Champagne bubble in no danger of bursting, says Moet Hennessy chief executive

Moet Hennessy boss Philippe Schaus on the decision to sell Cape Mentelle and the group’s investment in biodiversity in the Yarra Valley.

Moet Hennessy chief executive Philippe Schaus at Oncore at Crown Sydney. Picture: Jane Dempster

Looking out over Sydney Harbour from Oncore’s 26th floor during a flying visit to Australia, Philippe Schaus, president and chief executive of Moet Hennessy, the wines and spirits division of LVMH, wants to set the record straight. Despite a Christmas season that he likens to the “roaring twenties” in terms of champagne consumption, the LVMH executive committee member reassures there is no global bubbly shortage.

“We have seen especially post Covid a resurrection of pleasure,” explains the Paris-based exec, who has headed the wines and spirits division since 2017.

“There’s not a long term champagne shortage,” he clarifies, “just an excess of demand … and that’s where we had to restrict and make contingents to be able to fairly distribute bottles around the world.”

The Champagne region of France ships 320 million bottles annually, which is split between the world’s co-operatives and growers, with Australia considered the 6th largest market for fizz.

Mr Schaus reveals Australia represents one of the top 10 biggest markets for champagne across its revered brands including Armand de Brignac, Dom Perignon, Krug, Ruinart, Veuve Clicquot and Moet & Chandon. “The beauty of champagne is that it is qualitative and limited. In a very good year it could be 350 (million) and in a terrible year it could be 280. We can only have as many bottles as the land gives us. And if you look at all of Champagne, the quantity of bottles coming out of Champagne has been stable for the past 30 to 50 years.”

“They are curious, they want to experience different vintages, types and brands. And yes, it is moving more up-market.”

Napoleon’s preferred tipple Moet & Chandon, which turns 280 this year, is the current Australian market leader, with Veuve Clicquot behind it. Both brands have been at the forefront of unique marketing experiences executed locally for VIPs since the lockdowns were lifted, with Moet Effervescence providing the first big bash in December 2021.

Its sequel in December 2022 featured a private set by Calvin Harris on the Sydney Harbour foreshore, two weeks before Mariah Carey headlined the New York equivalent.

Hotel Clicquot, meanwhile, a highly curated hospitality experience that popped up in the Byron Bay hinterland in late 2021, followed by Noosa in 2022, was a locally born initiative. “Hotel Clicquot was unique to Australia and the first time we did that,” Mr Schaus says.

Last year’s busy social calendar of event spectaculars also included Dom Perignon’s intimate Plenitude 2 evening with Saint Peter chef Josh Niland, while a celebration of Hennessy’s NBA partnership came complete with a floating basketball court on Sydney Harbour. “We don’t look for direct links between activations and sales,” Mr Schaus clarifies. “Activations build a profile for that brand and give it a deeper personality. In the long term, that’s what makes the brand what it is. Today, I am putting into cellars spirits that will only be consumed in one hundred years. Our mission is that in one hundred years, people are still going to consume wonderful champagnes and cognacs, and our whiskeys. So really, we are more long term, than short term driven.”

Patience is a virtue also best used in the emerging markets surrounding our shores: “For the moment with China, you cannot call it a champagne market,” he says. “Traditionally Chinese people like to drink a spirit with their dinners rather than champagne or wine. It’s very much cognac driven, it is very spirits driven,” he adds, referring to their Hennessy and XO Cognac business. “There is an upcoming connoisseurship of wines and champagnes in the very big cities, but it’s still a very small minority.”

By contrast he says Japan “is a huge market for champagne”, while India remains confined by very high import duties making consumption more focused on local products. “We make sparkling wine in India under the Chandon craftsmanship, and that is really what we push in India.”

In our own backyard the Yarra Valley Chandon winery supplies both the Australian market as well as Asia-Pacific. “We import as much champagne into Australia as we export Australian-made sparkling wine into South East Asian markets.”

This 142 hectare winery, located on land of the traditional owners, the Wurundjeri Woiwurrung people of the Kulin Nation in the Yarra Valley, is also the site of the Group’s latest sustainability commitment: “The Chandon winery is working with Melbourne Water and Greening Australia to invest in the rehabilitation of the natural indigenous ecosystem to bring back biodiversity and to enrich the soil.” The project involves the improvement of waterways including both rivers and billabongs, the rewilding of indigenous plants and the repopulating of critically endangered species, such as the helmeted honeyeater and Leadbeater’s possum. “We believe it is beneficial for the winemaking long term, but in the short term water quality will be improved, at risk species can be protected, and the climate will benefit.”

In January LVMH made headlines when it sold Cape Mentelle, the Margaret River winery to Australian retail drinks and hospitality company Endeavour Group. “The reason for doing this is because we have been investing a lot in wines: we have acquired Chateau du Galoupet, Chateau d’Esclans and Joseph Phelps. They are all very large properties, they are scalable properties, they are high-end wines with distributors around the world,” Mr Schaus explains of the decision.

“So we are putting more and more effort in having wines that resemble our champagnes in terms of being global brands of a certain scale and expandable. And we didn’t see that journey for Cape Mentelle, we saw it more as a local wine of a very high quality, so it didn’t fit our portfolio anymore and felt others would do a better job.”