A new broom at Moët

There’s a new face at the top of Moët Hennessy Estates & Wines, the division of luxury goods colossus LVMH that includes brands such as Cloudy Bay, Cape Mentelle, Terrazas and Chandon sparkling wines.

That new face will be familiar to recent observers of the Bordeaux fine wine scene: Jean-Guillaume Prats, for the past 15 years CEO at Château Cos d’Estournel, the Grand Cru Classé St-Estèphe estate owned by Prats’s family until 1998, and now the property of Michel Reybier.

It’s an intriguing move. Prats was at Cos for nearly 20 years in total and, in his words, “knew every row of vines”. Now he oversees a business with operations on four continents, from Mendoza in Argentina to the Yarra Valley in Australia; one with nascent businesses in China and India, but whose core activities focus on names with strong brand equity – Cloudy Bay, Chandon, Cape Mentelle.

But Prats had no hesitation about taking up the new post. He describes the challenge as “absolutely fascinating”, the brands as “extraordinary”, and the invitation to be in charge of them as “a huge privilege”.

Risk taker

Jean-Guillaume Prats spent nearly two decades at Château Cos d’Estournel, and he and his family still live in the Bordeaux area. How does he reflect on his time in the political goldfish bowl of the Médoc?

“I was lucky to be there at the right time,” he says. “I think Bordeaux as a whole has seen over the last 12-15 years a prosperity which has probably never been seen in the industry since 1855, when the classification was made.

“Bordeaux has always been through short and long cycles of extreme prosperity and great difficulty: 1855, when the classification was carried out by Napoleon III, and today are the two great times of prosperity for Bordeaux.”

Prats cut a sometimes controversial figure in the Médoc, investing new Cos owner Michel Reybier’s millions into a space-age new winery and cellar to make a wine that aspired to join the First Growth elite.

There were times – the release of the highly divisive 2009 wine springs to mind – when Prats seemed to positively enjoy being controversial, and the criticism doesn’t bother him to this day. The 14.5% Abv Cos 2009 – “monumental” was perhaps the most popular review adjective – won a perfect 100-point score from über-critic Robert Parker, but was dismissed with a workaday 16.5 out of 20 by Jancis Robinson MW.

“C’est la vie,” he shrugs. “Those who said in ’09 it’s undrinkable, a catastrophe, were the first to come forward to taste ’10. We said: ‘Are you sure? We don’t want to hurt you!’ But they said yes, they wanted to taste…”

While Prats isn’t averse to reminiscing about Bordeaux, he is far keener to focus on his new job. Estates & Wines has, at first glance, a hotch-potch of contrasting wine investments, from domestic sparkling wine production under the Chandon banner to premium marquee names such as Cloudy Bay.

Prats divides these into three: Chandon, the “global” (his word) sparkling wine brand, primarily selling into domestic and regional markets from Argentina, Australia, Brazil and the US; “lifestyle” wines, including Cloudy Bay, Terrazas, Cape Mentelle and Newton; and “great” wines, only available in tiny quantities: Cheval des Andes, the joint venture between Terrazas and Cheval Blanc; Te Koko, Cloudy Bay’s ultra-premium variant; and single-vineyard wines.

Prats’s mission is one of evolution rather than revolution. Or, as he puts it: “I just jump into it, making sure we can continue what we have done. My predecessor, [Xavier Ybargüengoitia] has set the right pace.”

The exceptions are China and India. Prats’s tenure begins as Estates & Wines makes its three most significant investments in a generation: twin sparkling wine projects in China and India, and a high-end red wine in China’s Shangri-La Mountains.

The fizz investments are continuations of the long-term sparkling wine expansion policy initiated by former Moët president Robert-Jean de Vogüé as long ago as 1955. Convinced that Champagne would be unable to cope with future global demand, he established Chandon in Argentina in 1960; similar businesses followed in 1973 in Napa and Brazil; and in 1986 in Australia.

The company’s first sparkling wine from India is due for release this October, made using bought-in grapes and rented winery space near Nashik in Maharashtra province. A 50,000-case Chandon winery is currently being built.

Chinese adventure

Chandon China is a mirror image: located in Ningxia, dubbed by Prats as “the real China”, two-and-a-half-hours flight from Beijing. The release of the 2012 wine has been put back to 2014 “to give it more time in bottle”. A new winery was officially opened at the end of June.

The idea is not to sell Indian and Chinese sparkling wine to the world – not yet, at any rate – but to satisfy domestic demand. This follows the same domestic/regional approach in Brazil, Argentina (sold in Peru, Chile, Colombia), California (sold in Canada) and Australia (available throughout Asia-Pacific, but especially Japan, Singapore and Thailand).

While intrigued by the thought of making wine in such far-flung destinations, Prats comes alive when discussing the top-end Chinese red wine project taking shape high in the Shangri-La Mountains of Yunnan Province, with a vineyard planted mainly to Cabernet Sauvignon and Merlot, and a winery currently under construction.

“We are trying to make the best red wine in China and to make something of an international standard in terms of quality,” he says. “If we are not happy with the first or second harvest, we will not release the wine.”

It’s more than simply the location that makes this project a departure for Moët Hennessy. The company’s recent history is one of acquiring established brands – Cloudy Bay, Cape Mentelle, Newton, Numanthia; and, when that didn’t work in the case of Mountadam Vineyards, of selling on again. But doesn’t the Chinese wine venture – yet to be named – represent starting from scratch? “Yes, you make a very good point, but we have started to do that recently,” Prats replies. “The best example is Te Wahi, our Central Otago Pinot Noir… This is deeply rooted in the DNA of Moët Hennessy. What Robert-Jean de Vogüé did years ago – that was starting from scratch.”

For the moment, Prats’s gut feeling in Yunnan is “short ageing in the Bordeaux way, that is 12-14 months” with the initial 2013 harvest, launching in late 2015 after time in bottle. He continues: “I think Shangri-La has some extraordinary advantages, which are first the soil: deep gravels carried by the Mekong River – very poor soils and quite similar to the Gironde and the Médoc.

“The second thing is that it is so far south: we are at the same latitude as southern Morocco, but at an altitude of up to 3,000m. During the last four to eight weeks before harvest there are very warm temperatures with strong photosynthesis and accumulation of anthocyanins, very thick skins.

“So we’re going to get some very dark, rich wine. But when there’s no sun, at night, temperatures can fall to 5°C. So we will have low pH and high acidity – balanced wines.”

For all his marketing savvy and an understanding of the luxury goods scene forged in the furnace of Bordeaux, Prats believes it is this passion for making fine wine that landed him the job. “Christophe Navarre told me it was ‘because you want to be in wine. We are in wine. And we don’t want someone from the fashion business or the corporate world. We want a wine culture for our brands’.” No longer at Cos, Prats can’t – returning to his phrase – “know every row of vines” any more. But he is determined to keep the vineyard connection intact. “I don’t want to lose that – this is what I love. I’ve already travelled a lot to the vineyards and I will do what I physically can.

“But down the road we have a team in place, and my role is to challenge them in a positive way. I will try to travel to each vineyard two to three times a year. Probably within the Moët Hennessy world this is the job that requires the most running around of all!”

One place that Prats won’t be running to professionally any more, however, is Bordeaux. Ironically, the only LVMH still wines not under his control are Châteaux Cheval Blanc and d’Yquem. But if that’s a disappointment, Prats conceals it well. “No, not at all,” he insists. “After all, if I’d wanted to run a Bordeaux estate, I would have stayed in Bordeaux.”

Moët Hennessy Estates & Wines

1955: Moët & Chandon president Robert-Jean de Vogüé begins to look beyond Champagne for quality sparkling wine production
1960:   Bodegas Chandon Argentina established in Mendoza
1973:   Further Chandon sparkling wine businesses founded in the Napa Valley and in Brazil
1986: Domaine Chandon established in Yarra Valley
1990:   Veuve Clicquot Ponsardin acquires three wineries – Cape Mentelle in Margaret River; Newton Vineyard in the Napa Valley; and Cloudy Bay in New Zealand
1999:   Premium still wine project Terrazas de los Andes created in Mendoza; partnership with Château Cheval Blanc to launch high-end wine Cheval des Andes
2002:   LVMH buys Mountadam Vineyards, in Australia’s Eden Valley
2003:   Estates & Wines founded as dedicated wine division
2006:   Mountadam sold to David Brown
2008:   Company acquires Bodega Numanthia, based in Toro, Spain
2012:   Chandon enters China and India with sparkling wine projects
2013:   First harvest for new, premium still red wine in Yunnan province, China; release slated for late 2015

Moët Hennessy Estates & Wines: in figures

Parent company LVMH declines to release detailed revenue breakdowns; in 2012, wine and spirits division Moët Hennessy recorded annual revenue of €4.137bn ($5.6bn), up 17.4% on 2011; of which wines and Champagnes accounted for €1.98bn, up 11.1%. LVMH said Estates & Wines recorded “significant” revenue growth in the year. Still and sparkling wines sales by volume (excluding Champagne) were up 3.6% to 43.3m bottles.

Vineyards in production (hectares at end of 2012):