A Bubbly Glocal Strategy for Moet: Well done Monsieur Arnault !

(More wine news on www.vitabella.fr) Moet, 66 percent owned by luxury goods group LVMH, has just announced plans to grow grapes for a "high-end sparkling wine" in Northwest China together with farm operator Ningxia Nongken. Moet Hennessy, makers of the flagship bubbly Moet Chandon and Dom Perignon champagne, the world's biggest champagne maker, said it will produce the bubbly at a winery it plans to build nearby the 66-hectare farm. This announcement was made just 3 months after Moet said it was buying grapes in India's wine heartland Nashik.

"Nothing new!", some would say. Roederer or Moet have already done the same in the USA about 30 years ago, and now sell their bubbles under US brand names (Roederer Estate, Chandon). True... but those champagne producers were already selling their bottles for a long time in US. Regarding Asia, it seems that this "glocal" strategy starts at a very early stage on both markets. In fact, in terms of sales progression, much earlier than in the United States of America. In Asia, Moet understood that a glocal approach was necessary to develop sales, more particularly in China or in India. And selling to chinese or indian consumers does not mean only selling on their national market. Think about all those who are living outside their country and who are eager of national products.

This strategy reminds me of Hermes, the successful luxury company in which Bernard Arnault has recently invested. Hermes' strategy to reach a bigger market share of the promising chinese luxury market is simple: Going glocal instead of going global. A few months ago, Hermes has launched a new brand, called Shang Xia (meaning “topsy-turvy” in Mandarin), in the lucrative Chinese market. Shang Xia includes ready-to-wear and decorative arts inspired by Chinese culture and traditions of craftsmanship. They are made using Chinese raw materials and artisanal know-how. This new brand is tailored for the Chinese market where Hermes lags behind its competitors. This move is not a matter of producing and offering cheaper products to the chinese markets. In fact, this move is about offering an alternative for chinese consumers to Hermes products. As China's tradition is anchored into a long history of talented artists who are appreciated by the entire nation, this move will certainly make Hermes even more successful in the future.

Moet adopted the same glocal strategy by investing locally to produce bubbles in two huge markets. But size is only one aspect as India and China share a same cultural aspect when it comes to wine: both have a tradition of growing grapes and making wine. For luxury wines, selling globally is essential and having your wine brand marketed internationally is key. This is the Global approach. Moet, like Hermes, decided to go differently and have set up plans for a powerful glocal approach. In fact, some Chinese consumers for luxury products have developed a taste for Champagne. A locally produced alternative thanks to a joint venture by leading French producer Moet Hennessy with a Chinese agricultural company will certainly attract a new range of consumers. A same approach was defined in India. Global luxury group LVMH's company Moet Hennessy has crushed about 150 tonne of grapes as it looks to come out with locally produced sparkling wines. With Moet, the glocal or "Shang Xia" approach is making progress in the world of fine wines. And it will certainly prove successful. Well done Monsieur Arnault !

(More wine news on www.vitabella.fr)