Is fizzing up its look enough?
Laurent-Perrier, number three in terms of worldwide sales of champagne, has been getting its house in order. Having bought back Diageo's shareholding, listed on the Paris Stock Exchange in 1999 and finalised its purchase of Chateau Malakoff, a smaller champagne house, earlier this year, Yves Dumont, chairman of L-P's management board, feels he can draw breath. Which makes this a good time to review L-P's image, particularly among the public. Says Dumont: ‘We have been very sales oriented but less focused on the consumer.' In the UK, where alcohol is increasingly bought from supermarkets, that direct connection with the customer is ever more relevant.
L-P wanted a new look for its promotional material, corporate literature including annual reports and press ads. It brought in Paris brand consultancy M Associates, who turned to photographer Jean-Baptiste Huynh. He shot a series of black-and-white images, each intended to express a different variant - a tulip for L-P Brut Non-Vintage, a seashell for Ultra Brut and so on. The labelling on the bottles has not changed, but from next year the images will appear on material from print ads and point of sale to gift boxes, accompanied by a new brand colour - an earthy hue that L-P calls terre de champagne. The move at L-P, which is majority owned by the Nonancourt family, is a step away from much of the imagery associated with the sector. But then, champagne brands are hardly enthusiastic image updaters.
As a glance along any off-licence shelf will prove, champagne is stuck in the design Dark Ages. It's all swirls, crests, gold embossing and italics. The only label that leaps out is Veuve Clicquot - and that's only because it's bright orange or yellow, rather than a pallid cream. Compared with the wine sector, champagne is in a time warp. ‘Champagne houses are incredibly conservative - very few brands in this sector stand out,' says John Blackburn of Blackburns, the drinks packaging design specialist. The champagne companies seem unfazed by this, as sales are going up. Between 1998 and 2002, the UK market value rose by 32% and went up by a further 10% in 2003 to £850m, according to Mintel.
Lack of differentiation means that the whole sector exudes brand values that work for all of the members: exclusive, traditional and refined. Differentiation is instead done through sponsorship, and here the brands are hyperactive. Everyone wants to ‘own' an event or a sport, thereby getting the right people to drink their brand in the right environment.
So Moët Chandon, major sponsor of London Fashion Week, ‘owns fashion', according to David Cunningham, marketing director of Moët Hennessy; Veuve Clicquot, also in the Moët Hennessy portfolio, is the champagne of the ‘season', associated with ladies-in-big-hats sporting events. Mumm, on the other hand, is active in the sailing world and its Formula One sponsorship is estimated by Mintel at more than £10m. So what does this leave L-P to get its teeth into?
Dumont says it is focusing on nature and, more recently, design. Hence its regular sponsorship of a garden at the Chelsea Flower Show, and its Eureka design award at this year's London Design Festival. Unsurprisingly, the vast proportion of champagne houses' marketing spend is on sponsorship rather than advertising or design. L-P doesn't advertise on TV, so sponsorship and event marketing currently account for 90% of its total marketing spend. L-P hopes that its refocus will help move it from a distant fourth in the UK closer to Veuve Clicquot at number three.
The market here is dominated by Moët Chandon, which accounted for 28% of the total market value last year, according to Mintel. Lanson, in second place, accounted for 18%, giving the two top brands together nearly 50% of the market value. Despite the big volume increases, however, these conservative brands need to watch their backs. The funkier and increasingly credible sparkling wine brigade has the potential to threaten their position, with the UK market growing 27% since 1999, to an estimated value of £1.25bn in 2004. So new audiences need to be cultivated.
Moët Hennessy is doing research with unnamed agencies into who these potential new consumers are. ‘Champagne has a lot to learn in targeting new consumers,' says Cunningham, who joined Moët two months ago from Diageo. As this might well mean going for consumers who are less impressed by provenance and heritage and happily slurp cava or prosecco, targeting them will be a challenge. To do so, Blackburn says, the champagne houses need to do more than tinker at the edges: ‘The big threat is the sparkling wines, and tarting up gift boxes to give shelf appeal is not the answer.' Source: Clare Dowdy (2004) Financial Times, 26 October. Reprinted with permission.
Question
1. Discuss what marketing research might mean to a firm such as this.