The Wehring Interview - Societe Europeenne de Participations Industrielles Champagne CEO, Cécile Bonnefond - Part I
Cécile Bonnefond believes Piper Heidsieck still has a way to go to realise its potential
As his swansong earlier this month, we sent outgoing deputy editor Chris Mercer to meet the CEO of Societe Europeenne de Participations Industrielles' Champagne unit, Cécile Bonnefond. It says 'Wehring' above, but it's 'Mercer' below.
Cécile Bonnefond is a force to be reckoned with: charming, sharp and clearly not afraid to speak plainly. She's also relishing a return to Champagne, something she never considered possible after relinquishing the reins at Veuve Clicquot in 2009.
It's fitting, then, that Bonnefond is talking to me over lunch at the five-star St Pancras Renaissance Hotel in London. “If you'd told me 18 months ago I'd ever be back in Chamapgne, I'd have said never,” she says. “Tthere have been no sales of major Champagne houses for the last six years: For one to come up and not be bought by a corporation, and have someone who I happen to like to work with, the chances were nil.”
The Descours family, via its ownership of Societe Europeenne de Participations Industrielles (EPI), has proved her wrong. The family has wasted no time installing Bonnefond since acquiring Remy Cointreau's Champagne business, including Piper-Heidsieck and Charles Heidsieck brands, for EUR412m (US$593m) last year.
Cécile Bonnefond, CEO of EPI's Champagne division
If the move is a renaissance for Bonnefond, who is now CEO of the unit, then the same is at least partially true for the business. It's no secret that Champagne lay on the margins of Remy Cointreau's Cognac-coloured horizon. The Champagne arm has struggled to turn a profit, despite net sales of EUR103.6m in Remy's fiscal year to the end of March 2011.
Bonnefond is careful to praise Remy Cointreau's long-standing work to build up reserve Champagne stocks, at considerable cost. The group also remains EPI's global distributor. But, she is impressed with the Descours' interest. “[They] have been to Champagne in one year more than the previous shareholders in 25 years,” She adds: “I like to involve them as much as I can. It's their money, it's their investment and they like it.”
Flagship brand Piper-Heidsieck is the world's third largest Champagne brand by volume sales. “We're present almost everywhere,” Bonnefond observes, and yet she suggests that the label has been underselling itself. “This wine has been absolutely superb since 2005-06 and it's time for the public to know it,” she says. “It's not great by mystery or by chance, it's really hard work by [head winemaker] Regis Camus.”
Rather than a hard-hitting media campaign, it will be tastings, digital marketing and talking to the media that EPI will utilise for raising Piper Heidsieck's public profile. There will also be more gold. Of the two colours associated with Piper, Bonnefond thinks there has been too much red, too much brashness. “Everyone has an image of gold, like elegance, refinement, value,” she says. “We're going to bring back some classic, but not boring classic,” she says, verging on apologetic for getting “a bit conceptual”. She argues that gold gives Piper a connection with quality: “Show-off luxury is over. The importance of the product excellence is back.”
As the fizz flows over lunch, I delve into the question of targets for the business? “I'm very resilient,” jests Bonnefond, playing hard-to-get with the numbers. “I have targets that I fixed myself,” she says. Pressing on, I learn that she is not “volume driven” and will let volumes slide if it means protecting value. “It's not an ambition, but if that's what it takes.”
On net sales, she jokes that her English is a little patchy - translation: I'm not getting any figures. “The issue is rebuilding the brand, making sure consumer and trade appreciate the brand,” she says. On profitability, she adds: “We break even, so we don't have blood there. This is not the ambtion, but at the same time, [it means] we can do what we have to do.” She does confirm that the business is still working through job cuts initially announced by Remy Cointreau two years ago. It planned to reduce the 160-strong Champagne workforce by 45 and EPI has not veered from the path laid out.
Beyond the nitty gritty of figures, there are two further strands that emerge in Bonnefond's thinking. One is the weight that she attributes to the US market. “Frankly, the US would be to me today the biggest opportunity that we have,” she says. (There'll be more on growth markets for Champagne in part two of this interview)
The second strand is Bonnefond's desire to change consumer attitudes to Champagne, particularly for the sector's largest export market, the UK. Discounting in the key Christmas period continues to burst Champagne's bubbles. “Everyone lowers the price in the peak season, and, frankly, it's the only industry where I see that. Usually, you lower your price after the key season, so it's a strange habit,” she says. By doing this, she argues, “the consumer doesn't understand the real price of your brand. Then, a link of confidence is broken, and people think: are you stealing from me the rest of the time until you do a deal [at Christmas]?”
Can the discount culture be turned off? “Being in a family, it's well understood that if we can't [stop it], we may at some stage say that we'd rather not be there.” What does she mean by that? “Not sell,” she adds. But, we are not at the last resort just yet. “First, we hope we'll be able to convince most of our clients. You have to be very careful in the way you do it, but you have to find ways of making consumers more respectful of your brands. In this country (the UK), you should be granted a statue if you buy Champagne outside the Christmas period.”
She is keen to promote “activities that will make people reconsider”, although she concedes that “nothing happens overnight”. The foundation of this philosophy is Bonnefond's assertion that “people never disagree to have Champagne, it's just that they don't think about it”. A resurgent Bonnefond-led team is here to make sure people do.
Part two of this interview runs early nex week.
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