Type: Public Company
Address: Allée du Vignoble, Reims, F-51100, France
Telephone: (33 03) 26 06 45 45
Fax: (33 03) 26 06 44 25
Web: http://www.boizelchanoine.fr
Employees: 645
Sales: EUR 311 million ($429 million) (2006)
Stock Exchanges: Euronext Paris
Ticker Symbol: 4027068 BOZ
Incorporated: 1991 as Chanoine Champagne; 1996 as Boizel Chanoine Champagne
NAIC: 312130 Wineries; 424820 Wine and Distilled Alcoholic Beverage Merchant Wholesalers
SIC: 2084 Wines, Brandy & Brandy Spirits; 5182 Wines & Distilled Beverages
Boizel Chanoine Champagne S.A. is the second largest producer and distributor of champagne in the world, behind luxury products group LVMH. Boizel Chanoine, however, is entirely focused on its portfolio of champagne brands, making it the largest of the so-called pure-play champagne groups, which focus solely on champagne production. In 2006, the company sold nearly 21 million bottles of champagne. Boizel Chanoine operates as a holding company for its collection of champagne brands. These include Boizel, the leading French mail-order champagne specialist; Chanoine Frères and Burtin, both of which target the large-scale retail distribution channel; Philipponnat, Besserat de Bellefon, and de Venoge, all three of which are sold through the specialist retail channel; and Lanson, the group's largest brand and its main export brand. Boizel Chanoine also owns its own champagne vineyards, through subsidiary Alexandre Bonnet. Another subsidiary, Champenoise des Grands Vins (CGV) acts as champagne purchaser and distributor for third-party champagne labels. Boizel Chanoine is listed on the Euronext Paris Stock Exchange. Bruno Paillard, founder, chairman, and chief executive, leads the company, and also owns his own champagne house (not included in the Boizel Chanoine group). In 2006, the company posted revenues of EUR 311 million ($429 million).
Starting a Champagne House in 1991
Champagne grower Bruno Paillard joined with Philippe Baijot to found a new champagne distribution company in 1991. Baijot had previously been a director at Marne et Champagne, which, as holder of the Lanson brand and others, was at that time one of the leading names in France's champagne sector. Paillard and Baijot launched the new company through the acquisition of two existing companies. The first was Champenoise des Grands Vins (CGV), which specialized in providing wholesale purchasing and distribution services to the retail distribution sector, notably through the development of private-label champagnes for the supermarket groups both in France and abroad. The second company, Champagne Chanoine Frères, provided the company with its first champagne label. Chanoine Frères was a long-established name in the exclusive champagne sector, having been founded in 1730 in the village of Epinay. By the end of the 1990s, however, Chanoine Frères had ceased to operate.
The new company, named after Chanoine Frères, had relaunched champagne production under the Chanoine name by 1992. Paillard and Baijot then began scouting for other acquisition targets. The pair thus played a role in the rapidly developing consolidation of the champagne sector whereby a small number of large-scale production champagne houses emerged. These champagne houses maintained their own vineyards as a point of prestige, but they still needed to buy grapes from independent growers, and so the Champagne region's famed vineyards remained controlled by a large number of growers.
In 1994, Chanoine reached an agreement with Champagne Boizel, owned by the Roques-Boizel family, to acquire a majority stake in that famous brand. Boizel had been founded in 1834 by Auguste Boizel in the village of Epernay. By the middle of the 19th century, Boizel had become a leading export label. England became a major market for the champagne house, especially after 1887, when the company signed an exclusive contract with wine seller Hedges & Butler.
The third Boizel generation took over in 1920, and further expanded the company's export sales. Boizel also became one of the first in the region to introduce a Blanc de Blancs during this time. The company was forced to rebuild after World War I, and by the early 1960s had introduced a new vintage, called Joyau de France. Another generation of the Boizel family took over as head of the business under Evelyn Roques-Boizel and her husband Christophe.
Under their leadership, Boizel adopted a new distribution model, targeting the direct-mail channel in 1984. The company set up a toll-free telephone service--unusual in France--and quickly succeeded in becoming the leading direct-sales champagne brand.
Boizel recognized the opportunity to join forces with Paillard, a family friend, selling majority control of the family business to Chanoine Frères. By 1996, the families had agreed to transfer full control of Boizel to Chanoine, which then took on the new name of Boizel Chanoine Champagne. The Roques-Boizel family continued to direct the operations at the Boizel champagne house, while taking seats on Boizel Chanoine Champagne's board of directors.
Going Public in 1996
Following the merger with Boizel, the company went public, listing its shares on the Paris bourse in 1996. Boizel Chanoine had by then entered the top ten among the leading champagne companies. However, with revenues equivalent to EUR 30 million, and sales of approximately four million bottles--out of more than 250 million total--the company remained modest in size.
Paillard and Baijot had greater ambitions for the company. The public offering enabled the company to raise the capital to launch the next phase of its expansion strategy. The company then sought to develop a broader portfolio of champagne brands, targeting the sector's different distribution channels.
Acquisitions again formed a major part of the group's growth plans. In 1997, the company made its next purchase, of Champagne Philipponnat from drinks group Marie Brizard. That label traced its roots back to 1522, when the first champagne under the Philipponnat name was created in the village of Ay. At the end of the 20th century, Philipponnat had become a leading label in the upscale champagne segment, distributed through the specialist retail sector as well as through the restaurant sector. The purchase not only gave the company its own vineyard--the prestigious Le Clos des Goisses--but also gave it a distribution subsidiary, Philipponnat-Les Domaines Associés, which distributed the Domaines Barons de Rothschild (Lafite) label in France.
The next piece of the Boizel Chanoine puzzle fell into place in 1998, through the acquisition of Champagne Venoge, based in Epernay, which as part of the Rémy Cointreau drinks group had focused on the specialized retail channel. Venoge had been founded in 1837 and had built up a strong international reputation, both in Europe and abroad.
While the Venoge acquisition provided the company with a new prestigious label and significant reserves, the company remained hampered by the limited area of vineyard under its control. The late 1990s had seen a major shift in the champagne sector as the demand, particularly international demand, surged during the decade. The strictly limited Champagne region, however, meant that there was a finite amount of available champagne grapes. With growing demand and limited supply, grape prices soared, leaving land-poor groups such Boizel Chanoine highly vulnerable to these price fluctuations.
Preparing for the Millennium Effect
With its survival at stake, Boizel Chanoine continued to seek new acquisitions. Relief came with the purchase of Maison Bonnet and its Alexandre Bonnet label in 1998. Bonnet was the youngest of the group's champagne houses, dating its origins to the pre-World War I era. The Bonnet purchase not only provided Boizel Chanoine with a strong traditional retail label, it also gave the company control of 65 hectares of vineyard in the area known as Les Riceys. Bonnet also brought Boizel Chanoine a strong reserve of more than one million bottles.
This latest acquisition placed Boizel Chanoine in strong shape to meet the so-called Millennium Effect--the expected surge in champagne sales in preparation for the celebration of the start of the new millennium. By the end of the 1990s, the company had succeeded in positioning itself as the world's seventh largest champagne group, with sales of more than 5.35 million bottles, worth EUR 69 million ($50 million) by the end of 1998.
The company had succeeded in boosting the vineyards under its control--either owned outright by the company or producing under contract--by more than 670 hectares. At the same time, Boizel Chanoine had continued to develop its strategy of broadening its distribution network. As part of this effort, the company sought to fill a gap in its portfolio by creating the Chanoine Tsarine label in 1997. The new champagne label enabled the company to gain a new place on supermarket shelves in the "affordable luxury" price segment.
New Opportunity in 2005
During the early years of the new century, Boizel Chanoine continued to make inroads toward building up its distribution network. The company registered strong sales increases, building up a sales volume of more than seven million bottles by 2004. The steady demand, particularly from such emerging markets as China, India, and the Middle East, helped sustain high prices. The company's revenues climbed to more than EUR 93 million by 2005.
Up to that time, Boizel Chanoine remained a second-tier player, unable to fully compete with such prestigious rivals as Moët et Chandon, Pommery, Dom Perignon, Laurent-Perrier, and Piper Heidsieck. In comparison to Chanoine's seven million bottles, sector leader LVMH's volume neared 60 million bottles, while number two Vranken Pommery topped 20 million bottles. Nevertheless, Paillard remained determined to raise his company's profile.
Opportunity knocked at the end of 2005 amid the disastrous fortunes of Marne et Champagne, which controlled the Lanson label. Marne et Champagne had been founded in the 1920s by Gaston Burtin as a wine wholesaler. The company then began purchasing white wines and began assembling its own champagnes, developing a range of types that were marketed under a number of different labels.
Burtin recognized the opportunity presented by the rise of the supermarket sector in France, and became one of the first to begin supplying champagnes for the discount and private-label segments. By the end of the 1980s, the company, Maison de Champagne Marne & Champagne, had grown into one of the sector's largest, with a stock of some 45 million bottles in its cellars.
In the early 1990s, however, Marne & Champagne, led by Burtin's nephew-by-marriage François-Xavier Mora, adopted a new strategy of developing its own in-house brand portfolio. As part of this strategy, the company made its first acquisition in 1990, of Besserat de Bellefon, a champagne producer founded in 1843, for the equivalent of $30 million.
Marne & Champagne made an even larger acquisition the following year, paying LVMH more than $150 million for the Lanson champagne house. Founded in 1760, Lanson had grown into one of the leading champagne labels, with a particularly strong presence in the export market. The Lanson acquisition not only gave Marne & Champagne a prestigious brand, it also added stocks of more than 30 million bottles. However, the company had failed to negotiate the purchase of Lanson's vineyards, which remained under LVMH's control.
The lack of foresight in ensuring control over its grape supply cost the company dearly as grape and wine prices soared during the 1990s. At the same time, Marne & Champagne incorrectly read the market--which had increasingly moved upscale during the decade--and instead had attempted to position the Lanson brand toward lower-priced categories. Heavily indebted at the beginning of the 21st century, Marne & Champagne faced collapse by 2004. The company was rescued by the Caisse Nationale des Caisses d'Epargne, which provided a bridge loan of EUR 310 million in exchange for a 44 percent share of the company.
Number Two in the 21st Century
Caisse Nationale announced its intention to sell Marne & Champagne in 2005; by the end of that year, after other potential buyers backed out, Boizel Chanoine gained control of the company, including its Lanson label and other brands.
The acquisition of Marne & Champagne--subsequently renamed Maison Burtin--catapulted Boizel Chanoine into the champagne industry's second place, tripling its revenues past EUR 311 million and boosting its sales volume to nearly 21 million bottles. In this way, Boizel Chanoine Champagne claimed a market share of more than 6.5 percent.
The acquisition of Marne & Champagne was viewed as a highly risky move, as it raised the company's debt past EUR 400 million. At the same time, the company lost a number of important supply contracts. With its total acreage under contract reduced to just 1,200 hectares, the company appeared at risk of being unable to sustain its production volume.
However, Boizel Chanoine quickly set to work restructuring its new holdings. In particular, the company began repositioning the Lanson brand into the higher-priced segment. At the same time, the company began extending its other champagnes into higher-value segments. Through 2006, the company carried out a further restructuring, simplifying its operations into six primary champagne houses, along with its small CGV subsidiary.
Lanson's strong international business, which accounted for 72 percent of the label's sales, provided an opportunity to raise the export profiles of the company's other labels. For this the company turned especially toward its largest domestic label (after Lanson), Champagne Chanoine Frères, and its successful prestige label Tsarine. With sales expected to near EUR 370 million at the end of 2007, Boizel Chanoine Champagne had placed itself at the center of the world's most prestigious wine market.
Principal Subsidiaries
Champagne Boizel; Champagne Chanoine Frères; Champagne de Venoge; Champagne Lanson; Champagne Philipponnat; Champenoise des Grands Vins, SA; Groupe Charmoy; Lanson International UK Ltd.; Maison Alexandre Bonnet; Maison Burtin; Vignobles Alexandre Bonnet.
Principal Competitors
LVMH; Vranken-Pommery Monopole; Laurent-Perrier S.A.; Lombard et Medot S.A.; Pol Roger & Compagnie S.A.; Yantai Changyu Pioneer Wine Company Ltd.; Schlumberger AG; Jeanjean S.A.; Sektkellerei J.Oppmann AG.
Further Reading
"Boizel Chanoine Sees H1 Profit Hit by Acquisitions," just-drinks.com, September 25, 2007.
"Boizel Chanoine Sees Q3 Sales Rise," just-drinks.com, November 7, 2007.
"Boizel Chanoine Toasts Burtin, Lanson Buys for Strong H1," justdrinks.com, August 21, 2007.
"Boizel Sales Triple After Burtin, Lanson Buys," just-drinks.com, February 13, 2007.
"Boizel Secures Lanson Deal," just-drinks.com, December 23, 2005.
"Bouyant Boizel Sounds Note of Caution," just-drinks.com, April 19, 2006.
"Corks Pop at Champagne Minnow After Lanson Deal," Evening Standard, December 22, 2005, p. 24.
Fallowfield, Giles, "Paillard More Keen on Own Brands Than Own Label," just-drinks.com, March 14, 2006.
Hollinger, Peggy, "Boizel Celebrates Lanson Acquisition," Financial Times, December 23, 2005, p. 18.
"Lanson Buy Weighs on Boizel Profits," just-drinks.com, October 24, 2006.
Sage, Adam, "Lanson Hopes to Toast New Deal As Suitors Walk Away," Times, December 14, 2005, p. 45.
— M. L. Cohen
