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Thursday 23 October 2014

Chandon moves into sparkling ‘sweet spot’

4th March, 2014 by Gabriel Stone

Moët Hennessy is targeting the gap between Champagne and the rest of the sparkling category with a major UK launch for its Argentine Chandon brand.

Chandon whiteChandon rosé

Available in the UK from 1 May, Chandon is made using the méthode traditionelle from grapes grown at between 1,100-1,500m altitude in the Uco Valley vineyards established by its parent company in 1959.

Although a wider range is available in its domestic market, where Chandon claims a 50% share of the total Argentine sparkling wine category, the brand’s initial UK offering will be a white blend of 50/50 Chardonnay and Pinot Noir, as well as a rosé blend of Chardonnay, Pinot Noir and “a hint” of Malbec.

Both wines have been made in a drier style than their domestic equivalent with just 6g/l dosage and, although based on the 2011 vintage, feature around 25% reserve wines from 2010.

Pointing to the RRP of £14.99 for the white and £15.99 for the rosé, Jo Thornton, managing director at Moët Hennessy UK, highlighted the “fantastic opportunity sitting between sparkling wine and Champagne where there are not many players at the moment.”

Stressing that Chandon represents “a very different proposition” to the group’s Moët & Chandon Champagne brand, he remarked: “It’s half the price and a different occasion – less formality.”

As for the rest of the sparkling category, which Thornton described as “the fastest growing part of the wine business,” he remarked: “Prosecco from £7-12 has driven the majority of that growth but we’ve seen a sweet spot where we can trade people up – and also down from entry level Champagne.”

With plans to invest £1.5 million in promoting Chandon within the UK this year, Thornton stressed: “we’re very serious about the opportunity,” noting that the majority of this marketing spend would focus on consumer trials and a summer advertising campaign.

“It’s not a test,” he insisted. “We’re clear on the opportunity which is dually led by the quality of the wine and the fact that Argentina is an interesting proposition for us – it’s more interesting for the UK consumer at the moment than, say, Australia, which was another option.”

Thornton linked this launch to a wider strategic move by Jean-Guillaume Prats, head of the group’s Estates & Wines division, to unite all six of the Chandon ventures under the same label by the end of this year.

In addition to its well-established operations in California, Brazil, Argentina and Australia, 2013 saw the launch of the first wines from Chandon India, while Chandon China is due for domestic release this September.

Highlighting “these extraordinary resources of reserve wines and knowhow” derived from Chandon’s longstanding presence in Argentina, Prats argued: “the more vineyard history you have, the more reserve wine there is, the older the vines are and the more you can play.”

Indeed, he attributed the importance of reserve wine for the Chandon brand as part of the reason for delaying the launch of its Chinese sparkling wine for a year, adding: “We wanted it to rest and have longer on the lees.”

The Indian venture, meanwhile, is “flying,” with Prats describing the Nashik-made sparkling wine as “an extraordinary success ­– we’re already short of product.” Having so far established distribution across four Indian cities, the group now plans to launch Chandon in three more this year, while Prats also pointed to the Maldives and “possibly” Sri Lanka.

It is this effort to create a single brand, albeit one produced in six different countries, which Thornton emphasised as a major asset in making the most of this market gap between Champagne and other sparkling wines.

Despite acknowledging the “fabulous” quality of much Prosecco, he argued: “The trouble with Prosecco is that it needs branding. The category is so fragmented across so many producers and grocers, who are selling an enormous amount of own label.”

While Moët Hennessy is notoriously tight lipped about production volumes for its brands, Thornton confirmed: “It’s not going to be enormous but it will be a substantial player.” Meanwhile, indicated Prats, “We can’t produce enough to meet demand.”

Although Chandon’s initial UK offer will be non vintage, the Moët Hennessy team acknowledged the possibility of a future vintage release. “If there’s a need then we could do it easily,” confirmed Prats, while Thornton identified vintage as “probably the next quality we would go to.”

Despite the fact that Argentina’s popularity in the UK is primarily founded on Malbec, Prats maintained that this positive image could be translated to a sparkling offer with relative ease.

“If you have a strong base reputation for high quality winemaking, which producers like Terrazas [de los Andes, another Moët Hennessy operation] and Catena have delivered, that’s a fabulous platform for building sparkling wine,” he argued.

Although a number of other Argentine producers, including international ventures from Mumm, Freixenet and Codorniu, also produce sparkling wines, Prats noted: “We’re double the price of the number two brand in terms of positioning.”

Moët Hennessy has already confirmed a UK off-trade listing for Chandon at Majestic Wine, with Thornton adding that “we’re close to confirming one multiple grocer for this year” as well as an aim of “growing distribution with independent specialists.”

In the on-trade, Chandon will be listed as the sparkling house pour at upmarket Argentine restaurant chain Gaucho, with the Mitchells & Butlers pub group also on board.

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