can speak concisely and confidently about your brand in the short time available.

You need to make sure that every salesperson knows two or three key points about your brand that will capture the customers attention. To do that the sales force needs to be trained.

Motivation

Every salesperson likes to be recognised and rewarded for their efforts.

Consider offering some incentive for the most successful salesperson of the month, or some similar programme.

Know your numbers

When all is said and done, no matter how good the product, if the distributor cannot make an attractive profit from selling it, the product will fail.

You will need to present cost prices, suggested retail prices and expected margins for the distributor.

Part 2 – Details of an agreement and ongoing collaboration

Distribution agreements are legal undertakings and once entered into, it can be difficult and very costly to withdraw from them. Therefore, great care should be taken to study the content of the agreement, and it is advisable to seek advice from a qualified legal expert before signing any agreement.

Some points worth particular attention are:

The length of the agreement

It is prudent to have an initial trial period, say 1 year, at the end of which results can be assessed and, if necessary, the agreement ended without additional cost.

It’s a good idea to discuss and agree sales targets for the trial period, which if not met, would give legitimate reason to terminate the agreement.

Avoid giving to the distributor the exclusive right to distribute your brand, unless the duration of the agreement is fixed and the means of exiting the agreement are made clear before you sign the agreement.

Your work is not finished when you have signed an agreement with a distributor. Close and regular communication between you and the distributor is needed in the months and years ahead.

 

Review sales regularly with the distributor. Better still, ask for a monthly depletion report from the distributor. This information not only helps you see how sales are growing, it will also signal any potential problems that need attention before they become serious.

 If sales drop significantly to the point where the distributor loses confidence in your brand, the distributor may be tempted to sell off any remaining stock at bargain prices which does no good at all to the image of your brand. This type of situation is to be avoided and one way to do this is to keep a constant eye on depletions.

Just as important, the monthly depletion reports allow you to monitor stock levels and plan new orders from France.

Distributors may not be willing to give you a list of all the individual outlets where they sell your brand because they may be concerned that one day you may wish to end the distribution agreement and transfer the business to another distributor.

This reluctance is understandable because in such an event, the list of customers would be of immense value to a new distributor and all the work that had been done to build up that list would be lost by the former distributor.

In summary,

- do your homework before approaching a distributor

- remember that your relationship with a distributor is a partnership and you must provide support other than the product itself

- stay in frequent contact with the distributor and stay in control of the fate of your brand

All the best

How champagne labels impact brand imagery and profitability

One of the first rules of marketing is ‘Know your customer’

If you know your customer there is a better chance that you will understand their needs and desires as regards the product or service you want to sell to them and this maxim applies just as much to the private champagne brand you have created or are thinking of creating, as to any other category pf product, so let’s explore one aspect of this question: labelling.

To do so, let’s look at a couple of examples.

Adapting to broad trends

As the years go by, society changes and consumer tastes change too. Experienced marketing professionals will be aware of this and make frequent small changes to the design and imagery of their brand, particularly the labels.

Usually, these changes are very minor and sometimes hardly perceptible although they are more obvious if you compare examples of the same brand across a long period of time. On the other hand, sometimes significant changes are needed to keep up with changing circumstances

The picture below shows a major change made by one champagne maker in order to update the perception of his brand. The champagne inside the bottle has not changed, only the label.

 

On the left is the classic champagne label: it’s square and features quite a lot of gold, a colour that is often associated with prestige and opulence. The label is relatively large, the detail is cursive with curved, flowing lines and the coat of arms is quite prominent in the centre at the bottom centre of the label.

To my way of thinking the adjectives I’d immediately associate with the left-hand label are reliable, traditional, historical, ornate, perhaps even aristocratic. All these things were very much in keeping with the image that champagne promoted a few decades ago.

These days however, this style is considered to be a little outdated, although tradition still has an important part to play and should not be entirely discarded.

The right-hand label is intended to present the brand in a way that reflects the changing expectations of a new generation of consumers (and to some extent, to nudge consumers towards that new perception of the brand).

The right-hand label is rectangular, not square, taller and narrower than the older version. The predominant colour is black with only a few touches of gold. The lines are almost all straight, the coat of arms is still there (a nod to tradition) but is has been modified and is less prominent. Last but not least, in a slightly playful gesture, the three geese which, on the old label, were almost invisible within the coat of arms, have now been brought to one’s attention by making them gold on the black background.

Adjectives which spring to mind for the new version of the label are slick, understated, classy, serious and confident. The overall look is much more modern.

Another of the objectives of this change, especially the change of label shape, was to associate champagne more closely with wine rather than being treated as an entirely different category. This opens up champagne to a much wider audience of wine drinkers rather than specifically champagne drinkers.

In case you’re wondering, the geese device represents Chouilly, the village where the champagne is produced. Geese is the nick name given to the inhabitants of Chouilly.

Not one in 10,000 people would know this, but it arouses the consumers’ curiosity and prompts them to ask questions and that gives the champagne maker or the salesperson the ideal opportunity to talk about the brand and weave a cute and intriguing story around the brand. Storytelling is a well-known and ancient way to influence people.

Let’s look at a second example which is rather different and had different objectives

Customer specific targeting

Here are two more contrasting labels on the same product from the same champagne maker. The first dates from 2016 and the second from 2024. I think you’ll agree that it’s a radical change: a revolution rather than an evolution.

As in the previous example, the older label in the first picture below is square, traditional and overwhelmingly gold. The imagery is firmly anchored in the imagery that champagne liked to advance a decade or so ago, although, in my opinion, this is a far more attractive label than the old label in the previous example.

This is my personal opinion with which you may not agree, but I don’t have the feeling that this label is very old-fashioned, and I don’t find the ‘in-your-face’ use of gold to be a problem in this instance.

Gold is still associated with wealth and opulence and several modern brands unashamedly use gold in their packaging – think of Ace of Spades champagne or many Prosecco brands – but there is a fine line to be drawn between opulence, which is positive, and ostentation which is negative. The difference between the two is mainly a matter of personal taste, or more relevantly, a matter of the taste of your target consumers.

Looking at the second example below, it seems clear that this champagne maker has made a strategic decision to set their sights on quite a different type of consumer and consequently to present their brand in a way that appeals to that new audience.

The label is still square but the black dividing line down the centre gives the impression of two rectangular labels.

Hardly any gold to be seen, just a plain white background against which it is easy to read all the information and it’s that information about the champagne in the bottle – and above all the map of the vineyards - that best illustrates the intention behind this change of label.

Only consumers who have an above average interest in champagne would be attracted by this level of information and those are the consumers that this champagne maker has decided to target.

In doing so the brand is positioned as a wine that should be taken seriously. This is not just a champagne to drink at a party when hardly anyone pays much attention to what they are drinking. Neither is it a champagne that appeals as a gift item because of the bright gold label.

This is a champagne that offers a much deeper, more involving and more rewarding experience. and the information is provided to fully explain that the champagne maker’s priority is on the quality of the wine rather than just its appearance.

Of course, there is no doubt some more hard-nosed profit-driven thinking behind the change of label too. A high level of quality comes at a high price, but the consumers who are looking for this level of detail and more committed and will be prepared to pay higher prices.

To discuss labelling, or any other aspect of the creation and branding for your own private champagne label, send an email to This email address is being protected from spambots. You need JavaScript enabled to view it. and I’ll get back to you promptly.

All the best from Champagne