The coming of Penfolds Champagne and Eau d'Sauternes

Penfolds has stirred controversy by launching a Champagne. Robert Joseph looks at how other prestige industries have managed such joint ventures.

Porsche is also a watchmaker
Porsche is also a watchmaker

Why shouldn’t Rolls Royce make a watch?

It was nearly half a century ago; I was 17 years old; and the person asking a question he clearly thought rhetorical, was a well-known business consultant who had been paid to give a talk to conference delegates at the hotel my parents ran in the south of England.

In 1972, Porsche had just shocked the watch world by launching the Porsche Design Chrono 1 which had a (for the time) groundbreaking black dial based on the speedometer on the iconic 911 car. A British journalist spoke for many, when he said that the watch was “only suitable for a funeral… Porsche should concentrate on producing cars.”  

Watch buyers evidently disagreed. Porsche sold 50,000 examples of that model and have been selling watches ever since – along, now, with briefcases, wallets, trainers and even a smart looking electric drill.

If you’re surprised by the idea of making a hole in the wall with a Porsche-branded tool, think again. Hundreds of thousands of builders and do-it-yourselfers in France and elsewhere have been doing precisely that with Peugeot drills for a very long time. Indeed, the French car manufacturer first began to make tools way back in 1810. It is also a successful bicycle manufacturer - like BMW

And then there’s Yamaha. After training as a watchmaker, in 1887, Torakusu Yamaha, launched a business making musical instruments. In 1920, it produced a wind-up record player which, in 1955 was followed by a motorcycle, followed by skis, guitars, trumpets, tennis rackets and amplifiers, among other things.

Thirty years after that conversation about Rolls Royce watches, it was my turn to talk to a roomful of conference delegates, at the Richemont group’s sales and marketing in Verona. Richemont’s luxury brands include Cartier, Montblanc, Chloé, Dunhill and Jaeger-LeCoultre and an exercise in which I took part involved challenging the team from one brand to imagine what they might do with another. The Montblanc executives for example got to consider which other products – apart from the iconic watches and jewelry – could be sold with the Cartier logo. Perfume, pens, wallets and belts were thought acceptable, but not the backpacks that successfully sell under the Montblanc brand.

Compared to this breadth of brand-extension, the recent announcement that Penfolds was to form a joint venture with Thiénot to launch a Champagne should barely raise an eyebrow. Why shouldn’t one of the strongest wine brands in China leverage its prestige to move beyond its Australian roots? Why shouldn’t it sell the Napa Cabernet it has planned for 2022 and, after that, who knows, a Bordeaux or a Brunello? If I had to buy a bottle of wine and didn’t know or recognise any of the producers on the list, I’d trust Penfolds.

I guess the Penfolds Champagne may lead to a few raised eyebrows - by people like Andrew Graham of the Australian Wine Review who declared that getting into wine outside Penfold’s heartland of South Australia might make some people feel “just a bit dirty”.

But why? After all Roederer, Taittinger, Deutz and Moet & Chandon have all spread their roots beyond Champagne. Torres makes wine in Spain and Chile, and both the Lafite and Mouton branches of the Rothschilds have several overseas ventures. And, of course, there’s a distinguished list of Australian ventures in New Zealand, which, way back in 1980, included the planting of a vineyard in Gisborne – by Penfolds.

So, let’s dismiss any nonsense about wanting to restrict anyone’s freedom to make wine wherever they want, and move onto that Rolls Royce question. What else might a wine producer be able to do?

The two easy answers – provided in particular by the Italians – are distillates and olive oil. In the New World, winery cellar door shops often offer jams and chocolates and other edibles produced or flavoured with herbs and fruit grown with the grounds of the estate. But could a wine brand go further?

La Motte in South Africa has produced a terrific range of nicely packaged soaps and skin creams, based on aromas derived from its own ingredients. Is it stretching the imagination too far to consider extending this to include a perfume?

A few years ago I mischievously photoshopped a combination of a Chanel No 5 bottle and a Chateau d’Yquem label to create a thought-provoking imaginary Eau d’Yquem to slip into marketing presentations I give to the industry. And every now and then someone asks me if it’s real – presumably without considering the likelihood of Francois Pinault, the CEO of Chanel happily collaborating with his biggest competitor, Bernard Arnault of Yquem in this kind of venture.

The image of my vinous eau de toilette jumped back into my mind last week, half way through the Vinexpo Press dinner at Yquem. As I took my time sniffing the extraordinarily complex, sweet-but-not-cloying, aromas of the chateau’s 2001 I couldn’t help thinking ‘why not?’

I have a sneaky feeling my neighbour at the table–from another Sauternes chateau with a dynamic marketing strategy – may just have shared my opinion. Watch this space…

Robert Joseph

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