When François Van Aal assumed the role of Champagne Lanson President in January 2019, he set about planning the heady celebrations due to take place in 2020 when the venerable Maison would mark its 260th anniversary.
Simultaneously, he led an ambitious repositioning of global distribution and of the Lanson range, while crafting new branding and a refreshed marketing approach. All was set fair.
But 2020 has turned out to be anything but a celebratory year for Lanson or any other Champagne house as the COVID-19 pandemic has raged across the world.
The Moodie Davitt Report Founder & Chairman Martin Moodie caught up with Van Aal to see how he and Lanson had reacted to a trading and consumer climate that ranks up there with the worst crises to have hit the Champagne sector.
1760-2020. A period that has straddled four separate centuries, spanned world and regional wars, numerous defining moments in history, and now in 2020 a global pandemic. Not the way you would want to celebrate such an auspicious landmark as your 260th anniversary. But that has been the reality for Champagne Lanson as the fizz and festivities threatened to go flat in the wake of plummeting global sales throughout the Champagne industry.
For Champagne Lanson President François Van Aal it has been a year of immense challenges but one from which he insists the Maison will emerge stronger.
“We are one of the oldest Champagne brands, and 2020 was indeed going to be a very important year for Lanson – our 260thanniversary,” he says. “We spent the whole of last year preparing for this milestone, under the name known internally as ‘L2020’. The first step of our repositioning strategy – known as our ‘conquest plan’ – saw a fine-tuning of our distribution network, splitting it into five regions. Namely, France, the UK, rest of Europe, North America and the fifth one, which is other exports to Asia, Oceania etc.
“The second step was to narrow down our range from 15 cuvées to ten, to make it simpler to understand for consumers. We wanted to move away from the off trade image that Lanson has built over the last few decades and into the premium Champagne territory. We wanted to position the range more towards the connoisseur, the gastronomy, the restaurants, the on trade – that’s where you build a brand. So we created three tiers for the products, starting with the core range, moving up to Rare and Exceptional and Cuvee de Prestige at the head of the range.”
Lanson also used the anniversary opportunity to fine tune the packaging proposition, making the range more coherent and giving greater visibility to the brand’s key UK Royal Warrant status. “We got it during the reign of Queen Victoria in 1900, making us the first Champagne house to achieve this honour,” Van Aal points out. “So we have put it as a really premium feature on the bottle, together with the year of founding, 1760.”
While the new range entered the market around three months ago, the planned marketing investment to accompany it has not been fully unleashed due to the pandemic. While Van Aal knows that Lanson cannot compete with the spending power of industry leader LVMH (Moët & Chandon, Dom Pérignon, Veuve Clicquot, Krug, Ruinart and Mercier) and Lanson is a “challenger” in the market, he also believes wholeheartedly in the need for serious market investment.
“Even though we have a relatively small share of the pie, we still need to put our name forward,” he says. “So we had been planning to spend an increased amount this year to promote ourselves not only in domestic markets but also travel retail.”
And then a mysterious virus that lead to pneumonia-like symptoms emerged from the Chinese city of Wuhan. Before long it had a name, COVID-19, that will come to encapsulate this year for generations to come. The impact on Lanson, like all Champagne houses, has been dramatic.
“When COVID hit mid-March, we cut back a lot of our planned investments for the second half of 2020, in order to protect the bottom line. We are holding it back a little towards 2021, or when times are better. It wouldn’t make sense to spend millions of Euros on marketing when consumers don’t have a chance to see the brand.”
[The 2020 campaign, ‘It’s all about love’ (see panel below) focuses on core values of Lanson, including kindness and humility, welcome messages in a year that has brought so much darkness]
The pandemic has led to some testy relations between growers, negociants and the houses in setting the guidelines for the 2020 harvest, though a rapprochement was eventually reached in August. “We cannot talk about Champagne and ignore what’s been happening in the supply chain,” Van Aal notes. “There were a lot of debates and discussion and brainstorming between on one side, the big international Champagne houses, and on the other, the smaller growers. There are thousands of families who have a few acres or a few hectares of vineyards, from which they sell to the Champagne houses, as is the case with Lanson.
“With Lanson we have about 500 hectares of supply. We own 10% of our supply, about 50 hectares, and we buy from families all across the Champagne region – about 450 hectares – so we depend on them.”
In fact it’s very much an interdependence, one that sees the Champagne houses mutually agreeing the harvest levels in June or July. “They agree what will be the next harvest – how many kilograms of grapes you are allowed to harvest per hectare. So historically, it’s around 10,000 kilos-plus per hectare. For example in 2019, it was 10,200 kilos per hectare.”
This year’s discussions were “very tense and very difficult”, admits Van Aal. “Clearly, the worst thing that can happen for the Champagne industry would be to have too much stock. And if you have too much stock, there’s a tendency to try to get rid of it, driving down prices.”
That in turn sparks a self-defeating downward spiral, he says, as off trade retail prices in key markets such as the Australia, France, Japan, the UK and US plummet, undermining years of work in raising consumer appreciation of Champagne and its specifics compared to other sparkling wines.
“So it was very important to protect pricing by monitoring the stock as best we could. In Champagne, the stock is 1.4 billion bottles. That’s about five years of stock, which is huge,” Van Aal complains.
“We couldn’t afford to add more wine into our cellars than what we ship. So the decision, after many back and forth meetings, was taken only at the end of August to bring it down to 8,000 kilos per hectare.”
The big question is how Champagne shipments will end up in 2020. Over the last decade, they have reached around 300 million bottles per year; for 2019 it was roughly 290 million. The resultant maths become critical to the fortunes of the whole sector. “If we go down to, say, 200 million bottles in 2020 – to be precise 202 million bottles – that means 7,000 kilos per hectare. If we go down to 230 million, that’s 8,000 kilos per hectare,” says Van Aal.
“To the end of August, the overall Champagne market is down about -28%. The industry and a lot of the big players are hoping for a better second half of the year. As you know, 40% of the Champagne shipments happen in the last quarter because of Christmas and New Year’s Eve and so on. So to have a successful last quarter could partly offset what happened earlier.”
The big ten houses, including Lanson, predict an approximate -20% year-on-year downturn for 2020. Usually that would be considered a disaster, says Van Aal with a wry smile (“Normally, if I told my boss before the start of the year, ‘We will do -20% this year,’ I would be fired!”). But in the context of what has happened, it actually could have been a lot worse. “And if, as mentioned, the supply of grapes is -20%, we can regulate this crisis, and look forward to better years, perhaps as soon as 2021, who knows?”
Who knows indeed? For now, it’s very much a matter of controlling the controllables – grape supply, marketing, and others – and waiting it out. “If we buy less grapes in 2020 versus 2019, that helps to control costs; it protects our bottom line a lot and we are able to maintain employment.”
In the middle of a hurricane
No channel has been harder hit than travel retail, its historic resilience in the face of crisis rendered virtually impotent by the sustained and geographically spread ferocity of the pandemic. Again, the timing was deeply unfortunate for Lanson which had signalled its determination to reinvigorate its presence in the channel by returning to TFWA World Exhibition in Cannes in 2019.
Van Aal knows the travel retail business as well as any leader of a Champagne house, having spent six years as Duty Free Director at Rémy-Cointreau/Maxxium to 2008 before moving on to successive Americas and Europe, Middle East and Africa Regional Director roles with Rémy-Cointreau. He has seen plenty of crises (SARS, the second Gulf War, the Asian economic malaise) but nothing like this.
“To the end of August, Lanson is -65% year-on-year in the channel, so almost two thirds of the business lost,” Van Aal reflects. “Clearly, it’s a major concern, a major hit. But it is the same not only for our competitors in the Champagne industry, but also in the liquor and wine industry in general, as well as perfume & cosmetics and other categories. We know our friends at Heinemann, Dufry, Lagardère and other retailers have been suffering big time.
“So we are in the middle of the storm – a hurricane if you like – as far as travel retail is concerned, and it’s important that the Trinity works together: the landlords, the suppliers and the operators. You could do stupid things by adopting short-term thinking. More than ever, I think it’s important to keep a cool head in what is the most turbulent period we have ever seen in travel retail.”
Again, Van Aal warns against the soft temptation of simply slashing prices to drive volume in the face of reduced passenger density. “To say, ‘We need to keep the momentum so the only thing we can work on is price, price, price’ is an easy thing to jump into. It might help with turnover in the short term, but it is not the answer.
“If you do that there is a knock-on effect to the domestic market… and we are hurting the image of our brands. Our domestic retail friends will say, ‘Hey, if you can do that with travel retail, why not with us?
“The travel retail channel has succeeded for decades, right from the opening of the first duty free store in Shannon, Ireland, so we must stay focused on that bigger picture. At the start of the symposium in Cannes every year, we hear about the industry’s double-digit growth and how the world is opening up, it is a €70 billion industry and so on.
“We should not forget these incredible times; 50 years ago it just could not be foreseen how well this industry was going to do. There are premium, targeted consumers going to the airport; they will come back, and we want to be there.
“Together with the travel retailers, we need to keep the communication clear; we need to keep working on the shopping experience, on the quality of the assortment, on the messages, on the promotion, on the tastings, on consumer value-oriented activities, rather than only focus on pricing.”
What does his crystal ball look like for the channel? “As we have seen through this year, it is so difficult to predict what’s going to happen,” Van Aal replies. “But I do have a positive vision for the future. The travel retail industry has gone through so many tough times before… and the good news is that it is always the industry that recovers the most in the long term.
“So that’s a message of optimism – when a vaccine comes and people are able to travel again more easily, the first thing they will want to do is reconnect, travel, see their family and friends and go on vacation outside their home country. And with that, travel retail will come back as certainly and as strong as it was before.”
As a frank, fascinating and humane conversation, conducted in archetypal 2020-style by Zoom, draws to a close, I ask Van Aal if he has a single message for the industry. “We have talked about the positioning of Lanson today, and I think that one positive thing from this crisis is the need for people to connect, to talk, be reassured, be close with friends, families – all those human aspects,” he responds.
“And, by definition, the travel industry is about getting people together. When we are able to reconnect again, I really believe that the recovery of travel retail will be as strong and fast as when it went down earlier this year.
“It’s a lot about perception; there is a barrier to travel at the moment, because many people are scared to travel. Once this is released from travellers’ minds, I think they will want to travel more than ever, and they will consume and buy products.
“So my message to everyone in this industry is to keep your heads up, think long term and don’t forget that we had more than 50 years of incredibly successful profitable value created from the growth of travel retail. That is not going to come to an end. At Lanson, like many other luxury brands, we are still keen to invest behind this industry, which we see as a fantastic window to the world. This is rooted in our mind and in our blood.” And in 260 years of history.
| New campaign sees Lanson in good hands Champagne Lanson began the celebrations for its 260th anniversary this year with new branding and a refreshed campaign centred on the slogan ‘It’s all about love’. The campaign focuses on the core values of Lanson – openness, kindness, humility, authenticity, elegance and quality. The first visual (below) features Maison Lanson Winemaker Hervé Dantan’s hands cradling a bottle of Lanson Black Label Brut as if it were an infant. It’s an evocative symbolisation of the hands-on, loving almost parental craft that goes into each bottle, the sense of ‘family’ within the Maison, and the intrinsically delicate nature of the product.
Future creatives will feature further Lanson Champagnes and other people involved with the company. Champagne Lanson President François Van Aal talked to Martin Moodie about the campaign’s inspirations and execution. The new campaign expresses important and very relevant values in this year of such darkness, values including kindness and humanity. I love the visual of Hervé Dantan cradling a Lanson bottle. Tell us how that came about. We were looking for a single message about the Lanson brand that would resonate with consumers across the world and across different cultures while also promoting the authenticity of the brand. We wanted to distance ourselves from the ‘bling’ messages you normally see associated with luxury product advertising. You know, the ‘I have money look at me’ type of marketing speech. That is not the way we wanted to go. More and more people, and even more the younger generations, are opting for brands with ethical values – companies which have an eye on protecting the planet. We are not saying we are going to change the world – it would be arrogant and totally disrespectful to say that. But we’re saying that at our own level – whether it’s our 150 employees, or our subsidiaries, or our final clients, or all the salespeople working for Lanson – that if we have this sense of good values, we are spreading a little message of peace and love. Especially in this world of pandemic, what other message fits better across different cultures that love is everything? Love of family, love of friends, and so on. The image of the winemaker presenting the Lanson bottle, cradling it in his hands, matches this message. It shows the love of the product from the winemaker, and from the suppliers that have been working with us for four generations supplying grapes for Lanson Champagne.  It also shows the love of our cellar master for achieving the best quality. In this image, the consumer is presented with Lanson as the hero of the campaign, held in the winemaker’s hands. It’s a little bit like a newborn baby being presented to his or her mother. This meaning is important because more than ever the world needs caring. It doesn’t need arrogance, and we are trying to pass on this message. The second meaning is that when you meet with friends and family you want to have a good time together. In doing so, you bring love with the Champagne, because Champagne is all about bringing people together in celebration. It means a lot for me to hear that this campaign talks to you, and that you enjoy the visual, the positioning of being very realistic and down to earth and humble. The campaign is also disruptive. That’s because very often you see Champagne advertised with visuals showing people having fun in expensive surroundings. But with our campaign, the bottle is the centre of the communication and the disruptive element is that the bottle is not vertical, it is horizontal, presented from the hands of the winemaker. |
