Champagne Business: Facts and Fiction(2)
2. One Champagne or many champagnes?
Champagne is a perfect example of what can be termed a territorial brand; that is, a product that can only be produced in a particular place and not elsewhere.
A territorial brand is a place-based umbrella brand which belongs to all the producers in a definable territory, and which necessarily exists because the product they make can only be created there and cannot be replicated anywhere else (the concept embraces a number of food and drink products as well as destination brands).
Thus the territorial brand exists together and in cooperation with a number of individual proprietary brands of the same product. The word ‘champagne’ is known by millions around the world, and desired by them, even if they cannot name a single individual champagne brand—and this is part of the wine’s strength, and a factor which reinforces the position of the individual brands.
But this naturally adds further tensions; each member of the champagne industry has an interest in the territorial brand being successful (for their positioning depends in part on it) yet at the same time they also want to promote their individual brand, and do not want it to lose market share to the others who also benefit from the strong territorial brand.
3. Tipping point or balance?
Managing the equilibrium between the two ‘families’ of champagne (growers/co-operatives and houses), and the flow of wine onto the market is thus a complex process. Since 1941 this has been managed by an interprofessional body—the CIVC.
The CIVC has joint presidents (always one grower and one representative of the houses) and its council is made up of equal members of both sides of the industry. For decisions to be reached the two families therefore have to reach agreement.
Yet the role of the CIVC goes beyond just keeping a balance. Effectively it has become brand manager for the territorial brand of champagne. It has a role managing relationships between the two families.
It can also set rules for the way in which the wine is made in order to guarantee its quality; thus it attempts to preclude producers of poor quality wine undermining the value of others by harming the overall reputation of the territorial brand.
Additionally it controls how much wine is produced each year, thus effectively managing the flow of the product onto the market, in response to demand. In these last two areas it has quasi-governmental powers to set rules, thus allowing it to wield immense power over the individual producers—although these latter in turn control it.
4. The big brands and the small local producer
Although there are over 5,000 champagnes available, even the most knowledgeable consumer will know no more than a couple dozen.
Five large groups of companies produce over 40% of all of the wine. Alongside them are some medium sized houses and then the many small grower-champagnes, predominantly sold in France and often only in the region itself.
Yet this disparity itself strengthens perceptions of the wine. The largest companies make tens of millions of bottles of their brands yet the strength of the brand relies on consumers believing it to be a finely-fashioned, almost artisanal product, made by traditional methods.
The continued existence of these many smaller producers, who make on average only 6,500 bottles per year, helps to maintain this idea of an authentic hand-crafted wine.
5. Resolving the paradoxes: The mythology of champagne
The tensions between the two sides of the industry and the complexity of the internal organization are resolved not merely structurally, but also by the existence of a series of stories which serve to underline the apparent unity of vision and purpose in the industry.
Champagne is an industrially-produced wine coming from a single region, and representing what the French call terroir–thus providing a unique taste of that place; at once manufactured but also agricultural, rural and local.
It is a wine made and marketed by the most modern techniques imaginable, but which is based on a three hundred year old process which it reinforces with a series of historic brand heroes, such as Dom Pérignon, la Veuve Clicquot, ‘Champagne’ Charlie Heidsieck, and Madame Louise Pommery.
It is traditional, invented by a monk (the representative of God), and established as the bourgeois symbol of celebration par excellence, yet also the drink of glitzy conspicuous consumption.
These paradoxical myths are useful in marketing, but they also serve to reinforce the industry’s internal cohesion, vision and sense of purpose.
