20 Minutes With: New Krug Champagne President Manuel Reman | Kanebridge News
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20 Minutes With: New Krug Champagne President Manuel Reman

By Shivani Vora
Tue, Nov 22, 2022 8:34amGrey Clock 4 min

Founded in 1843 in Reims, France, Krug champagne is one of the most prestigious and sought-after wines globally. A price for a bottle ranges from US$210 for a Grand Cuvee, the non-vintage label that it recreates every year, to US$2,799 for Clos d’Ambonnay, a vintage that’s produced from a single plot of pinot noir grapes.

This year, Krug appointed a new president, Manuel Reman, who, at 44, is one of the youngest presidents in the brand’s history. He joins the company at a time when sales are at an all-time high, and the house can’t produce enough champagne to meet the demand. “We sold out of bottles everywhere last year, which has never really happened before,” Reman says. Despite its visibility, he points out that Krug is a small label that produces just 0.1 percent of the world’s champagnes from its 200 acres of vineyards—Moet Hennessy, in comparison, commands 15,000 acres. It’s also still run like a family house: Olivier Krug, the sixth generation Krug, is a director and heavily involved.

With sales soaring, Reman’s biggest mandate in his role is to maintain the champagne’s quality and not make radical changes to a formula that’s already working. But while he might be a newcomer to Krug, Reman has worked at its parent company, LVMH, for nearly two decades in various roles including as chief of staff for Moet Chandon’s CEO. Even before starting in the industry, however, appreciating wine—its terroir, body, and taste—was his longtime hobby that he pursued by joining wine clubs in Paris.

Reman recently spoke with Penta from Krug’s headquarters in Reims about the brand’s future, attracting new audiences, and his favourite ways to enjoy the perfect glass of bubbly.

PENTA: Krug is already a well-established brand. What is your vision for the company as its president?

Manuel Reman: There might be a lot of Krug fans, but we need to diversify who drinks our champagne. Currently, it’s enjoyed mostly by serious oenophiles, but we want to attract people who aren’t wine connoisseurs yet appreciate a great glass of champagne.

How has Krug changed since it was founded in 1843?

The taste profile of the champagne hasn’t changed. The toasted bread, spices, and orange marmalade that were characteristics when we were founded in 1843 still define our taste today. What has changed is the production process itself. We still ferment in oak barrels, although many champagne makers have switched to using stainless steel tanks. However, we now store our reserve wines in stainless steel, which keeps them fresher for longer. We usually stick with tradition but use modern techniques when it makes sense.

How does Krug differentiate itself from other luxury champagnes?

Most release only vintage champagnes which express the grape production of a particular year. Krug has vintages too, but we also release a Grand Cuvee—our non-vintage—every year that’s a blend of nearly 200 different wines produced in different years and from different grapes and regions.

Where are your biggest markets, and what areas are up-and-coming?

Japan, by far, is the biggest and has been for nearly 20 years. Nearly one out of every three bottles of Krug that is produced is consumed in Japan. It became popular there because Olivier Krug [the sixth generation of the Krug family and the house’s director] spent three years in Japan working on brand awareness.

After Japan, the U.S. is the biggest, although we’re only big in five markets: New York, Los Angeles, San Francisco, Texas, and South Florida. We’ve barely scratched the surface in the U.S., and part of the reason is that we don’t have enough bottles to sell.

In terms of up-and-coming markets, we’re seeing a lot of new drinkers in South Korea. Many high-end restaurants have opened in Seoul in recent years, and these places are carrying Krug. Germany and Italy are also newer markets for us and gained traction during Covid. The duty-free stores in the airports where Krug sells bottles were closed so we reallocated them to these countries, and people got to know about the brand.

There’s been a lot of press about the champagne shortage during the pandemic. What’s the reason behind the shortage, and how is Krug dealing with it?

People were home during Covid and started to consume champagne at home instead of saving it for a special occasion at a restaurant. They weren’t spending their discretionary income on traveling or going to restaurants and had a budget to spend on luxury items at home. Champagne fit into that trend.

Krug is dealing with the shortage by trying to make sure that our distribution is even in various markets and across restaurants and retailers. We are also asking retailers to limit the amount that customers can buy. What we don’t want is for any one person to buy a large number of bottles to keep or to resell.

You’re a proponent of the brand being about more than just drinking champagne. Can you explain what you mean?

I’m of the view that Krug needs to be an experience, not just a sparkling wine. For example, the Krug family house is in the village of Reims in the Champagne region, and we invite people to visit it for meals and tastings. The way we do our tastings is unique: We pair each champagne with a different music composition. We commission music from musicians all over the world and ask them to compose short songs for us based on the creative inspiration they get when they drink our champagnes. It could be classical, jazz, pop, or anything. We play their compositions while visitors drink our various champagnes. Chloe Flower, a classical pianist from the U.S., is one example of a musician we have collaborated with.

We also give private tours of our vineyards and cellars for people who schedule in advance. You can even spend the whole day in the fields appreciating the landscape, the greenery, the sounds of the birds, and just being outside.

Any tips for budding champagne collectors?

Know that champagne can age beautifully, but you need to store it away from the light and in cool temperatures. I also suggest buying champagnes from a diversity of brands, from small growers to well-known labels, because there are so many styles, and a collection should always have a mix. Once you find a champagne that you love, buy as much of it as you can. The scarcity issue isn’t going anywhere, especially with climate change and unpredictable harvest conditions. Follow your taste, not any rules about what champagne you should and shouldn’t own.

What advice can you share for enjoying the perfect glass of champagne?

First of all, please drink it in flutes. Champagne is a wine and should be drunk in a white wine glass. People started using flutes to see the effect of the bubbles rising from the bottom to the top, but they’re like listening to a concert with earplugs—the shape of the glass mutes the taste.

And, never wait for a special occasion to drink. Pop a bottle anytime, even on a Monday night dinner at home. What you’re celebrating is the champagne and the connection you have with the person you’re drinking it with.

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Sales of the cosmetic product are a bright spot in an otherwise bleak discretionary-goods environment

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Masks off, lipstick index on.

In a gloomy economy, consumers might cut back on other discretionary purchases but will keep shelling out for small luxuries such as lipstick—or so goes the theory. “When lipstick sales go up, people don’t want to buy dresses,” Leonard Lauder, then-chairman of Estée Lauder who is widely credited for coming up with the so-called “lipstick index,” told The Wall Street Journal in 2001.

L’Oréal Chief Executive Nicolas Hieronimus called this out during the company’s earnings call in October, noting that a luxury lipstick or mascara is only €30, making it an “affordable treat.” Sales at L’Oréal rose 9.1% in the third quarter compared with a year earlier despite slower sales in China due to Covid-related lockdowns. Coty, maker of CoverGirl makeup, said organic sales grew 9% over the same period.

Beauty sales have also been a rare bright spot for retailers: Target said beauty category sales grew roughly 15% in its quarter ended Oct. 29 compared with a year earlier, with Ulta Beauty shops in Target tripling their total sales volume over that period.

While Macy’s namesake stores saw comparable-store sales decline last quarter, its beauty-focused Bluemercury chain saw same-store sales grow 14% last quarter compared with a year earlier. Kohl’s locations with Sephora are outperforming the rest of the department-store chain.

Of the 14 discretionary categories that market research firm NPD Group tracks, prestige beauty—products you might find at a department store or a Sephora—is the only category that is seeing unit sales growth year to date. And lipstick, which suffered during the masked-up pandemic, is making up for lost time.

Lipstick sales have grown 37% through October this year compared with a year earlier, according to Larissa Jensen, beauty industry analyst at NPD Group. That is an acceleration from the 31% growth seen during the same period last year. Lip product is the only major category within prestige beauty where sales are actually up compared with pre-pandemic levels, according to Ms. Jensen.

Cosmetic companies have also called out strong sales in fragrances, calling it the “fragrance index.” Demand has been so robust that there is an industrywide fragrance component shortage, Coty said in a press release announcing third-quarter earnings earlier this month. CEO Sue Nabi said during the call that Coty hasn’t seen any kind of trade-down or slowdown, also noting that consumers are shifting away from gifting perfume to buying it for themselves.

“A big piece of it is just a shift in what wellness means to consumers,” NPD Group’s Ms. Jensen said. “Beauty is one of the few industries that are positioned to meet [consumers’] emotional need. It makes them feel good.”

While the lipstick effect could be observed in the recession in the early 2000s, that wasn’t the case during the 2007-09 recession, during which lipstick sales declined alongside other discretionary purchases. Part of this might have had to do with category-specific dynamics.

There was a lot of newness in the cosmetic industry in 2001, including lip gloss, a relatively nascent category back then. That tailwind simply wasn’t there starting in 2008, though nail polish turned out to be consumers’ small indulgence of choice in that period. This time around, consumers may be eager to show off a part of their face that was hidden behind a mask for so long during the pandemic.

In an otherwise bleak environment for companies selling discretionary goods, those in the business of selling cosmetics look well poised to come out of the holiday season looking freshened up.

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