Laurent Reinteau – Keep it simple

But what’s the main motivation for Reinteau’s change of approach in the UK – a market that accounts for 9% of Jacquart’s exports? Surely shifting from distribution in mainstream retail to the on-trade will affect Jacquart sales? “Champagne is about value,” he quickly states, before stressing that the pursuit of a purely volume strategy is unsustainable. “Shortages are always part of the business – Champagne is 35,000 hectares and while you can adjust the area a bit you won’t change the business model – you should go for quality and value,” he says.

Nevertheless, if there’s an operation with an enviable supply of grapes, it’s Jacquart. As Reinteau reminds, the brand sells fewer than 10 million bottles but has – through Alliance – access to 2,400ha, which represents a production of 24m bottles (based on an average yield of 1,200 kilos of grapes per hectare). This, Reinteau explains, brings stability to Jacquart. “The supply of grapes is one of the key success factors and if one is to be successful in Champagne you have to have a high-quality grape supply.”

INVESTING IN THE BRAND

The situation does not however, bring a temptation to discount, because while Jacquart may have the grapes, it, like the rest of Champagne, faces increasing costs. “Grape costs are rising – this year again they are up by 3.5%, that’s a fact,” he says, adding, “but at the same time we are able to increase prices by 3-4% this year.” And, as he points out, “Because our shareholders are wine growers they look for a long-term return – we are not looking at the stock exchange; we can afford a smaller return in the short term and invest in brands.” And as for brands, Reinteau is clear on the threat. “There are still lots of brands in Champagne – there are 13,000 – and this for me this is too much and there needs to be a contraction.” This he believes will occur due to a “the lack of investment by brands in advertising and promotion”. Explaining the challenge, he says, “If you compare Champagne to spirits, the spirit model is very low-cost production and very high advertising and promotional investments and therefore well known brands.” In Champagne on the other hand, the rising cost of grapes (and pressure on retail prices), Reinteau believes, is making it harder to invest in brand building.

Summing up, he presents a powerful contrast. “Two thirds of the cost of a bottle of Jacquart goes on the grapes. If we were making vodka, this would be less than 10%.” And, as he states, “This is something we need to be cautious about.” db

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