With Champagne prices rising, demand continuing and supply at its limit, Allied Domecq has picked the perfect time to relaunch its Mumm brand to the market. Chris Brook-Carter talks to Vincent Gillet, the company's top Champagne man in the UK about seizing the moment and resurrecting a struggling brand to past glories.

The collapse of the Seagram drinks empire at the beginning of the decade certainly left its mark on the industry. As with all such events there were winners and losers. Among the winners were a number of cash happy Seagram shareholders. Among the losers - for a time at least - were some of the great drinks brands in the company's portfolio that were poorly neglected as Seagram lost focus and direction towards the end of its life.

From an outsider's point if view, it has been a satisfying experience over the last four years to watch the new owners of these brands slowly but surely rebuild the equity of names such as Martell and Chivas Regal in the spirits world - both of which belong to Pernod Ricard now - and Mumm and Perrier Jouet Champagnes, among the wines, now in the Allied Domecq stable.

Allied acquired the two Champagne brands in December 2000 from Hicks, Muse, Tate & Furst and a small number of minority shareholders.

However, they had been within the Seagram distribution portfolio for a number of years. Just as Pernod Ricard experienced with Chivas and Martell, Allied found itself with two brands that required a large amount of TLC in order to regain former glories.

It has taken the best part of half a decade, but this month Allied Domecq, through its UK wines division, was finally in a position to unveil plans for an ambitious global overhaul of the Mumm brand.

A large part of the equation has been the success cellar master Domonique Demarville has had in improving the quality of the wine - a success reflected in the positive coverage Mumm has been receiving of late in the consumer press.

But Mumm's problems ran much deeper than wine quality. The brand itself, once one of the most iconic brands in the wine industry, had lost its way.

"Mumm lost equity in the 1980s and 1990s," says Vincent Gillet, Allied's UK country manager for Champagnes. "Seagram lost some interest and there were problems with quality."

He adds: "This brand was at its height in the early-90s and for the 40-plus generation it is a very well known entity, but people in their mid-20s to -30s don't really relate to Mumm that much."

At the heart of the problem was pricing. In spring 2001, just-drinks reported that a bottle of Mumm non-vintage could be bought in Asda for the knockdown price of £12.49 ($18.05), a £7 reduction from its usual £19.49 ($28.17) rrp at the time.

"We have been suffering from low pricing," admits Gillett. "It wasn't just Mumm. In 270 years, the first time Champagne was properly discounted was January 2000. Allied was trying to put the brand back on the retail map but it was bad timing and we got caught in the downward spiral. As with all brands we got caught as a footfall driver."

As with all good business, timing is everything and the figures suggest Allied's timing for this re-launch couldn't be better, with global Champagne sales getting increasingly closer to the region's production ceiling.

"We are getting to the point where demand equals supply and anything beyond that demand will outstrip supply," says Gillet.

In short, growth in the industry cannot - in the short term at least - come from volume gains. It must therefore come from price increases and from consumers trading up.

"Clearly at the price points we were at, we weren't perceived as a luxury Champagne player and that's what we needed to address," says Gillet. The result is that Mumm's pricing had risen 8% in the MAT totals to December last year against an industry average of 5.5%, making Mumm comparable in price to rivals such as Laurent Perrier.

"And we are going to put through price increases in the foreseeable future, given the supply and demand issue," adds Gillet. "This is the right time to make this happen. Value is increasing above volume. If we had started in 2000, clearly it would have been a disaster."

There is more work needed, however, if Mumm is to reconnect with that lost generation of 20- to 30-somethings that Gillet is keen to re-engage.

Since Allied acquired the brand, the focus in the UK market for Mumm has been on building the right off-trade distribution. Gillet now wants to focus on developing the on-trade, particularly the top end for the premium styles.

"We reviewed our channel strategy. We have lost some grocers as customers but not ones we were desperate to play with. And that means we need to build our on-trade capacity," says Gillet.

His plans are to see Mumm in a 55/45 split between the on- and off-trade. "We are not taking business away from the off-trade, we intend to keep growing that, it's just we want to grow the on-trade faster. The beauty of the on-trade is that you can generate good volume without discount."

All this change in pricing and distribution has required an overhaul of the Mumm proposition. "This has required a complete review of our existing proposition and we will unveil a new look for the entire range in the summer, to coincide with the launch of a premium cuvee which will be in the market in the autumn," Gillet explains.

Mumm has suffered from a lack of premium focus - the standard Cordon Rouge brand makes up 97% of total Mumm sales and consumer testing continues to deliver feedback that suggests a lack of luxury feel to the brand.

The new packaging and launches of a Mumm Grand Cru and Mumm Prestige Cuvee, as well as more activity in the rosé market, over the next two years are an attempt to address that.

"The premium range represents 3% of our volumes at present, our ambitions are to take that to 13% over five years," says Gillet.

The company has even employed a French historian to help address a perceived lack of heritage among consumers of the Mumm Champagne house. "History. Every house needs a history. We have never really substantiated the story and consumers are telling us we are lacking heritage," says Gillet.

Combining this with an extensive below-the-line advertising campaign and by partnering with the likes of yachtswomen Ellen Macarthur and adventurer Bear Grylls, Mumm finally hopes to carve out a strong brand identity (the Champagne with a taste for discovery, Gillet calls it) in the market.

The new brand identity and packaging are to be rolled out across the globe, but as Champagne's key market, the company will be watching the UK most keenly and in particular the reaction of customers to its new pricing strategy.

"I am clear that our success also depends on our partnerships with our on- and off-trade customers and our ability to push through a value strategy in the market. As part of this, we will be resisting all customer demands for heavy discounting moving forwards," says Gillet. Bold words, but if there was ever a time for them, it's now.