8 part video series on the history of Champagne filmed in France

10 Business Lessons to Learn from Champagne

Click on a title to read more!

  • 1.) Turn a setback into a setup.

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    The law of polarity is when something appears to be truly bad, there must be something about it that is truly marvelous as well. Napoléon’s last military invasion was into Russia. It ended in failure and in full retreat back to France in 1814. The coalition of ‘enemy’ armies from Russia, Prussia and Austria subsequently invaded France. They plundered whatever they could and this included millions of champagne bottles lying peacefully within the miles of cellars throughout the region.

    The hardest hit were those of Moët who lost 600,000 bottles when the Russians occupied his company headquarters. Jean-Rémy Moët remained positive and told his friends “All of those soldiers who are ruining me today will make my fortune tomorrow. I’m letting them drink all they want. They will be hooked for life and become my best salesmen when they go back to their own country.” He was right! Not only did foreign armies invade and steal his champagne, but their sovereigns arrived at his cellars shortly thereafter, including the Emperor of Russia Alexander I, the Emperor of Austria Franz II, King Frederich Wilhelm of Prussia, Prince Willem II of Orange, and England’s Duke of Wellington. They were much more polite and purposefully tasted and purchased champagne for themselves. All of them were seduced and as a result, Jean-Rémy Moët became the most famous champagne maker of his time and supplied every European court. Today, Moët et Chandon is the largest producer of champagne and its non-vintage, Brut Impérial is the best selling champagne in the world!

    KEY takeaway is: You should ‘attempt to balance every negative with a positive’. Turn a setback into a setup. It may not be easy, but it is possible!
  • 2.) Do the never.

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    A monk named Dom Pérignon was appointed the business manager of the Abbey of Hautvillers, located in Champagne, at the age of 30 in 1668. The Abbey had been left in ruins, due to many wars and invaders. Among his responsibilities was the restoration of its vineyards and cellars. Because of his dedication to hard work, he created multiple new improvements to the process of making wine.

    In Dom Pérignon’s time, grape growers grew as many grapes as possible, which actually weakened their concentration and ultimately led to lesser quality wine. But D.P. wanted to make the best wine in the world to honor God, so he intentionally set out to do something new and different. (He is sometimes said to have invented champagne, but this is not true – nobody invented champagne. It occurs naturally on its own. In a cold climate, the yeasts hibernate and don’t finish converting all the grape’s sugar into alcohol and carbonic gas. They will start to do so again in the spring when the weather warms up. If this second fermentation takes place in a well-sealed bottle or container, the carbonic gas is trapped inside resulting in the amazing fizz once opened.) Dom Pérignon made outstanding wines, this we know, but he actually tried to get rid of the bubbles as fizzy wine was unacceptable to use during a Mass.

    He was an innovator who developed the Golden Rules of winemaking that include:

    • Use only the best grapes and throw away those that are broken.

    • Prune the vines hard in the early spring to avoid over production and thus weaker tasting grapes.

    • Harvest in the cool of the morning, to suppress the process of fermentation that begins when skin of grapes are broken.

    • Press the grapes gently so that color from the skins is largely eliminated from the juice making the wines more clear and not cloudy.

    He is also credited with being the first to expertly blend grapes and create wines of perfection. Even Louis XIV knew of his wines. Dom Pérignon was also the first in Champagne to use cork to seal bottles, which was infinitely better than commonly used wood pegs wrapped in hemp soaked in olive oil. Dom Pérignon was an inventor who aimed for the highest quality in wine and profit. He sold his wines to help the poor, the church, and travelers who visited the Abbey. 350 years later he is still making an impact!

    KEY takeaway is this: Do the never! Do what has not been done before. Go ahead and buck tradition – change the rules for the better. His namesake champagne is one of the finest brands today!

  • 3.) Don't come from a place of no.

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    It took two young widows, who both inherited their husband’s champagne firms, and both without any prior business experience, to solve the champagne bottle’s sediment puzzle that had been dogging the winemakers for over 100 years, and to create a new type of dry champagne that dominates the world market today!

    Technically, they were both wealthy ladies who could have sold their newly inherited champagne firms and been set financially for many years to come, but they chose to engage in life and make a place in history for themselves instead. Veuve (widow) Clicquot immediately, within several months of taking over the house, set to work to solve the sediment issue and succeeded brilliantly. She developed the method to remove the sludgy, cloudy sediment, leftover after the 2nd fermentation in the champagne bottle, while keeping the bubbles intact. Her invention, called remuage, transformed the entire industry over 200 years ago and is still being used today!

    And Veuve Pommery created the first commercially sold 'dry' champagne. The conventional wisdom of her fellow champagne makers of the time was that it was just too costly and risky to be done. She wanted to make history and she sure did. She convinced the grape growers she would cover any of their losses if they would pick later than was the norm when she said so. As a result the grapes are more mature, and need less sugar to cover their acidity. Today 95% of all champagnes sold are dry thanks to Veuve Pommery's innovation!

    The Bottom line is: these young widows did not listen to naysayers. They didn't come from a place of no - they came from a place of yes. They believed in themselves and weren't limited by the negative thinking of others. Rather, they focused on 'solution finding' free and clear and achieved great success. You too can release the limiting shackles placed on your mind by others. You must think positively to achieve success. See the end goal as being already achieved and work backwards. Don’t listen to those who say it can’t be done.

    KEY takeaway is this: Where there is a will, there is always a way!
  • 4.) Harness the power of celebrity endorsers.

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    The wines of Champagne were mostly known locally until the French kings, who resided in the Palace of Versailles, helped spread their popularity within France and other countries. Louis XIV (shown here) first tasted champagne as a teenager at his coronation in the Cathedral of Rheims in 1654 (located in the heart of the Champagne region), and afterwards, it is reported he rarely drank anything else.

    Because it was the King’s favorite wine, his royal courtiers followed suit in his preference for champagne. Everything the Sun King did was mimicked. Dinners at Versailles were like dramatic performances with his court in attendance watching closely to see what he liked and disliked. If he liked something, it would quickly be served on the tables of the wealthy nobles. Since Versailles was the center of the world during the 17th century, other royals of Europe and Russia tried to emulate it. Indeed, the Royals helped put champagne on the map. Due to the Sun King’s patronage, the market for champagne expanded straightaway. This was a prosperous time for the champagne makers.

    The same idea is applied today: hire a popular celebrity who honestly enjoys your product or service to publicly endorse it. It may help grow your market share quickly and efficiently! Joan Rivers was hired as a celebrity spokesperson to sell costume jewelry on QVC. Her first appearance sold $1 million for the company in 1990. She is still selling costume jewelry on QVC today with over $100 million in sales!

    KEY takeaway is this: Partnering with the right celebrity may be the road to success you can ride on!
  • 5.) Listen to the market.

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    Do this even when your company staff is skeptical and fears losing customers who like the way your product/service currently is. Status quo is frequently not the way to go.

    You must keep adapting and moving forward. What better way to do this than listen directly to what your customers want and then go do it. You just might make your firm the leader in its market and transform the entire industry, and the world, for the better!

    Jean-Baptiste Colbert, Louis XIV’s Finance Minister who was trained in business, is credited with the phrase “Export or die.” I think the modern version should be “adapt or die.” Your customers may or may not know what they want, but asking them is a good way to start! You may be surprised at what you learn. Yes, you can do lots of expensive market research, but you can also simply ask your employees or those who interact with your customers for real time information.

    With respect to champagne: because of the northerly cold and damp climate of the champagne region, up until appx 1874, the grapes were picked early and not allowed to fully ripen due to fears of being lost on the vine. The longer they were on the vine, the greater exposure to the elements and thus increased risk of being destroyed. Consequently, champagne makers used sugar and syrups to cover up the overly acidic taste from using unripened grapes. The champagnes were sugary and best served only with desserts, thus in direct competition with port, sherry and madeira.

    In the mid 19th century, British wine merchants were receiving suggestions from their customers that they may prefer a dry wine to be had throughout a meal. Champagne makers considered making a dry wine, but rejected it as the risks and costs were considered too great. First, they was no proven market for a dry champagne. Second, the grapes would need to stay on the vine longer to become fully ripened, which was very risky. Third, dry champagne would need to be aged longer in the cellars before released onto the market, which is costly.

    But British customers were asking for it. Louise Pommery, a widow who inherited her husband’s champagne firm at a young age, made it her goal to give the customers what they wanted. She experimented and promised the grape growers to take care of any losses if they picked the grapes later in the season than was custom, when they were fully ripened.

    After a few years, her new Brut champagne went to market in 1874 and blew it away! It was so good that Pommery commandeered the market. She created the first commercially sold Brut (dry) champagne. She grew her small house into a major player and transformed the entire industry for the better. Today 95% of all champagne sold is Brut (some say as high as 98%)!

    KEY takeaway is this: Listen to your customers and go fill the void they are asking for! You may make a huge, positive impact on the world!
  • 6.) Build a better mousetrap.

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    Improving an existing product may just be the path to your fortune.

    Before the turn of the 19th century, the champagne makers had not figured out a way to get rid of the sludgy sediment leftover from the second fermentation in the bottle. This sediment would often make the wine look a bit cloudy when the bottle began to pour. The other byproduct of this second fermentation is the carbonic gas, which produces the fabulous fizzing bubbles once the bottle’s closure is removed. Typically, the bottles were shaken rapidly to get the sediment down to the neck and then the wine would be decanted into another bottle, but unfortunately most of the marvelous fizz would fly away during this process.

    After the sudden death of her husband in 1806, Veuve Clicquot – Ponsardin, a young widow, still in her twenties, decided to partner with an expert to tackle this problem. She convinced her father-in-law not shut down the family’s champagne business and to give her the lead position. She worked with her very experienced cellarmaster, Antoine de Müller, to have holes cut into a table where bottles were placed by their necks on a downward angle.

    They were occasionally given a slight twist and shake, along with gradually moving the bottle into a fully vertical position. This process slowly moved all the sediment into the neck of the bottle and the rest of the wine was clear. When the cork was then pulled out, this sludge would shoot out leaving most of the wine behind and the wonderful fizz intact. The bottle would then be topped off with some wine and be recorked and ready for sale. The process is called remuage and is still being used today!

    Veuve Clicquot made such a monumental improvement to the champagne making process that eventually all other champagne houses adopted her method. Remuage is now done mostly by large machines called gyropalletes and the sediment is flash frozen in the bottle’s neck and quickly expelled. The resulting wine is truly gorgeous and clear, and the bubbles are kept ready to dance when the bottle is opened. I don’t need to tell you, Champagne Veuve Clicquot is one of the top selling brands today. She, indeed, built a better mousetrap! We are certainly thankful to her for doing so!

    KEY takeaway is this: Perhaps you can find success by improving an already existing product too.
  • 7.) Think vertical integration.

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    Following the French Revolution in the late 18th century, the Champagne vineyards, previously owned by the clergy and wealthy, were confiscated by the State and divided into many small plots and sold.

    Consequently, many more people now owned the vineyard lands. They number of grape growers increased. This is actually just fine, as champagnes are comprised of a blend of 30, 50 (even 100) different wines, many grapes are required from many different small plots of vineyard lands.

    Today the grapes prices are set by the French government. One can imagine the great expense that can be eliminated if a champagne house owns the majority of the vineyard land it requires to produce its wine, instead of having to buy their grapes. Though the land and property taxes are steep, over time the savings of owning their own vineyards and thus eliminating a middle man grape seller will be beneficial. Vertical integration will grant them more capital that can be used to purchase more lands, or for other necessary expansion and improvement projects.

    Several firms that have successfully harnessed vertical integration are Veuve Clicquot, Louis Roederer, and Duval-Leroy. On the contrary, those who have not vertically integrated and purchased their own vineyards have, unfortunately, been forced to sell out to larger, publicly traded firms. They did this in order to get capital to expand and make necessary improvements to their champagne house. Sadly, they may have lost control of their once family business...perhaps vertical integration could have stopped this from happening, in addition to increasing profit margins.

    KEY takeway is this: Vertical integration may, over time, pay off big for you too!
  • 8.) Don't accept defeat.

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    Never never never quit. Iron sharpens iron. Fall down seven times, get up eight. There is a law of nature that states the best products always are made under difficult circumstances, because they are forced to surpass themselves. Champagne is no exception to this law.

    The people of Champagne have faced many obstacles over centuries, but keep moving forward. They suffered under barbarian invaders, the Hundred Years’ War between England and France, the Thirty Year’s War between Catholics and Protestants, the Fronde, which was a series of civil wars in France, the French Revolution, Napoleonic wars, the Franco Prussian War, WWI, the Communist Revolution, which eliminated the Russian market for champagne in one day, the Phylloxera bug that wiped out all the vineyards, then the horrible Prohibition in the States, the Stock Market crash of 1929, and WWII just to name a few.

    Some of the fiercest fighting of WWI was in the Champagne region. Virtually all champagne firms suffered damage due to heavy German shelling and moved underground into their cellars for protection. Most of the city of Rheims moved underground too, for weeks on end. Some citizens stayed underground for as long as two years! The city completely flipped underground, including schools, churches, hospitals, cafes, tailors, cinema, etc The people lived among the champagne bottles. Remarkably, the harvests went on during the war years at night mostly. The vines had been devastated due to the military trenches cut through them and the German bombs. Pickers actually wore gas masks, to try to avoid the poisonous gas being used by the Germans. Impressively, they crawled on the ground in the dark and had to avoid unexploded shells, barbed wire, and German soldiers who were very close!

    At the end of WWI, Champagne had lost half its population, 40% of its vineyards were in complete ruin, and the city of Rheims, along with its historic Cathedral, had virtually been destroyed. This being said, those who tasted the vintage of 1914 have said it was one of the best ever!

    Key takeaway is this: Despite all the horrible circumstances that have plagued the Champagne region over centuries, the people keep adapting and surviving to bring us one of the greatest wines in the world. Un Grand Merci to them! Like Champagne, never accept defeat.

  • 9.) The law of supply and demand.

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    Krug Champagne also offers single vineyard champagnes. These break the rules of blending and don’t use grapes from multiple vineyards. Instead, just as it sounds, the grapes come from a small, single vineyard.

    Thus, only a limited number of bottles can be produced annually. The law of supply and demand is applied here: a small quantity of great quality champagne creates great demand and thus they can request high pricing. Competition for a limited supply of really great goods means you can ask for more money in exchange for your product, certainly a nice position to be in! And this translates into high profit. Krug Clos du Mesnil (made from 100% Chardonnay grapes) is appx $1000 a bottle... and Krug Clos d'Ambonnay (made from 100% Pinot Noir grapes) from its so named single vineyard and is appx $3500 a 750 ml bottle. Consider yourself very fortunate should you get your hands on of these delicious single vineyard Krug (terrior-driven) champagnes!

    KEY takeaway is this: Perhaps you may be able to duplicate this profitable type of supply and demand situation in your firm too.
  • 10.) First mover advantage.

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    It goes without saying, one must have a good product to build up a first mover advantage. And by most accounts, champagne is, indeed, a very good product!!! Though the champagne bubbles were first considered a flaw and the winemakers tried everything to get rid of them (especially the monks... they couldn't have fizzy wine for their mass service).

    The process of fermentation was still not understood in the mid 18th century (it wasn't until Louis Pasteur, the renowned French microbiologist and chemist discovered the process in the mid 19th century). The bottles were not strong enough yet to hold the built-up pressure from the fermentation's trapped carbonic gas. As a result, many bottles burst in the cellars resulting in their contents being completely lost, sometimes as much as 90% of the cellar was destroyed.

    However, at the same time, a young winemaker named Claude Moët, (as pictured here) saw that 'consumer' tastes were changing in the region and demand was increasing for the bubbly champagne. Despite the risks involved, he wanted first mover advantage to supply the majority of the growing new market. It has been recorded that by 1750 he was making 50,000 bottles of champagne annually with the entire region's production being 300,000. He, indeed, claimed the largest stake of the champagne market first and it has worked out quite well for his firm. His house is still going strong today, over 250 years later, and Moët et Chandon sells the most champagne in the world!

    Some modern "first movers" are Amazon, Ebay, and Yahoo.

    KEY takeaway is this: Go big in your market first and become the entrenched leader!

Kristin Noelle Smith was imprinted with the vine as a child living in Modesto, CA (home of one of the world’s largest producers and exporters of California wines). She received both her B.A. and M.B.A. from Northwestern University and has lived in Chicago for the past 25 years. She seeks to offer historical and business perspectives in her wine commentary, with a vibrant enthusiasm for wine’s many unique and exciting facets. You may read more about champagne on her blog. Contact , About
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