1. Champagne: Ursprungsbezeichnung (AOC), Marke und Mythos? - Champagne: Appellation contrôlée (AOC), Brand and Myth? by Ghislain de Montgolfier Chairman of Union des Maisons de Champagne Weinmarketingtag Heilbronn 1 Jeudi 10 mai 2012

2. 2 Weinmarketingtag Heilbronn Introduction 1.Greeting 2.My German ancester :  Jacob Bollinger, borned 5/10/1803 at Ellwangen (Wuerttemberg) ;  Visit Champagne in 1823 ;  With a land owner Athanase de Villermont they created Bollinger and C° in 1829 ;  After six generations, Champagne Bollinger is a family owned company ;  In 1837 married Louise the Athanase’ daughter ;  I used to be the CIO of Bollinger (1994-2010) ; 3.Now : chairman of Union des Maisons de Champagne (UMC), Co-chairman of CIVC (Comité interprofessionnel du vin de Champagne). Jeudi 10 mai 2012

3. 3 Weinmarketingtag Heilbronn Main points I – History of Champagne winepage 4 II – Building Champagne appellation (AOC or GI)page 6 III – Champagne marketpage 7 IV – Prices and Housespage 10 V – Houses – Brand and AOCpage 14 Jeudi 10 mai 2012

4. 4 Weinmarketingtag Heilbronn I.History of Champagne wine 1)Until the 17th century : wines of Champagne was still red wine. Our main fine variety was pinot noir. Our competitors was red Burgundy but they had better color and more stability. 2)Champagne wine makers changed (in 1662 ?)  Red color by white color  Still wine by sparkling wine 3. The technology was difficult and expensive. 4. Difficult : the growers can’t afford. Businessmen and techical men came from Germany.  They control the process of second fermentation into a bottle  They gave their name to the product Jeudi 10 mai 2012

5. 5 Weinmarketingtag Heilbronn 5.Expensive : only the kings and their mistress could afford to pay. 6.« The wine of the kings became the king of the wines. » 7. Champagne : consumption was linked with :  power  celebration  love  and women How « loser winemakers during centuries became winners » (with the same grape variety : pinot noir). Jeudi 10 mai 2012

6. 6 Weinmarketingtag Heilbronn II.Building Champagne AOC 1.UMC (Union des Maisons de Champagne) created in 1882 to protect the name of Champagne against other French sparkling wine (Loire Valley). 2.1904 with growers we gave more consistency (geographical areas, process, grapes varieties, type of vineyard…) 3.1904-1927 : riots and difficults to find agreements and our delimited AREA). 4.1935 : Champagne first French AOC 5.Now a huge job to protect Champagne each year 800 different cases (all around the world), ex. :  Unilever shampoo : they have to stop with Champagne shampoo ;  Swiss village, which name is Champagne, wants to sell wine of Champagne ;  US – GI : Champagne vs winemakers, who are selling « American Champagne ». Jeudi 10 mai 2012

7. 7 Weinmarketingtag Heilbronn III.Champagne market 1.2011 : 323 millions bottle. Turn over : 4,5 billions euros ; 2.« Sensitive » to general economy. For ex. : - soviet revolution 1917 : first market closed - 1929 big crisis : (in 1926 : 11 francs/kilo grape in 1931 : 1 franc/kilo (0,65 euro) - 14 th sept. 2008 : drop after Lehman brothers 3.Positive forecast for new growing economy : Russia, China, Brazil, South Corea, Singapur… 4.Stable in European Union France first market with low prices Germany growing market but small market share for strong brands or cuvée de prestige 5.High price for grape => 5 to 6 €/kilo Jeudi 10 mai 2012

8. 8 Weinmarketingtag Heilbronn En millions de bouteilles 323.96 Expédtions globales de Champagne 1950 - 2011 En millions de bouteilles 323.96 Expédtions globales de Champagne 1950 - 2011 En millions de bouteilles 323.96 Expédtions globales de Champagne 1950 - 2011 En millions de bouteilles 323.96 Expédtions globales de Champagne 1950 - 2011 Jeudi 10 mai 2012

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10. 10 Weinmarketingtag Heilbronn IV.Prices and houses 1.beginning of the XX. century : Champagne wines sold only by houses 2.2011 houses sell 2/3 global volume 3/4 global value 85 % export 3.Houses are selling 30 % higher than growers and cooperatives 4.Price segmentation N1 : price 10 % higher than all houses : 18,70 € N2 : betwen 90 % and 110 % average : 13,65 € N3 : less than 90 % of average price :10,74 € N4 : special brand for mass market Aldi, Carrefour… 11,41 € All houses14,56 € Cooperatives 12,22 € Growers 11,39 € All Champagne 13,65 € Jeudi 10 mai 2012

11. 11 Weinmarketingtag Heilbronn 5.Price for category and market (p. 12) Quite complex but interesting N1 : Houses with strong brand who export mostly overseas (ex. Moët & Chandon, Roederer, Bollinger…) N2 : Houses with brand : French market or European market « European brands » N3 : Houses with and without brands : domestic brands mainly French market N4 : mass market : Europe and France Coop : domestic and European market => French brands Grower : direct sales to consumer Jeudi 10 mai 2012

12. 12 Weinmarketingtag Heilbronn N1 : prix moyen de vente supérieur ou égal à 110 % du prix moyen pratiqué par les Maisons en 2011, N2 : Prix moyen de vente compris entre 90 % et 100 % du prix moyen pratiqué par les Maisons en 2010, N3 : Prix moyen de vente inférieur à 90 % du prix moyen pratiqué par les Maisons en 2010, N4 : Volumes d'approvisionnement par achat de raisin, de vin clair et de vin en bouteille inférieur à 50 % de l'approvisionnement total en 2009. Price segmentation Volumes en bouteillesPrix moyens en € N193 828 21518,70 N234 666 54813,65 N389 937 04910,74 N44 325 64811,41 Total Maisons222 757 46014,56 Total Coopératives28 653 85412,22 Total Vignerons71 556 14111,39 Ensemble322 967 45513,65 Jeudi 10 mai 2012

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14. 14 Weinmarketingtag Heilbronn V.Houses brand and AOC 1.Marketing success story of Champagne was done by houses with strong brands. Even some brands are stronger than the name of Champagne. Ex. : Dom Perignon, Krug, Roederer… 2.But the name of AOC gives the possibility to sell without brand (most growers) 3.Legal comparison brands VS Geographical Indication (GI) is complex (p. 15) GI belongs to everybody : to the state, the country, the terroir, the producers Neither a GI nor an AOC can be sold Brand : is individual property and can be sold. Jeudi 10 mai 2012

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16. 16 Weinmarketingtag Heilbronn Conclusions 1.Houses of Champagne have made wine of Champagne with their knowledge and their name ; Their names are international brands. 2.Without strong brands who accept to spend a lot of money in marketing no more value in Champagne. 3.AOC or GI or appellation contrôlée can’t be well marketed because they promote a standard (in quality, in distribution)… Jeudi 10 mai 2012