Giving champagne a new sparkle in the U.S.December 30, 2011: 12:01 PM ET
The champagne industry is fighting label confusion in the U.S., but that doesn't dampen Piper-Heidsieck CEO Cecile Bonnefond's spirits.
By Colleen Leahey, reporter
FORTUNE -- New Year's Eve: A glittering night filled with sentimental words, watery eyes, and -- most importantly -- champagne. Fizzy flutes will be sure to tickle the noses of millions of partygoers this New Year. And Piper-Heidsieck, the centuries-old Champagne house favored by Marie Antoinette and Marilyn Monroe, says it's fully prepared for the season.
After being sold by Remy Cointreau to EPI this past summer for a reported $520 million, the centuries-old house found itself a new CEO. Cecile Bonnefond, 55, had spent several years as president at Veuve Clicquot and working at luxury goods conglomerate LVMH before leaving for Piper-Heidseick. Now, she's looking to give the Champagne house a new image, one that's more appealing to the U.S. market.
Bonnefond says she is relying on a combination of instinct and tradition to give this Champagne house a new look. "Luxury is about tension; tension about history and tension about today," she says. Bonnefond invited descendants of the Heidsieck family to lunch in November, hoping to learn the family stories about Mr. Piper. She mentions, "They haven't been invited by the former shareholder for the past 25 years."
But as Bonnefond looks to make inroads in America in 2012, she's not relying on traditional methods. "Market research tells me what the average consumer wants and I'm not interested in the average consumer."
So how exactly does she plan to dust off this centuries-old brand? "Luxury is about heritage. Luxury is about resilience. It's about characters, founders, stories, vision. All those things come with time," she says. And, thanks to clever marketing, like a recent ad partnership with French couture label Jean Paul Gautier, Bonnefond says she is able to stay true to her brand while attracting a younger crowd. "A lot of young people like to eat and like to drink. Well, that's all us!" she says with a laugh.
The U.S. is a power-drinker when it comes to champagne, downing upward of 7 million bottles of bubbly this year as of July 2011. With shipments of over 16 million bottles this year, the American champagne market experienced a major turnaround after taking a nosedive between 2007 and 2009, suggesting Bonnefond just might be looking in the right direction. The mid-year shipment numbers to the U.S. for 2011 increased by just shy of 22% from the previous year, says Sam Heitner, director of the CIVC's U.S. Bureau.
All of this bodes well for French houses like Piper-Heidsieck, which hopes that it can make champagne more than just a seasonal fad in the U.S., no simple task. For one, Bonnefond and her team face one particularly challenging issue in the States: label confusion.
Heitner says America is one of the only countries in which sparkling wine grown outside of France's Champagne region can be labeled as "champagne." To the inexperienced drinker, E & J Gallo Winery's André California Champagne appears to be the real deal -- even though its grapes were harvested in California.
Bonnefond hopes a little bit of education can solve this problem. "You must convince people, get people to try [real champagne], get people interested." Heitner agrees: "There's great opportunity in the U.S. There's a growth of a younger generation who like to spend more money on nicer wine. The percentage of people drinking [these luxury labels] is growing. It's a platform for a huge market with huge potential."
But all of this potential hinges on consumers actually caring where their "champagne" comes from.
"You have very strict regulations to be able to put champagne in a bottle [in France]," says Bonnefond, emphasizing the high quality of her houses' products. Though she faces a massive obstacle in the U.S., the CEO doesn't let it drag her spirits. "You can't stay very serious very long with champagne. It's a fun drink," she says.