The economies of Europe rely in no small measure on building luxury brands and selling the products to the better off of the world.
The brand of champagne is one of the oldest and most famous of these products.We can learn from the French success at building this brand. It is a way for relatively affluent French workers to maintain their living standards in a very competitive and tough world.
The brilliance of the brand and the marketing is obvious. The product is defined by association with success, happiness and life’s landmarks. Most want or aspire to a champagne wedding, a champagne moment in sport, a glass on graduating, a taste at landmark birthdays. This wine gets ample free publicity every time someone wins a grand prix or a test match. No-one suggests putting the champagne on ice for a funeral, or to drown sorrows if you have just failed your exam or lost the race. Champagne, by ruthless control of the settings and the brand values, has achieved the ad man’s dream of only good associations.
They have also achieved the use of the word for something more than just a product description. A “champagne moment” is not literally one where you sip champagne whilst taking the perfect cricket catch or scoring the best goal. The champagne lifestyle is more than affording a bottle of bubbles on saturday night.
The brand is sustained by strict controls. No-one outside a specified area of France is allowed to make a champagne, though there are plenty of winemakers elsewhere in the world who can make great bubbly wines, and can use similar techniques to the French. Controlling the use of the name keeps the wine scarce and keeps prices high.
The high prices are buttressed by draconian controls in champagne country itself. Only designated fields can grow champagne grapes, and the wine can only be made from three controlled varieties. Other fields adjacent to the vineyard, with similar soil and same aspects, are not permitted for crop expansion. The premier cru wine has to be made from just a few designated special village areas. No other grape will do, however good the alternative grape might be.
Talk to the believers in champagne and they will tell you it has to stay this restricted. The “magic” comes from the scarcity. Others outside might say that as the world is producing so many more better off people who want their own champagne moments, maybe they could expand the vineyards and increase the output more rapidly without damaging the brand and the prices. After all, Germany has mass produced luxury cars under the Mercedes and BMW labels and got away with it. They are still thought to be luxury or special by many people, even though there are so many of them now.
If Europeans want to keep up their high living standards in a world where many more countries are working smarter and harder, Europe will need more of these great brands. Europeans also need to know how and when to stretch the brands, so they keep their magic but serve many more people. French winemakers underestimated the excellence of their Californian competitors in the second half of the last century, only to be forced to recognise their quality and excellence in the end.
June 17, 2013
Well it would appear that in wine-making, at least – excellence beats ‘equality and diversity’ hands down.
June 17, 2013
If it is well chilled, bubbly and the right level of dryness almost no one can taste much difference, in my experience. You can even mix it from white wine, fizzy water and vodka with out anyone noticing, try some blind tastings if you do not believe me.
But few want to be seen to be serving cheaper alternatives at their party or wedding. Just as they do not want to be seen driving cheaper brands of cars.
I am constantly amazed by what people will pay for handbags, clothes, cosmetics, perfumes, even vacuum cleaners, cars, drinks, and the like just for the sake of perceived image. I tend to assume they need to make up for some personal, sexual or other insecurity or general lack of confidence.
Now what new cash cow brand can I create for my next new business?
Mind you, once you have a valuable brand it is best not to trash it. So why have Cameron, Major and Heath remorselessly (and perhaps now now terminally) done this to the conservative brand by their EU and tax ratting and big state socialism?
June 17, 2013
You are probably right about the needs of some people to always have the latest gadget or brand which is not always cost effective. Although there are some things where it is worth paying more in the long run for endurance and better performance….
Champagne is OK but I personally prefer prosecco…..
zorro
June 17, 2013
Creators and suppliers of successful brands will have very clear views about the psychological makeup of the people they target as customers. From your comment, you fall into the one third of the population that is unimpressed by branding – unless, of course, it is a brand that focuses on value for money. The supermarkets push these for parts of their own brand ranges.
They also offer premium brands – Tesco Finest is an example. These are targeted at the two thirds of the population that either wants to show off in some way or feels they deserve an extra reward for themselves using the money they have earned.
Successful brands are not necessarily expensive. But I have no doubt that European businesses are more likely to achieve sustainable success with brands that appeal to the newly affluent around the world and which can command a premium price.
Reply a brand like Tesco finest can have genuine brand values concerning quality and value that people buy for good reasons.I am not against branding, but I do wish to see quality and value as well as reputation and image.
June 17, 2013
Without a Conservative party then there is no opposition to the main principles of the EU socialist superstate. If this was their plan they have at last succeeded. Some polls show there is a preference for Cameron to Miliband then it is considered people will vote for him. In my view this is an absurd analysis. Step forward Mr Farage there is a void to fill. Most people I speak to have changed from giving Cameron a chance to loathing him.
June 17, 2013
More nonsense. The idea that cham-pag-nee and Champagne taste the same is clearly false. Though often the cheaper ones are quite respectable. The local wine merchant sold me an excellent one for £35 rolling his eyes at the mention of gangster favourites last Christmas and was drunk alongside a £10 Lidl one and a fiver bottle of fizzy plonk. No difference? I suppose all beers are the same too? Here’s the plan. We go to the pub and get wrecked.
June 18, 2013
Taste is actually mainly smell with wines (nose or perfume should you be pretentious) the main things that you notice in the mouth are temperature, sweetness, sourness, saltiness, bitterness, and umami. Most as I say cannot taste the difference and do not really care. Anyway taste fades with age so by the time you a 20 half your taste buds have gone. So by the time you can afford “the best” (whatever that is) you cannot tell the difference anyway.
In short it is main bought for conspicuous consumption or just to show off.
Perhaps one of the few good places for high taxes, then these dopes can show off even more.
June 18, 2013
Just as by the time you can finally afford the Ferrari, you are probably a bit old and portly and look rather silly climbing in to it.
June 18, 2013
Bazman ,
I rarely drink or serve champagne but on the odd occasions I would like it to be memorable .
I tried some once which was superb but promptly forgot the name .
Can you remember what type of Champagne impressed you please ?
June 17, 2013
I’m convinced Britain could do much more with its stilton cheese (and other cheeses) if it applied clever branding and marketing. Not as exclusive as a Rolls-Royce, but slightly more affordable. Whisky festivals on the continent are full of Scottish whisky (and some Irish whiskey), I’ve never seen any celebration of British cheeses.
June 17, 2013
You are so right! when I lived in Spain, I used to trade my Stilton for chorizos and illegal milk. The local Cabrales is nowhere near as good.
June 17, 2013
Petey, me old dutchy – what about your own cheese ? – the one that puts you in the ‘red’ ?!
June 18, 2013
@Robert Taggart: the red is only skin-deep, below that it is pure gold. Bon appetit! 🙂
June 18, 2013
Well, in 1982 we launched a blue cheese by the name of Lymeswold, intended to solve the then balance of payments problem. The Germans did the same thing with Cambozola. Guess which won out? No prizes, I’m afraid. Why couldn’t we just have marketed Stilton? It’s a bit like the Eurovision Song Contest: you have to wonder whether our people are serious.
June 18, 2013
@Wireworm: at last year’s international cheese contest in Wisconsin (USA), a Dutch cheese named “Vermeer” was voted the best cheese in the world. When I looked into it, it appeared a clever marketing trick (new name + good lobbying) by a major Dutch exporter.
June 18, 2013
Lymeswold – the good only Milk Marketing Board, government failing to pick winners as usual. Just as with PV, wind, HS2, the green deal and the rest now.
June 17, 2013
Champagne is a brand only sustained by government decree and force. It would not be able to compete in a properly free market with no help from the law. Is that really an example of the sort of business we want to rely on to keep our economies afloat? BMW and Mercedes compete in free markets and succeed with out quotas or restrictions and are the model we should follow.
June 17, 2013
BMW and Mercedes DO NOT compete in free markets and succeed without quotas or restrictions, there are quotas on cars imported from Japan which is precisely why the Japanese car makers assemble cars in Europe to bypass those quotas. If the Japanese import quotas were removed all car production in Europe would be wiped out quickly.
June 17, 2013
They would go the same way as the British motorcycle industry.
June 17, 2013
I lusted after a British bike as a teenager and fulfilled the dream at the age of 18 – a Norton 850 Commando Interstate that lurked in a neighbouring backyard for a year or two. Out with the reliable but boring Honda and in with the brooding black beast that looked and sounded the part. No effete electric starter on this model!
It was a heap of junk but for the two years that I owned it, and when it was running, it was enormous fun and the engine had wonderful “pulling” power. In retrospect, the quality was poor and the marque was trading on past glories. It was the final gasp in the death throes of our, once dominant, motorcycle industry. A flawed blend of old wines in a new bottle.
June 17, 2013
Er, not quite the case. Triumph UK has for the past several years been successful and, having been rescued, makes desirable ‘bikes that sell very well….
June 17, 2013
New motorcycle sales in the UK cannot be worth very much in total .
On the other hand there are a lot of British people who seem to think a BMW is a exciting .
They certainly seem to attract a lot of late twenty somethings who are rapping on the door of middle age begging to be let in .
Not exactly rock and roll is it .
(comment deleted ed)
Wouldn’t say no to a ride on an R90S though .
June 18, 2013
You comment would have been right 40 years ago.
Haven’t you heard of the current success story that is Triumph Motorcycles based in Hinkley ?
Forget Tony Benn’s pathetic attempt to start a socialist collective in Meriden :
Today’s Triumph Motorcycles Limited is a 100% privately owned company. The parent company is called Bloor Holdings Limited and is owned by John Bloor who started it from scratch.
Last year they produced almost 50,000 superb, high value big bikes and now have 750 dealers in 35 countries.
There are now five factories and 80% of production is sold outside the UK.
With a good brand and excellent products it can be done without subsidy or protection.
The wine industry is a perfect example of France’s decline :
I’ve just returned from my house in France where restrictive practices abound where ever you look.
In Tulle you cannot get a French heating engineer to service your boiler. Ringing round was entirely unproductive and, exasperated, I went into one firm’s office which had been recommended by a Dutch estate agent I know.
They looked up our address in an old fashioned rolladex and as we weren’t on their list they wouldn’t take us on as a customer !
Can you imagine that happening in the UK ?
It’s the same with pretty much everything : if it’s broke you either have to fix it yourself with spares bought from England or Germany or, if they feel like it, the French will be prepared to sell you a new one at a price that can’t compete with one from outside the country.
Fortunately for the few jobs we can’t do ourselves, there is a quiet network of Brits who will do an excellent job and fix things at reasonable cost but most Brits I know don’t ever bother to ask the French.
Lack of competition means that services like telephone and broadband are 25% more expensive than in the UK and often unreliable.
Wonderful country but with very few exceptions they have no concept of Customer Service.
Unless they change their ways drastically they will never be able compete with German or UK businesses and they certainly won’t be able to remain in the Eurozone in the long term.
June 17, 2013
Champagne is a brand only sustained by government decree and force.
Just like everything else that’s been copyrighted.
June 18, 2013
Nowhere does that apply more than our fiat currency .
June 17, 2013
As observed, we have some world beating produce such as stilton. Our engineers can manfacture world class products for many applications. We should do everything we can to support those brands which rely on quality and performance and not just consumer froth.
June 17, 2013
Enforced brand protection is part of the corporatist problem. ‘Champagne’ is a generic word for a process of putting fizz into wine. It would never have taken off but that the British loved it and sent their beer bottles to France so that they could withstand the pressure.
The idea of a specific region for producing a product that can be replicated anywhere in the world is all part of the zombie capitalist plan – keep prices high – restrict supply, make more money – screw the customer!
June 17, 2013
What about all our different types of apples which we used to see, probably the wrong size and colour to be EU compliant….?
zorro
June 18, 2013
Not the EU . Just commercial pressures .
The producers want small trees which are cheap to prune which produce heavily reliably every year . Some older varieties only produce every 2 years .
The supermarkets want varieties with a long shelf life .
Worth supporting local niche growers (a commercial name supplied ed)
June 17, 2013
Capitalist?
French / EU more like? And they are not capitalist.
June 17, 2013
I think you will find there are plenty of brands and not just in France that move heaven and earth (well their expensive lawyers) to protect their product.
Designer labels, fast food chains etc come to mind. Whether one can be too protective is of course always possible.
The French (or whoever really controls the brand!) could maybe add more brands under the Champagne name.
Scotch Whisky does this. The new product has too meet the brand owner criteria/permissions to allow itself to be called Scotch Whisky.
Some German beers have a Purity Law of 1516 that helps protect their quality/brand.
Some find the Italian competitor to Champagne just as good if not better.
I generally agree with the laws that protect brand names.
June 17, 2013
“I think you will find there are plenty of brands and not just in France that move heaven and earth (well their expensive lawyers) to protect their product”.
Yes, pharmaceutical companies do it all the time, and a good thing too.
June 17, 2013
If I were lucky enough to be a Champagne maker I would also keep supply tight.
The brand is for the most part a way for consumers to show off their conspicuous consumption. Quality is necessary to maintain the brand image, but value for money or competing on price are not.
Leaving the brand image aside, most of us would be happier with a sweeter Italian fizzy. Alternatively good quality English alternatives are now available, including some from vineyards in the Thames Valley close to your constituency.
June 17, 2013
It sounds as if you have had a light headed weekend or have you just been watching Murray and the 2 bottles of Champagne for the finalists. I have forgotten the official measurement of the bottles they received. Perhaps someone ought to get Peter Jones on board, dragon extraordinaire, to gain more insight into luxury brands.
As for keeping prices high and the capitalist zombie plan , one could say that about any product which is out of the reach of someones pocket. If it is the taste people are after, I can get as good for a fiver , however if it is snob value , shouldn’t the rich be let alone to play their games of keeping up with the jones’ so we can all prosper?
June 17, 2013
Some fascinating numbers on the Best Global Brands site. Moet still tops the list but typical of the French, only one bottle in five gets out of France. Check the league tables for Brands of British Origin Top 50. http://brandirectory.com/ .
June 17, 2013
In Australia for just $10 I got a whole box of 4 litres of red ned. Delicious! To celebrate the birth of our grandson, we were given some local fizzy ($20) which is taking the place of Champagne at $70 a pop.
For people who really love good wine, Australia is a magnificent place to have a drink. (PS It is lousy for English beer though!|)
Cars? Rolls Royce? BMW went down market to become a family name.
You can buy a Maclaren push chair nowadays.
Moral: times change and manufacture has to keep up.
June 17, 2013
Was not Maclaren Pushchairs founded earlier by a design engineer in 1967 Owen Maclaren?
June 17, 2013
You forgot to mention ‘Champagne Socialists’ a brand of whom we have far too many.
June 17, 2013
Indeed, far too many in the Tory party alas.
June 17, 2013
Indeed. And the Champagne Socialists in the Labour Party are feted and worshipped by their grateful disciples in the BBC.
June 17, 2013
Champagne Socialists are in favour of socialism for the rich right?
June 17, 2013
In a large number of countries, Mercedes cars are not seen a luxury cars but are used widely as Taxis. Perhaps they also make claims of reliability and high mileage in those counties.
June 17, 2013
The old Mercedes 190s used to go round the clock 3 or 4 times as taxis.
Quite a few Volvo 240s have notched up heading for half a million miles too.
June 17, 2013
Generally Mercs sold into the European taxi market have rather different specs to those sold as “luxury” to private motorists here…
June 17, 2013
One situation where ‘Brand’ loyalty is problematic is when a well respected – nay legendary brand- is taken over. The Consumer of the post-takeover product may find that things have changed – and not for the better. “Previous quality is no guide to future quality” is an appropriate motto for this circumstance. I can think of several (once UK owned) companies in the niche Hi-Fi market to which this has happened.
June 17, 2013
Britain has carelessly allowed its world famous brands to fall into foreign ownership because nobody seemed to value them or understand how difficult it is to build up a good name from scratch. We took them for granted, the great names of my youth – MG, Leyland, Wedgwood, Harrods, Burberry, Glenfiddich, Cadburys, Raleigh, Atco, BAA – just an off the cuff random list but how carelessly we threw away our intellectual property for the sake of a quick buck.
I can’t think of any other country that would give away its heritage so easily without apparently a single influential voice raised against it. So much for the FT/ Economist’s relentless mantra that “‘it doesn’t matter who owns what”.
Time we made something of the Cheddar cheese that my cousins in Gascony are so desperate to get hold of !
June 18, 2013
The City of London doesn’t understand investment .
To them long term thinking and creating value or something tangible is an anathema .
Why should they care when they make their money from commission and fees ?
We are only starting to see the consequences of giving The City of London carte blanche for 4 decades . Now we’ve got a population without any savings for their old age saddled with debt .
It’s hardly surprising that London seems to do better than the rest of the country when the politicians insist on running the UK for the benefit of London .
June 18, 2013
Can anyone think of a more toxic brand than the City of London ?
Reaply The City brand is far from toxic, as we can see from the continuing high level of export sales it achieves.
June 17, 2013
A brand on it’s own , intellectual property, or ideas have low barriers to entry. A brand backed by complex manufacturing, advanced technology and high skills is worth more and harder to replace. Champagne is being replaced by fizzy wine all around the world. They don’t label it champagne but it is passed off as champagne. How many wedding toasts have cheap fizzy wine passed off as champagne ? How many motor vehicles are passed off as Mercedes ?
With the relative demise of our manufacturing industries we thought we could build an economy on intellectual capital and services. That is a fragile way to risk our future.
June 17, 2013
Alas, in order to own a ‘Roller’ – one will to be elected – in order to claim for it !
June 17, 2013
I fear that the “Champagne” brand owes more to mercantilism than its being an especially good product.
Is this really the kind of model we want our industries to follow?
June 17, 2013
Luxury brands always command a premium price, such as Rolls Royce limos.
Another interesting things about brands is that people consider well known brands to be superior quality simple because they’re well known. As a result people are more likely to go to branded fast food shops than independent ones.
June 17, 2013
‘ … more countries are working smarter and harder …’
Is that what we are doing? I’d say we are working longer and a lot more stupidly. I hear my neighbours leaving for work at any time from 5.30 in the morning onwards. Many of them do not return until early evening and, I know, often sit with a lap top on their knees in the evening – or, more commonly, retire to the study to ‘catch up on some emails’. Babies are dropped off at nursery to allow partners to work too. And parents endless juggle work and ‘the school run’.
The 37.5 hour week my Dad used to work – with Mum at home – looks like paradise by comparison.
Our principal requirements are food, shelter and energy. Strikes me the ONLY way we are going to improve living standards is to allow more people to grow their own food, build their own shelter and find ways to collectively invest in renewable energy.
Unfortunately, this will never happen as we have to be debt slaves to bankers – aided and abetted by politicians.
June 17, 2013
I took a tour of the Napa Valley in California during a break in a business trip and was surprised to discover that one of the vineyards I visited was French owned . They produced a “bubbly” the spitting image of champagne ; they explained they were not allowed to call it “champagne” ( for the reasons you have highlighted ) , however , they boasted it was the equal of a Premier Cru and sold for much less . I’ve tried to buy it back here , but , getting hold of any American wine has been difficult . In my book Chilean , Australian and South African reds outdo the Bordeauxs in price and quality , furthermore the New Zealand whites win every time over the (french-ed) .
June 17, 2013
I think it was an Englishman who first made the sparkling wine now called champagne. His secret was copied not long after by the monk Dom Perignon and of course the story is now part of a delicious history.
I have visited several champagne houses in Epernay, and their “Caves” were absolutely full of champagne quietly maturing in their black moss encrusted tunnels. Miles of tunnels full of bottles being turned and tested until they see the light of day and with luck a ride on our tongues. Lovely stuff.
June 17, 2013
I think this whole post from John brings up many trade barrier issues. Lots of stuff doesn’t make sense to me about the way the politicians have arranged things with other nations. It amazes me for instance that we import so many cars from India (Hyundai cars sold here are largely coming from India and Turkey) and yet India imposes a 100% tax on any European cars sold there, which genius politician negotiated that?
Or the way Indian nationals get to work here largely without restriction by (use ed) of the intra company transfer rules so that they can be subcontracted to anyone, yet (some ed)Brits find it (difficult ed) to get work visas to India? We have the fishing industry sold down the river by the politicians. And so on and so on. How exactly do the political class expect the UK to pay its way in the world?
June 18, 2013
Import taxes generally aren’t negotiated; they’ve imposed by one country on foreign products.
June 17, 2013
Has this post been prompted by your recent trip to France John ?
Yes the Champagne region is restricted in size, as is Cognac, both are controlled tightly.
There was talk some years ago (in France) about increasing the boundaries of both regions, and many adjacent fields were sold at hugely inflated prices, on simply hope value.
During our many holidays in France we have had guided tours of both of the above regions and the distillaries/manufacturing plants, we have also been guilty of purchasing both products from time -time, on a very, very limited basis for those special occasions you mention.
But.
Do a blind tasting with much cheaper sparkling plonk, and most people will not tell the difference.
I did exactly that at a birthday celebration last year without mentioning a word, just poured out the glasses of fizzy plonk in the kitchen, took the 16 glasses on a nice tray into our lounge and let people help themselves before giving a toast, result, many compliments on how nice it was.
Only later did I own up that the plonk was £0.99pence a bottle from a local German supermarket, which now I see has increased to £1.29 such is the demand in recent months.
As you say, its about brand marketing, limited supply, and association, add in the typical French idea of public protest to protect what they have got, and it is no wonder success can continue for such products, at least in the short term whilst many still have the disposable income to purchase such products.
The only change likely to the above is if austerity and value for money becomes more important than the so called wealthy image.
June 17, 2013
Mr redwood, may I remind you of Mme Bollinger’s remarks:
I drink champagne when I’m happy and when I’m sad. Sometimes I drink it when I’m alone. When I have company I consider it obligatory. I trifle with it if I’m not hungry and drink it when I am. Otherwise I never touch it – unless I’m thirsty. ~ Madame Lilly Bollinger
June 18, 2013
She still lived to 77 I note.
June 17, 2013
Just stop wasting Public money. Be more focused on helping the UK not just politicians and senior public sector leaders helping themselves.
June 17, 2013
as an example of man’s stupidity you could not have chosen more wisely young grasshopper but my favourite drink is a glass of ice cold milk.
June 17, 2013
Venician glass, English Pottery, French hand bags, English suits, German Cars, Italian cars, Spanish architecture, Dutch flowers, sherry from Andalucia, blue cheese from the Midlands to Italian parmesan. The list is endless of quality niche products produced by close proximity of varied nations.
They want to homoginise and standardise it all! No mad Van Gogh or Mondrain just regulated standardised. What they love they are destroying along with the revenues they depend on. A few months ago the Brussels bureaucrates striked in their European desginer coates and wear for more money.
Europe is niche quality products, not just Champers or F1. They wish to rid us of all of that through ignorance. I want the diverse Europe, the vibrant energetic and endless art and ideas Europe. That is one not rules by bureaucrates.
June 21, 2013
Many products have been given EU protected status, so how do you square that off with your rant? Do tell us or maybe you cannot?