In this next sequence, we talk to Paul Beavis, Managing Director of Lanson International,
about how Lanson goes to market in the various international markets in which
it has a presence. I think you'll find particularly interesting, the differences
in style and strategy that Lanson has in pursuing the French
versus the UK markets and also other international markets.
Well, Lanson started back in 1760, so we're the fourth oldest, what
they call international brands or Grande Marque was the original name given to
all the old houses. It's a father and son business in 1760 and pretty much even to
present-day we've remained very true to that. Slight blip in the 60s, the late 60s
actually, where it became owned by somebody else for short period of time,
but we're fundamentally still a father-and-son organisation today.
Lanson has been one of the first brands, if you like, to really take the
international platform and try and drive distribution into international
markets and we are the only house still to have it's very own 'clos', a clos is a
vineyard right in the heart of the city of Orléans so we are intrinsically
connected to Lans and a relatively smallish sized organization. What does
that mean? We have a turnover size of about 300 million euros, fundamentally
family-controlled, with about 300 employees on the global scale.
It's a fascinating area in the sense that vines have been
planted in the region for over 2,000 years. It was actually the Romans who first
planted vineyards and vines in the Champagne region. Everything in champagne
is done by hand. The root grafting and the picking, everything is done by hand.
People talk a lot about dedication to quality and investment in researching
and making sure that what you're producing is some of the best in the world.
Champagne is quite quiet at expressing that. It really is one of these industries
that just gets on with it. It's controlled by the CIBC, which is the
governing body in France and really since the late 50s there's been a huge
investment in terms of future proofing, talking about what are the impacts
on global warming for champagne for example. With champagne, you need high
levels of acidity. Does that mean that we'll start picking the grapes slightly
earlier than normal because we need the acidity, not the sweetness in the
grapes as it were? So it's a very quietly dynamic industry actually and if you
ever come to Champagne, you understand that this is a farming territory
of people who are the growers who predominantly own quite a lot of the
vineyards in Champagne - they're farmers. They are trying to produce the best they
can and the power of genuine relationships in Champagne is vital.
Lots of houses own their own vineyards but not many people owning enough vineyards
in order to produce the grapes or get enough grapes for their production. So
the people like the winemakers and the families and the longevity of
generations or families selling to certain houses of their grapes is
absolutely essential.
The UK historically has been the first export market for a lot of houses. It's a
market that's worth about 31 to 32 million bottles and on average, over the
last 10 years, volumes have never really fluctuated more than between five and ten
percent either up or down of that figure. The UK is essential to the
champagne market globally. As a matter of fact we consume, if you look at the
population of the UK, quite a lot of champagne. We have a taste for champagne.
Fundamentally it means that we're quite a mature market within the category and
there is a thirst for flavor profiles of champagne, people have brands that
they've been affiliated with for many years. What you're starting to see now in
the UK is a lot more labels come to the UK. Maybe labels that you've never heard
of before. Now that's because people can see the importance of the UK market and
the UK is dominated by two major channels. One is the retail channel and
the other is the on trade channel - hotels and restaurants etc. So it's getting a
balance right between your distribution in both of those channels. But actually
the UK, we consume a lot of champagne we consume it sensibly and it is a very,
very key market. For us as an organization it's our first export
market.
If you look at population numbers, which are relatively similar between France and the UK
the volume of champagne that's consumed in France is about 130 to 140 million
bottles so what that tells you instantly is that actually a lot of people in
France have been brought up with champagne. It's
not such a celebratory drink actually, it's a lot more, I'm going to use the term
'everyday' and I mean that in the nicest possible way, it's not something that's
just drunk for pure celebrations and there are thousands of different labels
available in France, so people do have a much broader choice and much wider array
of different flavours.
So the problem, as we address it, is the marketplace is dominated by some very
large international organizations. We had to ask ourselves what was our genuine
point of difference between ourselves and those other brands and the reality
is that we do have a genuine point of difference. That took us about six months
to really identify. We needed to unpick the brand, understand the DNA of
Lanson as an organization. We ended up with a number of veins of gold which
gave us a true compelling story. The challenge that we faced was this
methodology and what gave us this point of difference is a term called non-malolactic
fermentation. That is not a particular user friendly style of
language to explain why we're different. What we had to do is identify what this
methodology was. Since 1760 Lanson has produced the champagne in the same way.
We have never changed. We've been consistent with that. There are only a
number of other houses who still produce the champagne in that method. This method,
which is unique, is the process whereby you stop the malic acid
converting into lactic acid. Malic acid is what you get in a green apple,
lactic acid is what you get in milk. We delay that process by happening
by chilling our champagne, our grape juice, the first pressing as it were, down
to stop the two acidities coming together. What does that fundamentally
mean? It means it takes us twice as long to make, it costs twice as much to make
and it means you have a unique flavor profile. That unique flavor is and has
been scientifically proven to be a perfect aperitif champagne. We have
researched that with the Leatherhead Food Research University to prove that
there is a taste profile difference. So that's fine, we now understand why we're
different, we appreciate that the language is not very friendly, so what we
needed to do then is create a reason to take that to market and the reasoning is
around the aperitif moment. So Lanson is the world's perfect aperitif champagne
because it gets your palette ready for food. It will enliven a jaded palette
because of the freshness and the zestiness of the taste and that's why
people who love the style of wine we produce constantly come back to Lanson.
That and the marketing, the brand building that we've been doing for many
years, supporting the Lanson name. So it's a combination of both. We talk about
style and substance, not style over substance and that can also therefore be
translated into what's in the bottle, rather than the color of the label. So we
know the role that we play in the market and for our customers and they like the
style because of the mouth-watering, refreshing taste. That's the point of
difference that has an occasion led approach.
Predominantly it has been led through some very traditional methods of marketing. That's
been above the line campaigns, but our above the line campaigns have not been
purely lifestyle led. They've been about the positioning of the brand, the taste
message and the occasionality to share. We believe that it's a brand that can be
consumed with friends, it's a relaxed, it's an informal moment, not just those
pure celebratory moments because lifestyle is a very dangerous word, as is
luxury, it means different things to different people
and to us it's about sharing a Lanson moment with friends and that could be
anywhere. Weddings, birthdays or even the fact it's
a Thursday night and you're getting close to the weekend. So it's the perfect
start to us and it's actually owning a message which resonates with customers
globally, actually. It's the perfect start to a night in, it's the perfect start to a
night out, for example, or a wedding etc. And that's based on a product truth, so
everything actually lines up and the fact of the matter is it's a genuine
point. It doesn't matter how good the language, is if the taste doesn't
actually deliver what we say. So actually for us it's all about how that taste
profile comes across to people. So there is a core brand strategy in a message
that we've executed in the UK. In the UK we've also linked up with things like
Wimbledon, so since 1977 we've been affiliated with probably the world's
best tennis event. Now what that does for us, it enables us to get our brand in
front of a very broad and mainstream audience. At the same point, Wimbledon is
an international brand in itself, so there has been some
sponsorship opportunities that we've been able to bring to life, but we like
to say they're sponsorships with intent because actually we can bring the
Wimbledon message with champagne and strawberries and Lanson specifically
on a global scale, because it's transferable. It's why we can't go and
sponsor everything because we like the events for example. The events have to
have a reason to exist and for us it's about the tasting message. So everything
comes back to the taste. It's not just about affiliation because somebody's a
superstar or a supermodel. I think that's fine if that's your approach. Our
approach is to be more authentic and talk about inside the bottle.
It comes back initially to say okay what role and what size and scale are we
going to be globally? What is our aspiration on a global level? And
also the cost of entry into each of these markets. There are certain markets
that are easier to break into and other markets which are really
challenging. China, for example, is a very challenging market to get into. To do it,
it takes time you've got to get it right. We will take the view of do we own and
set up our own subsidiary model, or do we work with an importer / agency model?
That ultimately means we will work with an existing route to market operation,
somebody who already has a number of other brands that would actually
therefore represent our brand in that market. Now both of them have benefits
and disadvantages to be honest. If you have your own subsidiary model, the cost
of entry is exceptionally high and you've got to have your own people in the
market place, so that takes longer and it is more time consuming. We did that with
the US about three and a half years ago and it was the right model for that
market because of the scale of the US market. Some smaller markets, for example,
you're better off having an importer strategy because they've got the
infrastructure in place, they've got the route to market secured, they've got
their client base already. Now that does come with some disadvantages in the
sense that you must have in-market presence. You must have your own people
in the market to support the distributor. Otherwise your message can get diluted
two or three times over before it even hits the customer or the consumer, so
there are pros and cons to both. It does come down to the appetite of the
organization and what its long-term vision is for volume aspirations and
market share aspirations.
It takes a lot of time and you've got to understand the market number one. Data
and consumer insight is vital because it's understanding how people are
consuming your category in the first place. You then identify where are the
opportunities and are there future trends that you need to get involved in?
It fundamentally comes down to having a point of difference. You either try and
outspend them from an advertising and sponsorship point of view. One idea. The
other one, which we've taken, is to focus on the quality of what you're producing
and you focus on the points of difference. When you have a brand that
has a genuine point of difference, you need to extrapolate that from the brand
and bring it to life to the marketplace. What that normally means is that
advertising comes second, you get in-trade marketing done properly,
i.e. for us it will be focusing on tastings, experiential campaigns, it's
getting people to taste the difference and why there are taste differences
within the category of champagne. One of the biggest brands or biggest branded
organisations will focus less, or they choose to focus less, on taste and more
on lifestyle. That's fine, to an extent, but when you're coming in you've got to
know why you have that point of genuine difference and to be fair it cannot just
be the fact that you focus more on quality and provenance because everybody
can say that. It's actually taking it down to a real basic common denominator
and in our case it's about the taste message. In hotels and restaurants
where there's more engagement with the consumer and the customer, if makes
sense, i.e. the operator, the restaurant, they want to talk about the brands and they
want to talk about stories, so actually this is where the benefits of storytelling
comes to life. Storytelling is really great as long as what you're giving the
customer at the end of the day has a genuine taste difference. So really we
know exactly the role we play, we know how to bring it to life. It takes a long
time and you've got to do it almost outlet by outlet level. There are things
like influence the influence of programs that you pull together and an example we
once did, what we call the 'great taste debate',
where we got some very influential people in a particular market with some
key journalists and we did a great tasting and that was all about
understanding the differences in these wines, for example. That was then executed
with a trade publication, so we've got the trade to understand us first and
then you bring it to life from a consumer position, which is around what's
the perfect aperitif style to be drinking? So I don't think there is any
shortcut to that answer. It's very hard work and it takes time.
The future for the brand is to be the world's perfect aperitif champagne.
That's the positioning. We've made it for 255 years in the same way. We have a
mouth-watering, refreshing style that doesn't change. It is consistently
award-winning and it is the perfect start to your
champagne moment.