Taittinger S.A.

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Taittinger S.A.

9, Place Saint-Nicaise
51100 Reims
France
Telephone: +33 03 26 85 45 35
Fax: +33 03 26 50 14 30
Web site:http://www.taittinger.com

Public Company
Incorporated: 1734 as Forest Foumeaux
Employees: 7,712 (2000)
Sales: EUR 816.05 million (2000)
Stock Exchanges: Paris
Ticker Symbol: TTT
NAIC: 312130 Wineries; 422820 Wine and Distilled Alcoholic Beverage Wholesalers; 721110 Hotels (except Casinos) and Motels; 522210 Credit Card Issuing

Reputedly James Bond’s favorite brand of champagne, regularly recognized in such publications as Wine Spectator, Vintage, Vogue, Wine World, and The New York Times, Taittinger S.A. is one of the most recognized brands of champagne in the world, and its vineyards cover almost 650 acres of prime winemaking country. That’s is partly due to market savvy—Taittinger was the first champagne house to engage in commercial advertising, and with the Artist Collection series, the company has clothed fine vintages in the work of some of Europe’s most distinguished modern artists—and partly due to the production of award-winning champagne. With Taittinger’s diversification, primarily via the Société du Louvre, into hotel ownership and management, fine crystal, perfume, and other industries, the company name has become associated with luxury.

Taittinger S.A. is also, thanks in part to this diversification, one of the 250 largest enterprises in France. With the establishment of its American subsidiary, Domaine Carneros, in 1987, Taittinger has become a truly international concern. Despite this and the fact that the company is publicly traded in France, it remains in many respects an old-fashioned family venture: Claude and Pierre-Emmanuel, respectively the son and grandson of the company’s founding father, are senior executives, and other members of the family are in senior management in the Société du Louvre. Under the direction of Claude Taittinger, who took over leadership of the company in 1960, Taittinger’s distribution expanded to 120 markets outside of France.

An Ancient History

Although the Taittinger family came into winemaking only in the twentieth century, the company built itself on deep roots. The Taittinger cellars were established in Reims, the heart of champagne country; many other houses, including Piper-Heidsieck, Louis Roederer, and Ruinart, were established there. In the thirteenth century, the land belonged to Saint-Nicaise Abbey. Here the Benedictine order cultivated grapes and manufactured wine, in keeping with the order’s emphasis on manual labor. Winemaking was common in the region, and Saint-Nicaise was only one of several abbeys engaged in the occupation. Although the French Revolution ended the abbey’s winemaking activities and destroyed the abbey itself, the same land was later acquired by Taittinger and became the site of the company’s main cellars and home office.

The company that would later become Taittinger was established in this region in 1734. Jacques Fourneaux founded the third champagne house in the country; by 1931, the firm was known as Forest, Fourneaux, et Cie and was acquired by Pierre-Charles Taittinger. The Taittinger family left the region of Lorraine in 1871 and settled near Paris. Pierre-Charles, who already ran a champagne distribution and export business, was stationed in the Champagne region from which the variety of wine draws its name during World War I. In addition to the company, he also purchased the Chateau de la Marquetterie and its surrounding vineyards, as well as the palace of the Comtes de Champagne, located in Reims. Despite the fact that the business has acquired such traditional trappings, however, the Taittinger house has been determinedly twentieth century in its outlook.

From the beginning, Pierre-Charles Taittinger set out to create a champagne that was not only distinctive—a prescient example of branding—but that also fit with rising trends in cuisine. A notable gastronome (his son Claude created the Pierre Taittinger International Culinary Prize in his honor in 1967) Taittinger predicted a tendency toward lighter, more delicate fare, and crafted a champagne to match. With the assistance of chef Fernand Point, he metamorphosed champagne from a dessert drink to one suitable for any course.

The Next Generation

It was with the accession of Claude Taittinger, son of Pierre-Charles, to the directorship of the company that Taittinger’s business and reputation expanded, beginning the firm’s rise to become one of the world’s best-known champagne producers. Although he had assisted his elder brother Francois in the management of the company, the death of Francois in an automobile accident in 1960 put Claude in the driver’s seat.

The younger Taittinger had already done much for the family firm, notably creating the Comtes de Champagne Blanc de Blancs, a chardonnay champagne that remains one of the company’s flagship wines. It is also, despite what the films may indicate, reputed to be James Bond’s favorite vintage, according to Ian Fleming’s novel Casino Royale. This champagne, in keeping with the distinctive lightness and delicacy that Pierre-Charles Taittinger had already caused to be associated with the family name, did much to enhance the company’s reputation. Prior to World War II, the fashion in champagne was for heavy, sweeter taste, so the Blanc de Blancs represented a radical shift.

In the 1950s, however, other expansions were already under way. Taittinger had already taken over the old cellars of the Saint-Nicaise Abbey for the company’s own use, but rising production made it necessary to enlarge the cellars. During the construction, Taittinger unearthed perhaps a few dozen empty bottles in the older, potbellied style used by the Benedictines in bottling champagne. Taittinger adopted the design for its Comtes de Champagne line.

While respecting tradition, however, Claude Taittinger was not blind to the commercial possibilities of the twentieth century. In 1963, Taittinger became the first champagne company to advertise its products, taking care to be as distinctive in its advertising as it is with its champagne. Claude continued to take active part in the company’s advertisements, designing posters as recently as 1988. (Such posters have lately been sought by collectors, particularly since legislation in France enacted in the early 1990s limits the advertising of alcoholic beverages.)

Claude Taittinger also created the Artist Collection Series, beginning with the 1978 vintage, which premiered in 1983, nominally for the purpose of commemorating the house’s 250^thanniversary. A sort of limited edition, the Collection Series was defined to consist only of vintage champagnes. Each bottle was swathed in modern artwork courtesy of a well-known twentieth-century artist; this sheath was then laser-sealed to protect the bottle’s contents from variations in light and temperature. The 1983 edition was done by Hungarian artist Victor Vasarely; other contributors have included surrealist Andre Masson, abstract artist Toshimitsu Imai, and even Roy Lichtenstein, who according to Claude “considered champagne to be the result of a collaboration between nature and human ingenuity.”

Diversification

It was also under Claude Taittinger’s leadership that the company diversified from its initial industry of winemaking, which as of the year 2000 comprised only twelve percent of the business. In 1954, Claude’s father, Pierre-Charles, acquired a stake in the growing hotel firm Société du Louvre, which had started out in 1855 as a department store next door to the recently constructed Grand Hotel du Louvre. By the 1970s, the Société had largely abandoned its retail activities in favor of concentrating on its luxury hotel business, grouped under the name Concorde. During the 1970s, the Société diversified its business into budget hotels, light industry, the Banque du Louvre, Annick Goutal perfumes and the Baccarat crystal company, but hotels continued to account for approximately two-thirds of the company’s business.

The Taittinger family was closely involved with all of these expansions. The Concorde luxury hotel group, founded in 1973, was established by Guy Taittinger, while Anne-Claire Taittinger became the head of the Société’s board of directors in 1997 and took over the Baccarat crystal company in the 1990s. To refurbish the crystal company’s somewhat dusty image, Anne-Claire set out to redecorate the Chateau de Baccarat in eastern France.“We made it very simple—but also very French because we are French,” she told CNN. The Concorde group included such luxury establishments as the prestigious Hotel de Crillon in Paris, whose Grand Bernstein suite—named for the famous composer—features his Plano, has more square footage than many suburban houses, and overlooks the Place de la Concorde. More than that, however, the entire hotel was designed to feature the opulent elegance that is associated with the Taittinger name. As Claude Taittinger put it: “I myself don’t have any sensitivity for equipping cars or making television sets, none at all, but I do have a feeling for what is nice, what is beautiful.”

However, Taittinger did not neglect the business for which it had primarily become known. In 1974, the company acquired the Bouvet-Ladubay winery, which was founded in the Loire Valley in France in 1851 and had since enjoyed a solid reputation for fine wines.

Taittinger has also expanded its operations into the United States. In 1947, Claude Taittinger visited northern California and, according to company legend, determined one day to settle there. In 1986, the company began a partnership with American importer Kobrand Corporation, which led to the establishment of the Domaine Carneros winery in 1989. As of 2001, Taittinger owned 83.4 percent of the company.

Company Perspectives:

Taittinger is recognized worldwide for producing some of the finest champagnes available. One of the last remaining family-owned and operated champagne houses, Taittinger can rely on 642 acres of its own prime vineyards to assure the consistently outstanding quality that is part of its long tradition.

Established in the region that bears its name, intersecting the Sonoma and Napa valleys in northern California, Domaine

Carneros covered 138 acres of prime wine-growing country. The vineyards produced pinot noir and chardonnay grapes, which are used in champagne production. However, Domaine Carneros sparkling wines did not bear the champagne appellation; Taittinger retained the tradition of only applying the label to wines that are actually produced in the Champagne region of France. Domaine Carneros also produced Pinot Noir red wines.

As with Taittinger’s production in France, Domaine Carneros used handpicked grapes from its vineyards, and only juice from the first pressing of the grapes was used to make the wine. The winery itself also reflected the company’s origins, with a chateau consciously modeled on Taittinger’s Chateau de la Marquetterie. Ever since its inception, Domaine Carneros produced well-regarded wines, including the Le Reve (”The Dream”) vintage cuvee, an homage to Claude Taittinger’s dream of a northern California establishment.

The New Millennium

Through the 1990s and into the new millennium, Taittinger sought both to remain a family-centered organization, and to compete in a modern, increasingly global environment. Although, as Claude Taittinger put it, “Champagne is a small world. We do not compete. We share quality and tradition,” the company faced a different kind of competition as the world moved toward a more global economy. In 1998, institutional investor Asher Edelman, who at the time owned an 11 percent stake in the Société du Louvre (Taittinger owned 36.6 percent), attempted to take control of the group and split it into three companies. The resulting conflict highlighted significant differences between American and European methods of doing business; as Jean Peyrelevade, chairman of Crédit Lyonnais, commented in the Wall Street Journal, “In France, a company cannot be reduced to the financial interest of shareholders.” Or as Jacques-Henri Bourdois, who managed a French organization of family businesses, put it, “It’s a face-off between two completely different worlds.” While Taittinger always emphasized the familial nature of the business, Edelman claimed that the company was seriously—and deliberately—undervalued, and that if the Société du Louvre were truly a family business, then it should not be publicly traded.

Key Dates:

1734:: Jacques Fourneaux establishes one of the first champagne houses in France.
1870:: The Taittinger family leaves its native province of Lorraine and settles in the vicinity of Paris.
1917:: Pierre-Charles Taittinger, a cavalry officer during World War I, visits the Chateau de la Marquetterie in the Champagne region.
1931:: Pierre-Charles Taittinger purchases what is now known as the Forest-Fourneaux Company, as well as the family house of the Counts of Champagne.
1932:: Pierre-Charles Taittinger purchases the Chateau de la Marquetterie that he visited during World War I.
1945:: Francois, Jean, and Claude Taittinger, all sons of Pierre, join the company.
1947:: Claude Taittinger visits the United States, particularly northern California.
1950:: While enlarging the underground structure of Saint-Nicaise Abbey in Reims, Taittinger discovers several empty bottles with a rounder shape than those used today, dating from when Benedictine monks occupied the land. The shape is used in the production of Comtes de Champagne cuvee.
1954:: Pierre Taittinger acquires a stake in Société du Louvre, which owns and operates a group of luxury hotels.
1955:: Pierre Taittinger becomes managing director of the Société du Louvre.
1956:: Claude Taittinger creates the Comtes de Champagne Blanc de Blancs.
1960:: Francois Taittinger is killed in an automobile accident; his brother Claude takes over leadership of the company.
1963:: Tattinger is the first champagne house to advertise its products.
1967:: Claude Taittinger establishes the Pierre Taittinger International Culinary Prize in honor of his father.
1978:: Claude Taittinger develops the Taittinger Collection, a series of specialty bottles designed by various artists.
1983:: Hungarian artist Victor Vasarely creates the first bottle in the Taittinger Collection.
1987:: Taittinger founds the Domaine Carneros winery in northern California with the assistance of its United States importer, Kobrand.
1989:: Taittinger acquires a 10 percent interest in Euro Disneyland SNC.
1991:: Taittinger increases interest in La Distilleries Dalaruan (Scotland), Domaine Carneros (California), Baccarat, Porcelaines Haviland, L’Orfevre Odiot, Faienceries de Gien, and Parfums Annick Goutal. Taittinger also acquires Société Samazeuilh (Bordeaux) and Maison Garres-Fourche.
1992:: Taittinger increases interest in Baccarat.
1993:: Taittinger establishes Société Saint-Evremond, a producer of champagne.
1997:: Anne-Claire Taittinger becomes CEO of the Société du Louvre.
1998:: Société du Louvre decreases interest in the Banque du Louvre, and disposes of all interest in Porcelaines Haviland. Investor Asher Edelman seeks a controlling stake in the Société du Louvre.
1999:: Taittinger issues a commemorative millennium edition champagne.
2000:: Edelman’s attempt to reduce Taittinger’s voting rights in Société du Louvre is rejected by Paris courts.

Similarly, another investor, Guy Wyser-Pratte, who at the time owned a 13 percent stake in Taittinger itself, was also determined to focus less on patrimony and more on profit. “The Taittingers operate for the benefit of the family,” Wyser-Pratte observed in the Wall Street Journal. “That’s not what modern-day capitalism is all about.” Anne-Claire Taittinger, who at the time had been at the helm of the Société du Louvre for less than two years, acknowledged that both Taittinger and the Société were family affairs, but denied that this would be bad for either business, or for either company’s shareholders. And Claude Taittinger said: “I don’t cheat; I tell that to shareholders. We’re a safe investment, a sort of savings bank. There should be room for different sorts of companies on a stock market.” He also said, in 1998, “I run the company as a family company. If these people want immediate returns, maybe they should buy computer-company stocks.”

In fact, all of the divisions of the Société du Louvre have traditionally been led by members of the family. This occasionally led to some business decisions that would be a surprise in America, such as the Société’s retention of light-industry company Deville, which has generally been a financial loss for the group. However, it became part of the Société when Jean Taittinger married Corinne Deville, and Jean was loath to abandon it. However, when Anne-Claire Taittinger succeeded to the Société’s directorship in 1997, she began to increasingly emphasize the group’s bottom line. Even so, Claude Taittinger firmly stated the family’s point of view to Wine Spectator in early 1999: “I am absolutely convinced that Taittinger and Société du Louvre will remain for many years under the control of the family. Business is very good.”

The conflict escalated, eventually coming before the Paris courts as Edelman attempted to reduce the Taittinger family’s voting rights in the Société du Louvre. The court rejected the request, and both Edelman and Wyser-Pratte retreated, selling part of their stakes in their respective investments. However, Anne-Claire Taittinger’s disagreement with Edelman had less to do with the importance of profits than with how profits should be made, and even while the battle raged, she took steps to streamline the company. These included unloading a small heating company called Leblanc, which did not quite fit with the company’s luxurious image, and diversifying Baccarat’s product lines to turn the company profitable.

Looking Forward: 1999 and Beyond

Of course, Taittinger did not merely see in the new millennium by fending off corporate raiders from the United States. In late 1999, the winery released a special, limited-edition millennium vintage, which received good reviews and retailed for $175. That was pricey, but as the demand for champagne increased, it seemed as though higher prices for good quality were justified. Claude Taittinger opined that “There’s been an extraordinary expansion, a fantastic prosperity” in the champagne business overall. That opinion, ventured in 1989, seemed equally true a decade later.

The company continued to look forward, not only in terms of its business, but also in terms of handing over the reins to the next generation of Taittingers. Claude Taittinger turned 72 in 1999, although he did not seem to slow down. Family luncheons, such as one detailed by Mary Blume in Food & Wine, served not only as convivial clan gatherings, but as a chance for younger family members to develop the nose and taste required to recognize and produce fine champagne. At such gatherings it has been Claude’s practice to “try to develop even among the youngest a certain interest in wines.”

At the same time, Taittinger also continued to delve, however tastefully, into commercial branding. This ranged from sponsorship of the Tony Awards—and a gift basket for each nominee—to being named the “official champagne of the Original Avengers” when A&E Home Video re-released the TV episodes of the British spy series to coincide with the 1998 theatrical release of the Avengers. The company also worked with Kobrand, its United States partner, to create champagne-tasting events that combined with another luxury pastime: shoe shopping. Name designers, such as Vera Wang, were invited to create new shoes for a New York Taittinger tasting, after which the new designs were distributed to tony retailers around the United States, premiering at similar events in several cities.

Having weathered the storms of corporate economics, solidified both its business and its family base, and introduced a new vintage to celebrate the millennium, Taittinger entered 2001 on a distinct high note.