Companies news

Read Between The Vines: Chat With Moet Hennessy’s Philippe Schaus

A little over two years ago, Philippe Schaus took over the corner office at French luxury major LVMH’s Moet Hennessey business.

A little over two years ago, Philippe Schaus took over the corner office at French luxury major LVMH’s Moet Hennessey business. Since then, the high-end spirits business has grown from strength to strength on the back of a product portfolio that includes Moet & Chandon, Krug, Veuve Clicquot, Hennessy, Dom Perignon, Glenmorangie and Belvedere, - gaining market share over competitors across the globe. In an exclusive interview with Brand Equity, Schaus talks about the India business, impact of climate change on wine-making and global trends in high-end spirit brands.


How are Moet Hennessey brands doing in India?

India is still a market in the making, it’s not yet in the Top 10 markets for Moet. We have estimated that the population that consumes luxury wines and spirits is about 4-5 million people at a stage. It's still small but it's growing very fast. It will become an important market probably ten years down the road, if the trends continue. But the high import duties hurt our business and impacts market size. We play two ways in India: On one hand we are distributing our key brands - Dom Pérignon, Moët & Chandon, Veuve Clicquot, Hennessy, Glenmorangie, Ardbeg, Belvedere and also we have our own winery in India which produces Chandon sparkling wine that is sold in India and some neighbouring countries.

Was starting your own winery in India about lowering cost of production?

No, it wasn’t about the cost, it was about availability of grapes and about growing the French wines. In 1960s, the Moet and Chandon family realised that Champagne terroir was limited in size and grapes. The whole Champagne region produced 300 million bottles for last 20 years, it cannot grow. The surface which defines the region of Champagne is 100 per cent utilised. They went out to find great terroir, the climate, the soil, the altitude and all that where we can make best possible sparkling wine. They started first in Mendonza valley in Argentina, they went to Napa Valley, they went to Brazil. Then we came to India and China and in each country we explored the entire country to see where we can produce the best wines.

China is slowing down but the luxury good makers still seem to be doing pretty well in the market and the market size of luxury goods is several times bigger than India. Why is China such a big luxury good market?

China has been much more robust in building a big middle class and that middle class is travelling, getting exposed to luxury products, bringing that taste home and also getting those products in their country. For many luxury brands, a large part of growth comes from China. There is so much wealth in China and wealth is much more spread out. They don’t have these high import duties so it’s easier for the consumers to acquire imported products. Now there are Chinese luxury brands coming out because the consumer has now been educated. But India also has a very strong tradition of its own, like in jewellery and some luxury brands in the apparel world.

Consumer tastes are changing rapidly world over, how are you making sure your product portfolio remains relevant in such a changing scenario?

We play in the high end of the market. So when you look at a cognac like Hennessy, a product which has a very high level of excellence, wherever a customer tries it, we win him or her over. On one hand our success depends on a very high level of excellence in our products, that’s true for Glenmorangie, that’s true for Hennessy and our champagnes and then there are society and taste trends. These phases have always been there, like gin-based cocktails or tequila, they come and go; it’s a bit like fashion. But there is always an inherent set of consumers in the market who continue consuming highest quality products. Another trend is more healthy consumption. On a worldwide basis, people are drinking less alcohol but when they drink less, they tend to go for upscale brands. In cocktailing, you see people go for less sugar. We gain from these trends.

In a category like high-end wine where it’s all about keeping age old traditions alive, how do you manage innovations?

You can’t innovate every year in hundred new products, but if you can, you should from time to time, bring in something that adds to the franchise of the brand and also pulls in new customers too. Take Moet Chandon Ice Imperial which was created to be consumed on ice in the summer with a little bit of garnish on it. It was a special development for that market. It has been a huge success. So even in a segment like high-end champagne you can innovate. Veuve Clicquot Rich Champagne, is another champagne to be consumed on ice. Chandon has created a sweeter drink called Delice which is also consumed on ice and served with a garnish.

Is social media becoming an important part of the advertising mix even for high-end spirit brands?

I believe that you have to act on many, many fronts at the same time. You have to have traditional advertisement from time to time and in certain places, you need to do events. We do lot of events in bars and restaurants. You need to work with social media influencers, journalists, customers; it’s a 360-degree communication all the time. You have to be present in all channels.

Climate change will have a major impact on crops around the world. What kind impact do you expect in your business?

Climate change is happening, it's a reality. And we measure it in our vineyards, for instance, the harvest time is now 2-3 weeks earlier than it was 50 years ago. That is already an impact. But at this stage the climate change has, if anything, improved the quality of grapes in Champagne. If it continues to warm up, which we believe it will then our winemakers will have to adapt to new methods to react to that, like trying new strains of grapes, change the way you plant grapes, way you cut the vines at maturation stage. Our wine-makers will have to adapt to deal with climate change.

In your career, you have changed industries as well as categories. How did you manage the transition each time you moved to a new environment?

What I carry from one business to another is the leadership. Making sure we have the best experts in each category and that I listen to them. I have an insatiable curiosity, I like to understand what I am doing. I ask a lot of questions. I know what I understand and what I don’t understand in a business. I need to run the organisation which develops it products, brands. And then the products, which comes at the base of this gets nourished by hundreds of years of experience and passion.

Source - ET Brand Equity 
 

Articles sur le même thème

Evénements sur le même thème

Share this page Share on FacebookShare on TwitterShare on Linkedin