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Charles Heidsieck: The rise fall ( rise again) of a champagne house

Time:2016-11-28 19:34wine - Red wine life health Click:

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Charles Heidsieck

It was 1985, and bottles of Charles Heidsieck champagne were flying off the shelves. Global sales were on a par with the likes of Veuve Cliquot, and the brand marketed itself: its namesake, a 19th-century dandy known as "Champagne Charlie," was something of an icon in his own right, the man credited with bringing champagne to the USA.

Fast forward 25 years, and Charles Heidsieck was a brand facing extinction. An acquisition by spirits company Remy Cointreau in 1985 had seen the brand pushed gradually into irrelevance, partly because Cointreau also owned two rival champagne houses. Sales entered into a decades-long period of apparently terminal decline, plummeting from around 4 million to 250,000 annually by 2011 when it was taken over by luxury goods company EPI.

It was a year later when Steven Leroux, a wine executive who had spent his life in the Champagne region of France, received a call on behalf of Charles Heidsieck's new owner, EPI founder Christopher Descours. Descours had seen something "exciting" in the ailing brand and wanted Leroux to turn its fortunes round as the champagne house's new director.

Business Insider met Leroux in London to find out what happened next.

Stephen Leroux (66) Charles Heidsieck

Stephen Leroux, director of Charles Heidsieck Charles Heidsieck

"My reaction when I received the call was: 'Fantastic'," Leroux says. "People from the Champagne region have always had a lot of respect for the brand in Champagne, because it’s a great house, it’s a great story, and the wine’s always been fantastic, but from a business point of view, we were all laughing a little bit. Because it was this fantastic jewel, owned by people who were just letting it go."

Once I got in, I said, 'Oh sh*t.' I really got a bit of a shock

Only when he began working at Charles Heidsieck did he begin to understand the scale of the task ahead. "Once I got in, I said, 'Oh sh*t.' I really got a bit of a shock," he says. "I realised how bad the company had become, and how tough the exercise was going to be."

The problems were numerous and big: the lack of established distribution networks, the dominance of more established rivals like Bollinger and Pol Roger, and the lack of brand awareness, especially among younger generations.

Distribution was the first thing to tackle. "The foundation of a business — whatever it is — is distribution," Leroux says. Sales figures may have been small, but the brand was still a strong one, and the issue came down to telling distributors that they had a "once in a lifetime opportunity" to distribute such a grand house exclusively.

Independent wine distributors recognised the strength of the revitalised brand, and "step-by-step, countries came on board." The firm set up its own distribution network in France, which gave an immediate boost to sales, and it struck gold in the USA when legendary Californian winemaker Michael Mondavi told Leroux he wanted to distribute Charles Heidsieck champagne across the country.

The firm struck gold in the USA when legendary Californian winemaker Michael Mondavi told Leroux he wanted to distribute Charles Heidsieck champagne across the country

"Within three years, we had established most of what we wanted in terms of distribution," Leroux says. In the UK, its client base shot up from zero to 550 today, focusing on aspirational places: department stores like Fortnum & Mason, wine bars, independent shops, and high-end restaurants.

The next big problem was "vanished" consumer awareness. Leroux recently turned 50, and says that "whether I'm in champagne or not, I would have heard about Charles Heidsieck, because when I was 25 or 30, the brand was as big as one or two famous champagne names."

People from younger generations, however, are more familiar with brands like Bollinger and Pol Roger who have continued to generate growth. The problem with consumer and demand and awareness was, therefore, significant.

"It's a question of wine, courage, and making people taste it," Leroux says. "A retailer, in a very friendly way, will serve the brands that sell more or less automatically, because it takes time to talk about it."

His strategy to make Charles one of those brands was to push by-the-glass sales of the product in luxury wine bars and restaurants. "That way, people experience the quality of their wine," he says.

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