John Stimpfig (image Newsquest Oxfordshire)Earlier this summer, I found myself talking to Laurent Champs, the relatively young and extremely talented winemaker at Champagne Vilmart between Reims and Epernay. I was there to do a story about Grower's Champagnes for the Financial Times and wanted to know how he felt about Tom Stevenson having once described Vilmart as ‘the poor man's Krug'.
Not surprisingly perhaps, Champs was only too happy about such a flattering comparison. However, he was at pains to politely point out that his style was not as similar to Krug as many might think. Although both use oak barrels for fermentation, Vilmart always do the malolactic. Not only that, Krug use a high percentage of Pinot Meunier he told me. Of course, the other big difference between the two was the price of their wines, I ventured jokingly, "take for instance, Krug's new 1995 release of its single vineyard Clos d'Ambonnay, which is retailing at Harrods for £3000 a bottle" I said. "Surely you mean £300 a bottle" Champs replied incredulously. It might seem absurd or even vaguely obscene (in these straightened times) that a single bottle of Champagne can cost such an amount of money - especially on release. But perhaps the point of a product like this is that there are people out there to whom such nose-bleeding prices are more of an incentive rather than a disincentive to buy.
Curiously, Krug don't need to justify such stratospheric pricing, which incidentally puts Clos d'Ambonnay on a par with DRC and Petrus. When I put this question to Krug's new MD Panos Sarantopolous, to his credit, he didn't duck the issue. "The price is a combination of factors", he replied. "Quality, rarity and demand, and rarity is probably the most important at this level" Only 200 cases were produced from this postage sized vineyard in the Montagne de Reims for an entire world market. So immediately, there's not enough to go round, which is why Krug are selling it by the bottle rather than by the case. According to Gary Boom of Bordeaux Index, his view was that "Krug are probably the only people in Champagne who can pull off this kind of pricing." This remains to be seen.
"a new pedestal had to be created... to distinguish between those who are merely wealthy, and those as rich as Croesus"
Ultimately, of course, the market decides. If Krug have priced their wine too high, then the market will punish them. If they have priced it correctly, then the market will reward them - in this case, very handsomely. Having tasted this wine in situ in Clos d'Ambonnay with Olivier Krug, I can assure you that it is a truly sublime Champagne and certainly one of the greatest that has ever passed my lips. But would I spend £3000 on buying it? Of course not... but then I am not Roman Abramovich.
Interestingly, Krug is no longer alone in pricing its latest prestige cuvée beyond the reach of all but the super rich. Most recently, Pernot Ricard has launched its new haute couture champagne with Perrier-Jouet called ‘By and For'. Here, the price is £35,000 for a case of 2000 Belle Epoque Blanc de Blancs. So what's the big deal, you may well ask? The answer is that the purchaser gets to spend a day at Maison Belle Epoque with cellarmaster Herve Deschamps to custom make their very own style of champagne. Deschamps does this largely by playing with the liqueur d'expedition and then signs each bottle as does the buyer. Then the fizz is aged in Epernay and delivered to your door, several years hence. Apparently, a mere 10 cases are available in the UK and 100 worldwide. Anyone interested can buy it through Quintessentially and the Ritz. Personally, my view is that this luxury goods package smells more of the marketing department rather than the vineyard or chais. Of the two approaches, I prefer the Krug's. But is either worth all the hoopla? Of course they are - especially to LVMH and Pernod-Ricard. In fact, for them, it's all about the hoopla. Take away the column inches and virtually nobody would be in the least bit interested. I think that is because these kinds of products aren't necessarily about great champagne. Instead, they are more about human nature and the politics of greed, success and envy. They are all about owning something so rare and so exclusive, that other mere mortals can only aspire to in their dreams.
It seems to me that five years ago, all the big champagne houses were talking about affordable luxury in connection with vintage and prestige cuvée fizz. Now we appear to have gone beyond that. With so much wealth sloshing around, Prestige Cuvée Champagne might have become too affordable. So a new pedestal or two had to be created in order to differentiate between those who are merely wealthy and those who are as rich as Croesus. That is their raison d'etre. But there are others in the mix. For instance, you also have to wonder what kind of profit LVMH and Pernod Ricard are making on these wines. Assuming they sell them, the margins must be astronomical.
"Clos d'Ambonnay makes Clos de Mesnil look cheap at £500 a bottle"
Yet perhaps the most brilliant facet of this kind of new product development is the impact it has on pricing in the Champagne market in general and prestige cuvee sector in particular. For instance, Krug's Clos d'Ambonnay now makes Clos du Mesnil look cheap at £500 a bottle and vintage and Grande Cuvée look like cut price cava by comparison. It's the perfect opportunity for Krug to bump up their prices across the board, which is exactly what they have set about doing.
Now one wonders who will follow Krug and Perrier-Jouet's example in producing the next ‘beyond bling' champagne. My view is that only so many houses can get away with this kind of thing. Equally, there's only a limited amount of time before the market sees through it and calls time. The danger, of course, is that they could kill the goose that laid the golden egg. But knowing how good the Champenois are at the dark art of marketing, I suspect that is never going to happen.
John Stimpfig writes for the Financial Times' 'How To Spend It' and Decanter magazine. He is a partner in bespoke wine events company 'Taste In'