LVMH’s Moët & Chandon looks to pop the cork in China
Business school case studies are littered with examples of international brands moving into emerging markets in hopes that its products will appeal to the locals, only to see things crater. The Chevy Nova into South America is the easy slam-dunk example of how things can go awry. While McDonald’s has been a wild success in many parts of the world, with the golden arches rising up into the skies around the globe, Bolivia is the exception, having kicked Ronald McDonald and his big feet to the curb in a colossal failure.
In China, LVMH Moët Hennessy-Louis Vuitton is looking to push heavily into the market, but is adapting its products to appeal to the local palette for sweeter versions of its sparkling wines. While the land is there to grow the grapes — more than in France — and the wealth exists to afford the pricey beverage, local palettes might need some time to adapt — as the article states, this is a market that adds Coco-Cola to its sparkling wines to make them “drinkable”.
LVMH, like other wine and spirits makers, is counting on China to become a major growth market. After more than doubling its vineyard acreage since 2000, China has more land for growing grapes than France. China’s wine market will be worth 153.8 billion yuan ($22.3 billion), according to Euromonitor International. Since 2014 the joint venture has been producing a bubbly mix of chardonnay and pinot noir from locally grown grapes at its winery in Ningxia. To win over Chinese drinkers, the company is tweaking its traditional formula, says Davide Marcovitch, global president of LVMH subsidiary Chandon, which makes sparkling wines in Argentina, China, and other countries. “We are innovating for consumers who don’t like the traditional taste of Chandon,” he says.
Source: The Maker of Moët & Chandon Is Sweet on China – Bloomberg
