Luxury World: The Past, Present and Future of Luxury Brands

by Tungate, Mark

  ‘It was actually the English who helped us out with that one,’ smiles Lorson. ‘Your glass company Pilkington was one of the first to produce a bottle solid enough to resist the fermentation process.’

  There were other reasons why the 19th century was a crucial era for Champagne. Fermentation was still a tricky, barely understood process – but in around 1820 the Champenois began adding a small amount of crystallized sugar to each bottle to boost the second fermentation. Tests showed that four grams of sugar per litre resulted in an almost uniform pressure. Meanwhile, in 1860, Louis Pasteur unmasked the microscopic organisms – yeasts – that caused fermentation. After further experimentation, this allowed champagne producers to influence the course of nature. Today champagne is created using a process known as méthode champenoise.

  Briefly, this involves fermenting the musts in tanks to remove the sugar. The resulting base liquid is then blended with wines from other grape varieties, vineyards and harvests. Each year, base wines with good ageing potential are set aside as ‘reserve wines’, which are added to the blend to add balance and maturity. Reserve wines can be stored for up to 10 years. Occasionally, they form up to 40 per cent of the final blend. This mixing and matching of wines to arrive at an intended taste and aroma is the art of the champagne winemaker.

  When the blending process is complete, the wine is ready to be bottled. Before doing so, however, the producers add a small quantity of yeast and sugar. This provokes a second fermentation within the bottle itself. The bottles are initially stored horizontally so the yeasts can grow and multiply across a wide area – rather than suffocating at the bottom – while feeding on the sugar-producing alcohol and carbon dioxide. This process takes about six to eight weeks. Once all the sugars have been consumed, the yeasts die, forming sediment that is removed before the final corking. By that time the bottles have been tilted downwards and the sediment has gathered in their necks. Removing it is a neat trick – but we’ll get to that later on, after touring a couple of dank cellars.

  A NAME TO RECKON WITH

  The general consensus when writing about champagne is that the region – Champagne – takes a capital ‘C’, while the drink does not. In the eyes of most of the world, champagne is a generic product, like whisky or wine. But that is not, in fact, that case. Champagne is a brand name, heavily protected and fought over by its guardians at the CIVC. In 1993, for example, the organization blocked Yves Saint Laurent from selling a fragrance called Champagne. The Paris Court of Appeal ruled that the use of the Champagne appellation was ‘exclusively reserved for wines originating and produced in Champagne’. This was by no means the first case of its kind.

  The struggle dates back to the late 19th century, when a phylloxera epidemic devastated the vineyards. Phylloxera is a tiny bug – a little like an aphid – that feeds on the roots of grapevines, choking the plant. Originating in North America, the insects were thought to have been brought to Europe on the cuttings of more resilient imported vines. The epidemic left the vineyards of Champagne ravaged. Facing ruin, growers and merchants joined forces to replant the vineyards and re-establish the reputation of their wine. In order to promote and protect the region’s heritage, the larger champagne houses began taking legal action against producers who used the word fraudulently.

  Daniel Lorson of the CIVC says ‘Some growers from the Loire were not only using the word “Champagne” on the label, but also the names of villages in our region. From this concern sprang the idea of creating an official “appellation”, stating that only wine made here could be sold under the name Champagne. In fact the appellation system, which other wine regions would later adopt, was born in Champagne.’

  Although ‘Champagne’ was proposed as an appellation in December 1908, it lacked the force of law and there was controversy over the borders of the region. Growers from the neighbouring Aube, for example, initially excluded from the territory, staged a minor revolt in 1911 when a poor harvest and their inability to use the Champagne brand name threatened to undermine their livelihoods.

  The situation was resolved in 1927, when government legislation strictly delineated the Champagne region. The law also stated that only pinot noir, pinot meunier and chardonnay grapes could be used to make champagne. The final seal of approval came in 1935 when the government created a committee to oversee and classify appellations. Champagne became an Appellation d’Origine Contrôlée (AOC) on 29 June 1936. But, as we shall see, its problems did not end there.

  The CIVC has three main roles. The first is to represent the interests of both the growers and the champagne houses. For example, the CIVC releases all the figures concerning the financial performance of the champagne sector. It also regulates the harvest dates and monitors quality. In addition, the organization has a technical department (with a staff of 50 researchers) that uses the product of its own 13-hectare vineyard to experiment with innovations in champagne production. Among other things, it has studied the phenomenon of champagne bubbles.

  Connoisseurs set great store by the choreography of the bubbles in a glass of champagne. Ideally, these should rise gracefully to the surface in a column known as ‘the chimney’, growing slightly larger en route as they become engorged with oxygen. The ring of bubbles that clusters around the edge of the glass at the surface is called ‘the necklace’. Uniformity of bubble and a certain restraint, as opposed to vulgar popping and fizzing, are the desired effects.

  Finally – and most importantly for our purposes – the CIVC is responsible for protecting and nurturing the image of champagne.

  ‘It’s a public relations task, certainly – but it’s also one of education,’ says Lorson. ‘We rely a great deal on the press to help us spread the fundamental message that champagne only comes from Champagne.’

  To make sure the message is spread globally, the CIVC has 13 bureaux around the world. The first was set up in 1953 in the United States, which is where most of the ‘attacks’ on the champagne brand occur. In Europe, the champagne appellation is protected under European Commission regulations – but in the wider world it is nakedly vulnerable. Certain California producers still insist on labelling their sparkling wine ‘champagne’. The US office of the CIVC has run print advertising acknowledging that this practice ‘may be legal – but it’s not fair’. In an effort to avoid sounding pompous, the ads humorously turn the tables. ‘Alaska salmon from Florida? Monterey Jack from Alaska? Washington apples from Nevada? Florida oranges from Maine? Gulf shrimp from Nebraska? Champagne not from Champagne? No way!’

  The most recently opened offices are in Beijing, Moscow and Delhi. The CIVC also has access to a network of 60 legal firms around the world. ‘It’s a big machine,’ says Lorson, ‘but it’s crucial to the health of this region’s economy. If the name Champagne means anything today, it’s because we have gone to great lengths to ensure that it is respected.’

  GOLD BENEATH THE STREET

  After leaving the CIVC building, I follow Lorson’s advice and head for a wide, gently ascending street called Avenue de Champagne. Once upon a time it was known as Faubourg de la Folie – the street of extravagance. Its more recent name derives, of course, from the fact that it is lined with prestigious champagne houses: Moët & Chandon, Perrier-Jouët, De Castellane and Mercier, to name but a few. Residents of Epernay will tell you that it is the richest avenue in France – worth far more than the Champs Elysées – due to the thousands of bottles of champagne stored in cellars deep beneath its surface.

  As we know, the church produced the bulk of the early champagne wines, which at that stage were not effervescent and were transported in wooden casks. In 1728 a royal decree allowed for the transportation of champagne in bottles in order to preserve its sparkling quality. (Prior to that time it was felt that glass was too fragile to transport.) This seemingly innocuous change uncorked a champagne revolution.

  First into the market in 1729 was a young draper called Nicolas Ruinart, who initially sent bottles of champagne to his wealthy clie
nts. Soon he was running a fully-fledged champagne house. He certainly had the right connections – his uncle, Dom Thierry Ruinart, had been close friends with a Benedictine monk and celebrated cultivator of vines named Dom Pérignon.

  The house that would later become Moët & Chandon was established shortly afterwards, in 1743. Today, Ruinart, Dom Pérignon and Moët & Chandon are all owned by the luxury conglomerate LVMH – among with Veuve Clicquot, Krug and Mercier.

  Because it is the market leader, Moët & Chandon is the first champagne house I visit. Its flagship building certainly suggests great wealth. This is not just a house – it is a manor house: a white-fronted mini-Versailles with formal gardens, ornamental ponds and splashing fountains. The gift shop is a more recent addition. The administrative headquarters of the brand are tucked away in a banal office building around the corner, but the Hôtel Moët is its impressive public face. I hang out in the marble-floored lobby with a clutch of American and Japanese visitors and tag along with them on a cellar tour.

  The early champagne houses had an advantage because they found at Epernay a labyrinth of chalk pits that had been excavated by the Romans. These made ideal cellars. Moët & Chandon possesses 28 kilometres (or 18 miles) of cellar space, much of which has been carved out since the 18th century. According to our guide, these dimly lit spaces feature 80 per cent humidity and a temperature of a fairly steady 10° C (50° F).

  Although Claude Moët founded the house, his heir Jean-Rémy is said to have established the brand’s scintillating reputation. When Cossack and Prussian troops were busy looting the cellars in 1814, Jean-Rémy noted that the drunken soldiers were actually doing him a favour, because they would ‘sing the praises’ of his product when they returned home. Moët was already on its way to becoming a global brand. Jean-Rémy’s grandson Victor Moët and his son-in-law Pierre-Gabriel Chandon took over the business in 1832.

  But a more recent – and highly colourful – figure transformed the house into the giant that it is today. He also had a direct impact on the structure of the contemporary luxury industry.

  Count Robert-Jean de Vogüé was born in 1896 into a prominent aristocratic family in Ardèche. He volunteered to fight in the First World War at the age of 20, emerging with a Croix de Guerre. He joined Moët & Chandon in 1930 and proved adept at marketing. For instance, although the name Dom Pérignon had long been associated with the production of champagne – the monk was one of the first to successfully blend grape varieties – the brand did not exist in the public domain until 1936, when Vogüé launched it. The idea sprang from a limited edition wine that had until then only been consumed within the family. The cuvée (vintage) soon became more venerated than its older brother.

  Vogüé’s career was interrupted by the Second World War, during which he once again covered himself in glory as a resistance fighter, his exploits earning him the nickname ‘The Red Marquis’. He was arrested by the Gestapo in 1943 and sent to a forced labour camp, where he remained until the British freed him just over a year later. He returned to Moët & Chandon and the presidency of the company. In the 1950s, he transformed the champagne house from a family-run concern into a corporation, floating it on the stock market. With the proceeds, he was able to snap up rival houses Ruinart and Mercier.

  But Vogüé had more visionary plans for the company. Due to the 1927 legislation that had limited production of champagne to a strictly defined area, he felt that demand would soon outstrip supply, and that Moët should make provision for its future income by expanding into other areas of the luxury industry. In 1970 he bought a stake in Parfums Christian Dior. He also began merger negotiations with the cognac producer Hennessy & Co, leading to the creation of Moët-Hennessy in 1971. Rather than shunning the United States – as a French wine producer might have been expected to do – he launched the California winery Domaine Chandon in 1973. Vogüé died a couple of years later, leaving the company in the hands of his protégé Alain Chevalier. In 1987, the final stage of the transformation was complete: the merger of Moët-Hennessy with luxury luggage maker Louis Vuitton, forming LVMH.

  Property developer and financier Bernard Arnault initially arrived on the scene as an investor, but he quickly became embroiled in a three-way battle for control of the company between himself, Chevalier and Henry Racamier, the distinguished chairman of Louis Vuitton (‘A luxury fight to the finish’, The New York Times, 17 December 1989). Arnault emerged the victor. He has since taken the group to lofty heights – but the foundations were put in place by Robert-Jean de Vogüé of Moët & Chandon.

  Today, as our little tour winds through the cellars of the venerable champagne house, our guide struggles to maintain an impression of artisanal luxury. She tells us that Moët & Chandon owns 1,000 hectares of vines – making it the biggest landowner in the region – and that it also buys grapes from other growers. She apologizes that the house is ‘not allowed to talk about production’. In fact, as it has a 20 per cent share of the market, LVMH is obliged to produce champagne on an almost industrial scale: up to 37 million bottles a year, according to the French newspaper L’Humanité (‘Bulles financières’, 20 February 2009), with annual sales of between 25 million and 30 million bottles. Meanwhile, the official website of the Union des Maisons de Champagne reveals that the house had a turnover of !901 million in 2008 (www.maisons-champagne.com).

  Bearing all this in mind, it’s hard to hold on to the guide’s image of the workers known as remueurs, who painstakingly turn each bottle by hand to dislodge the yeast sediment (a process known as ‘riddling’ in English). I later learn that in most champagne houses this task is performed by a machine called a gyropalette, which works 24 hours a day, seven days a week.

  Moët & Chandon’s response to suggestions that it traffics in mass luxury remains Dom Pérignon. Most champagne is made not only of blends of grapes from different varieties and sites, but of grapes from different years. However, the houses also release collectible ‘vintage’ champagnes, made from the grapes of a single harvest. All Dom Pérignon champagnes are vintage (the French term is millésimé) and each bottle is aged in the cellar for eight years. This quality comes at a price. The French business publication Challenges suggested that every bottle of Dom Pérignon represents a profit margin of 50 per cent for its producer. (‘LVMH fait mousser ses champagnes’, 3 March 2009). As one of the magazine’s anonymous sources explained, the cost of producing a Dom Pérignon is not much higher than that of producing a Moët. The difference is that one bottle sells for about €150 – and the other for €30.

  KINGS, TSARS AND RAP STARS

  The second of the Champagne region’s twin poles, Reims – pronounced ruhns with a slight guttural inflection – lies behind the drink’s association with upmarket revelry. The first king of France, Clovis, was baptized here and it became a tradition that French kings were crowned at the city’s cathedral. These occasions were inevitably accompanied by joyful carousing, much of which involved swigging the local wine.

  Today Reims is a calm, pleasant city of wide, tree-lined boulevards. One of the passengers who alighted from the train with me was a young man with a Louis Vuitton bag and a large shaggy black dog in a matching collar. I put the stately boulevards and the wealthy visitor together and came to the conclusion that Reims was a rich town. I was wrong. Unemployment is high and there is a large divide between the fortunate families who run the champagne houses and just about everybody else.

  My next scheduled visit is with Louis Roederer. Compared to Moët & Chandon it is a small house – selling some 3 million bottles of bubbly a year – yet it makes one of the world’s most famous champagne brands: Cristal.

  The Louis Roederer headquarters is a 19th-century mansion. I perch gingerly on a Louis XVI chair in a lobby decorated with potted ferns and tapestries, before gratefully rising to meet the house’s spokeswoman, Martine Lorson. And, yes, that name does sound familiar: Martine is married to Daniel Lorson of the CIVC. Champagne is a sociable business.

  It’s po
ssible to argue that the champagne houses have been far more successful at marketing than ‘conventional’ wine producers. This may be because the champagne houses are merchants, while the chateaux of Bordeaux, for example, are located in the midst of their own vineyards. ‘Originally this region was noted for its textiles,’ Martine explains, as she shows me into a boardroom lined with family portraits. ‘But when it became evident that sparkling wines were about to develop into a major business, some of the families who worked in the textile trade transformed themselves into champagne merchants.’

  Perhaps that objectivity gave them an edge. Champagne houses are sophisticated, urban creatures, located in town centres above the cellars where their precious product is stored for between 15 months and three years, on average. Louis Roederer wines remain in the cellar for five years. In some ways this is an old-fashioned champagne house – independent and family owned.

  Louis Roederer inherited the house from his uncle, one Nicolas Schreider, in 1833. By 1868, Louis was selling 2.5 million bottles a year, mostly to Russians who had – as Jean-Remy Moët had predicted some 50 years earlier – developed an unquenchable thirst for the drink. Of all the family members who followed Louis, the most remarkable was Camille Olry-Roederer, who became director of the house in 1932 after the death of her husband, Léon. This determined and energetic woman ran Louis Roederer for more than 40 years. ‘By the time she took over, the house was suffering,’ recounts Martine. ‘Sales had sharply declined after a succession of disasters: the Russian Revolution, which robbed it of its biggest market, the phylloxera epidemic, the depressed global economy... it’s fair to say that, were it not for Camille, the house would have gone under. Her husband had been considerably older than she was, so when she took charge of the house she was still in her early thirties. She was dynamic and persuasive.’