V-Marketing Forum, LVMH takes the stand

I passed through security gate. Went to the lounge. Took out my computer to start to etch out what I learned, heard and saw at the V-Marketing forum in La Rioja, where I had just delivered my appeal for the region to get into rehab, kick the adjunct and alcohol habit. But reaching into my bag I realized it happened again. By beloved compter did it's stray dog act. Gone missing. Again? After racing through the airport, and a round trip to security, the silver bullet was retrieved. My heart resumed its normal pace. I think the world is trying to tell me something, or maybe I was distracted because of the juicy, limpid, other worldy, fresh waterfall with plenty of tangerine marcona almonds 1968 Lopez de Heredia blanco I had in San Sebastian last night---but more on that later. BELIEVE IT OR NOT Computer in lap and all well with the world at least for a few minutes, I tried to make sense of the afternoon I spent at the Logrono wine marketing forum. This was a pretty special event. Most of the time panels are mild mannered, everyone on best behavior, telling the audience what they already know. But at this one? Opinions were diverse, explosive and sometimes, also naive. As a warm up, Miguel Otero Toranzo,a marketing guy in the region, talked about seizing reasons for generating news. He related something that might be true, sounds true, but I haven't done my due diligence. He cited Bordeaux. He said the AOC plans to decrease carbon emissions by 15% in five years ( I said to my neighbor, did he mean 50%? No, he meant 15%). Hold on to your hats--they're going to use that to promote their Greeness. I think if I heard a rumor that Bernie Madoff was going to give every investor of his $50 to help ease the pain, I'd have a similar reaction. If you've seen the rampant usage of chemical in Bordeaux, you can see that 15% isn't even giving someone a tissue after a sneeze. Mr. Toranzo went on to point out that there is one Chateau who can't comply, but they will be helping a South African estate to go carbon neutral and so on their Bordeaux label, they will proudly claim how their helping the environment. This is a little like a Mafia boss who sends their son into the priesthood and expects to be sainted. That was just a warm up because the next guy up truly was the man with ideas. Director of Wine & Estates, LVMH, Xavier Ybarguengoitia. Dapper, direct, sometimes insulting, extremely prepared and quick minded, he came to help Rioja. I'm sure he thought that was his mission and message, and his message was brand. I am passing on of his comments. *Do you think someone in Shanghai knows where Rioja is? They have to find out where Spain is first. *Quality is not the reason connoisseurs buy wine. *People do not buy wine, they buy dreams. *We (LVMH) want the highest prestige. *We need profits way beyond what is considered normal in the wine business. *Create the Brand not the denomination origin. *Wine has to be easy to understand. *Most people are led by wine experts, this is the big problem. *Most consumers have no idea about wine, we must come to them with simplicity. Simplicity is essential. And then he projected two images: one of the Australian Cape Mentelle sauvignon blanc and the other a Bouchard Nuits St. George, Clos St. Marc. He proceeds to use the NSG as an example of derision, and of why Burgundy is doomed for failure. Does anyone out there reading this know the owner of Bouchard, Joseph Henriot's relationship to the other Bernie, Bernard Arnault? (# 3 in the series) Putting the Bouchard next to the Cape Mentelle, an Aussie, Margaret River winery owned by LVMH seemed like an insider joke, but a pernicious one. The current owner of Bouchard is Joseph Henriot who used to be with Bernie and broke off from the company, let's just say there was bad blood between the two men. So this director of LVMH uses a wine that JH owns as an example of what he views as the stupidity of the Burgundian label? But then Xavier was playing on his perceived provincialism of the Riojanians. Clos St. Marc is a monopole belonging to Bouchard. They have less than an Hectare. The production is tiny. I have no idea how many millions of bottles Mentelle makes. The situation is not analogous. But it is the same philosophy that is driving the EU, that wine needs to be dumbed down for the lowest common denominator. People inside of LVMH are aiming to take out real wine, or at the very least ridicule those who seek the real stuff out, and the wine team over at the EU seems to agree. It's like, you actually READ? But, what a waste of time that is. You try to make your own decisions? Here, let me tell you what to think. Much easier for you. Actually the philosophy is so similar I wonder if someone from LVMH is sitting on the EU wine advisory board. Xavier's point was that wine needs to be simple. Who else but an expert is going to know what that (burgundy) wine is? he asked. His next trick was to show how LVMH carves out special niches for their wines. He projected the Newton label which LVMH bought in 2003, when they made 95,000 cases. With great pride hs said in 2008 they produces 95,000 cases. 'At Newton,' he says. 'we PLAY with the concept of nature.' They frame Newton as a natural wine, good for the environment. They are proud that their boxes are bamboo, a detail that most in the room didn't quite get. He showed how they proclaim on the label how much of a % is given back to the environment (I don't know what this means). They orchestrate all of their wine events at restaurants with gardens. Then he reiterates 'You don't make a brand with a good product. You must have a concept.' For example, If Newton is about Nature, Cloudy Bay is about Purity. He finished up his talk by bringing the world back to the LVMH starship, Moet Champagne. He projected the models and the glamour and the dream used when marketing bubbles and I was reminded that the champagne group of LVMH probably makes more wine than Rioja produces. What Xavier forgot is if you don't produce billions of bottles, all you need to do is make great wine and find your niche. After all, what you spend in marketing, you could invest in respect to the soil and the wine and your consumer. Probably, LVMH would love to shift production to China, and when they demolish the AOC they will be able to grow cheaply over in Asia and bottle their Moet because after all, it doesn't matter, all that matters is branding. But Victor Pascual Artacho, president of the Consorzio of Rioja, was not so sure and he gave Xavier a piece of advice, 'With all due respect,' he said, 'never take the words Champagne off of your label.'