Share |

Keeping the fizz in families

The world of wine is dominated by family businesses, and nowhere more so than in Champagne.
The world of wine is dominated by family businesses, and nowhere more so than in Champagne.

The Krug family has long held to a charming tradition at the birth of each male child: before the infant is introduced to the mother’s breast, it receives a thimbleful of champagne. When on their deathbeds, in a rite similar to the Catholic sacrament of Extreme Unction, family members receive another thimbleful, more if requested. Thus the opening and closing moments of their lives are saluted with the endeavours of their family, the work of several lifetimes.

The wine world is intimately connected with family. The domaines of Burgundy have long been passed on to sons – and now daughters. Sherry bodegas and port lodges bear the family names and crests of three centuries. Then there are the venerable family-run UK merchants like 300-year-old Berry Brothers and Lay & Wheeler, which ran for 150 years before becoming part of Majestic Wine in 2009, not to mention Bordeaux negociants like the sixth- generation Sichel family. Family suggests continuity, stability and respect for the endeavours of the past.

Those are all assets when considering cellars of fine wines, which require steady, uninterrupted maturation and then proven, profitable routes to market. It’s no surprise, then, that this emphasis on family pervades all areas of the industry, from grape growers like the Geoffroys in the Marne district of Champagne, who have been crafting wines from their own lands since the 17th century, to the Austrian Riedel family, which has been making glasses for wines since 1756 and now offer specific glasses to sample different varietals, including several different stems for different champagnes.

Bordeaux has its chateaux, Burgundy its domaines, but the Champenois refer to their estates as maisons and, however grand the buildings are, a house is first and foremost where a family lives. The fact champagne itself is a family comes in to focus with the words of Françoise Peretti, UK director of the Champagne Bureau: “Champagne is one region, one appellation, one wine, its continuing success requires that everybody pulls together, grower and grande marque, marching to the same tune.” It seems to be working. Sales are up 10%this year.

Even multinationals are recognising the importance of relationships over branding. At Harper’s Champagne Summit earlier this year, Moët Hennessey’s UK managing director Jo Thornton said the company was, for the first time in 20 years, concentrating on the “hand-sell” environments of restaurants and independent merchants – both often family businesses themselves – which thrive on trust and reputation. This trend is particularly significant for those champagne houses whose success is based less on global marketing spend and more on nurturing close bonds.

Given the unrelenting global demand for top quality bubbles and the high prices that even modest growers can command from the larger houses for their grapes, plus the fact that land prices in the region look set to top €1 million per hectare, it is no surprise that the younger generation in Champagne are keen to carry on their family businesses. But the respect for tradition should not suggest an industry in stasis. New challenges and changing markets are being met by successive generations with their own ideas, new technologies and, with the rise of social media, new ways of communicating.

For family houses this route to market and opportunity to engage with consumers unfamiliar with lesser known names is vital. Justine and Benoit Tarlant, who run their family house, are particularly good at engaging bloggers, sommeliers and consumers using Twitter.

More traditional challenges like the climate – both physical and economic – are continually being readdressed. Warmer and wetter weather is a problem for Champagne, which relies on steeliness, minerality and acidity to give the wines vivacity but also longevity. Houses are working to penetrate new markets in the Bric countries – Brazil, for instance, recently launched its own champagne association. Modern responses to all this mean that the Champenois have so far been successful in limiting their troubles and exploiting the opportunities. Like the wines they produce, Champagne’s next generation are serious, but effervescent.

Grape growers in Vertus in Champagne for seven generations, the Colin family grew its estates through marriage in the latter half of the 20th century, acquiring grand cru sites in the mid-1990s. Shortly afterwards the family left the cooperative which it was a part of, becoming an independent house.
What are the challenges and advantages of being a family business? As a very small team, we must be able to do a lot of different jobs equally well and be flexible with roles: farmer, winemaker, salesperson, PR and marketing, logistics. However, the benefit is that we can take decisions very quickly and those who work with us, whether in the fields or in foreign markets, are in direct contact with the key team members.
Is the changing climate a problem for the new generation? The weather has been more clement in the last 10 years, although this year is an exception. It is still very changeable but we are more adaptable and as a small operation we can stay close to our vines and respond in a timely fashion. The warmer weather means we tend to harvest earlier than the previous generation, so sugars are at a lower level than they used to be.
What is your impression of the export market for champagne? Buoyant, but it is important to be seen out at trade shows and fairs, particularly if you are not a globally recognisable brand, as the important emerging markets are only just beginning to discover smaller producers. We also need to maintain our position in existing areas because cava and other sparkling wines are beginning to impact. However, increased interest in rosé and Extra Brut styles from Champagne gives us a range of quality products to concentrate on.

Third-generation estate-owner Cécile is the granddaughter of Janine Moriset and Yves Pertois, who created the house in 1951, combining family lands in the Côte de Blancs including those from grand cru sites in Cramant and Mesnil. With husband Vincent she crafts fine chardonnay-rich champagnes, from vines averaging 30 years old.
What are the different business models for growers in Champagne? There are three main categories: traders, cooperatives, and harvesters-handlers. The former two sell their grapes or blend with others, but as a family of growers who produce our own wines from them, we work with only our own vineyards, so are able to control every aspect of quality.
Is the new generation in Champagne facing new problems? There are always problems: changing tastes and climate and tackling new markets are significant, issues as well as producing sufficient product to meet demand. In the past the major problem was the battle to protect our name and identity against pretenders. But the Champenois are used to challenges and mobilise together.

The Penet family has been in Champagne for over 400 years, acquiring vineyards in Verzy during the revolution, adding a 19th century property and winery in the 1940s and through marriage in 1960s, to the Chardonnet family, more lands in Verzenay. A state-of-the-art winery followed in the 1980s. Alexandre took over as CEO in 2009 and started a strategic repositioning on the global market as a top boutique house, culminating in the launch of a new brand called Alexandre Penet to sit alongside existing ones in 2011.
What are the practical differences between businesses that are family-owned and those that aren’t? In a family, luxury business – particularly in wine – there is this extra emotion, character and authenticity which create personal ties with the customers in a way that cannot be matched. Even the downside of, in some cases, having more limited resources are offset by the family members’ passion and their energy.
What are the main challenges the industry faces today? In the face of growing demand, the strategic choice is between increasing volumes and risking damaging quality and reputation if the growth is not managed sustainably, or improving our leadership among sparkling wines and focusing on premium, rare products. We follow this second path, focusing on “terroir” as opposed to “blending-for-consistency”. Environmental issues are also important, and the need to promote champagne in emerging markets as more than just a celebration drink.

Hubert is the fifth generation of this family-owned grande marque, Winston Churchill’s favourite and the choice for last year’s royal wedding. Prior to the 1950s and the decision by Christian de Billy to start purchasing vineyards, Pol Roger actually owned no vines, but now the estate has 89 hectares, which supply 50% of their requirement. The remainder is sourced from trusted smaller growers.
Do family champagne houses share a common philosophy? The desire to create a legacy because we recognise we are essentially custodians for the next generation. We value our independence and the control we have on our product – for example we don’t have to release stocks from the cellar the moment they reach the minimum age of 15 months just because a board of shareholders requires it.
What support is there for the next generation of champagne growers? In Champagne, the CIVC [Comité Interprofessionnel du Vin de Champagne] is a useful forum, as is the Champagne Academy Group, which I am very involved with. But it’s also quite a small world and many of the key players in family houses were at school or university together. The government’s support for the expansion of the appellation will also enable supply to meet global demand.
What are the key issues and hopes for Pol Roger in the 21st century? In the mid-term, managing a luxury business during an ongoing recession. In the longer term, being able to supply the new and expanding markets with only limited stock and resource. We are expanding production from 1.5 million to 1.8 million bottles per annum, but we are one of the smallest grand marques and must always prioritise quality over volume.
What are the forums within the industry where the houses, particularly the next generation, can communicate? Social media is increasingly important, particularly for the next generation, and Reims Business School’s Chair of Champagne helps to spread new ideas. 

Click here >>