Playing To Win

Strategy & Sustained Innovation

75 Years of Innovation at Laurent-Perrier Champagne

Roger Martin
8 min readJul 1, 2024

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Source: Marie-Louise Skafte, 2024

I am always curious to see positive outliers in business and I am gleeful when I explore them and see evidence of bold strategy behind it, particularly if it involves real innovation. That happened at Laurent-Perrier in Champagne recently, so I decided to dedicate a Playing to Win/Practitioner Insights (PTW/PI) piece to it called Strategy & Sustained Innovation: 75 Years of Innovation at Laurent-Perrier. It seems that visiting champagne houses inspires me to write PTW/PI’s, as did last year’s visit to Champagne Paul Launois. All previous PTW/PI can be found here.

Faux Innovation

I am tired of hearing so many companies proclaim themselves to be innovation leaders when the vast majority are not. Most of them are doing things that are new for themselves but that others are already doing — which feels like innovation for them but really isn’t. For some of them, one innovation put them on the map, and they use the proceeds to buy companies that have produced a successful innovation — like Microsoft. For others, they spend like drunken sailors as a substitute for innovation — like Google.

Strategies featuring sustained innovation are rare. The rareness is obscured by the fact that successful companies can last a long time after ceasing to be innovative.

Sustained Innovation at Laurent-Perrier

Two weeks ago, my wife, Marie-Louise, and I visited Laurent-Perrier in the heart of champagne territory. We were excited to visit because its Grand Siècle premium champagne is our favorite champagne. It wasn’t because we knew the Laurent-Perrier story — because we didn’t! But we always strive to learn something new during our travels, and thanks to our terrific host, Thierry Durand, we certainly learned something new.

The innovation story started in 1948 when Bernard de Nanancourt took over the champagne house from his mother, an entrepreneurial and resilient widow (like my wife, named Marie-Louise) who ran the business until she was able to hand it over to one of her children. That was Bernard, a 28-year-old back from the war that killed his older brother. It was a small producer — at 80K bottles/year — in what was at the time a much, much smaller industry than today.

Now, 76 years later, it is the 5th largest champagne house in the world producing 7M bottles/year — a nearly 100 times growth over the period. It is exceptional in that it is the only one of the leading global champagne houses that is still family controlled. It is a paragon of high-quality champagne — including Grand Siècle (an homage to France’s ‘Great Century’), which ranks among world’s most prestigious champagnes.

Nanancourt started with a problem. His champagne house was too tiny to be relevant and the product of his industry had limited appeal at the time. While it was a novel product — sparkling wine created by a monk’s accident — its appeal was limited by its formulation and production process. The grapes of Champagne are very acidic — especially chardonnay, which has always been Laurent-Perrier’s most important grape. And, at the time, 100% of champagne was aged in oak barrels for the first fermentation (before the second fermentation in the bottle that produces the bubbles). The combination of oak and acidity produced a wine that was heavy and harsh in natural form. So, the champagnes of that era (and before) were heavily sweetened to cover up the harshness and were drunk largely as a form of sweet dessert wine. From a strategic standpoint, the industry shaped itself to mitigate its natural/historical downsides.

The profile was nothing like the champagnes of today, which are light and refreshing and pairable with many foods — or nothing at all! Its modern ubiquity is consistent with fashion icon Coco Chanel’s famous champagne quote: “I only drink champagne on two occasions: when I’m in love and when I’m not.

Production Process Innovation

Nanancourt did the opposite. He took advantage of the unique context. He didn’t try to hide the chardonnay backbone of his champagne behind a wall of sugar. And he scrapped oak barrels for stainless steel tanks (shown above) — sacrilegious in a hidebound, rule-based industry. And extremely bold. He would make champagnes that expressed freshness, elegance, and purity.

He led a revolution. Oak barrels didn’t disappear, but stainless steel became dominant in the 1950s and 1960s. And the level of sugar ‘dosage’ fell across the industry, leading to the fresh, dry champagnes of today.

But that dramatic, industry-altering production process innovation was only the beginning for Laurent-Perrier. There was a succession of product-based innovations.

Creation of Grand Siècle

The tradition in champagne, and by far and away the greatest portion of production, is non-vintage or ‘NV,’ which means it is a blend of wines from a number of years, sometimes dozens. The value of the technique is that it enables the champagne-maker to blend together many years from it prior-year reserves to keep the taste profile consistent across the years.

At the higher end, and therefore with smaller sales volumes, is vintage champagne, which uses grapes from a single year. Each champagne house determines which years have sufficiently high-quality grapes to label that year’s champagne as ‘vintage.’ Because it is made from one identifiable high-quality year, vintage champagne sells for a substantial premium over NV. For example, Veuve Clicquot Yellow Label, the iconic NV champagne from the world’s #2 brand, sells for $72 (if I use current average price on Wine Searcher — as I will for all subsequent prices) and their 2015 vintage (the latest excellent vintage) sells for $102 — a 42% premium.

However, the downside to vintage champagne is that no single vintage is perfect and vintage designation forces the champagne maker to forego all the benefits of blending multiple years in exchange for the prestige and price premium of the vintage designation.

Once again, in the face of this ubiquitous tradition, Nanancourt decided to innovate by leaning into reality, not attempting to moderate it. In 1959, he introduced Grand Siècle, which was a blend of wines from three years deemed by Laurent-Perrier as vintage. Until 2019, the years in the blend were not released publicly but the world now knows it has always been the most recent three vintage years featuring a heavier concentration of the most recent of the three vintage years. But the idea was to blend together three vintage years to simulate a perfect vintage year.

However, even though it contained 100% vintage champagne, by champagne rules, it couldn’t be called vintage because it wasn’t from a single vintage year. Hence, notionally Nanancourt was foregoing the huge vintage price premium. But this innovative approach produced such an exceptional champagne that substance won over formality, and it has become one of the most popular high-end champagnes in the world and signature of the house.

And that has translated into price. Veuve Clicquot’s flagship vintage champion, Grande Dame, one of the best-selling super-premium champagnes in the world, sells at $221 for the most recent vintage (2015), while the most recent Grande Siècle iteration (No26) sells at $262 — almost 20% more, despite being NV.

Creation of Rosé Champagne

Laurent-Perrier made another huge innovation splash in 1968 with rosé champagne. Traditionally, all champagne was white wine, even though two of the three champagne grapes are red (pinot noir and pinot meunier — chardonnay of course is white). Champagne doesn’t take on the hue of the red skins because the juice of red grapes (just like the juice of white grapes) is white and if it is separated from the skins promptly, it does not become tinted.

Nanancourt and his team mastered the process for allowing the juices from their champagne grapes to remain with the skins long enough to produce a rosé tint and some of the taste of the taste of the red grapes — the saignée method — and that launched Laurent Perrier Rosé. In due course, because Laurent Perrier Rosé was so successful, every major producer began offering rosé, but they utilized the much less complex process of blending the usual white wine with red wines from the champagne appellation to produce the rosé color. But by going first with a truly innovative solution, Laurent Perrier Rosé has become the best-selling rosé champagne in the world

Creation of Ultra Brut

The Laurent-Perrier drive for freshness, elegance, and purity led to another innovation in 1981, the release of Ultra Brut. Champagne’s official classification system specifies the amount of sugar added after second fermentation, just before the champagne bottle is corked. ‘Extra Brut’ requires that fewer than 6 grams/liter of sugar is added. ‘Brut’ requires fewer than 12 grams/liter, and so on up to ‘Doux’ at over 50 grams/liter.

Those were the categories until the release of Laurent-Perrier Ultra Brut, a champagne with no sugar added. Those in charge of the classification system had to add another category — ‘Brut Nature’ with fewer than 3 grams/liter. As with the other innovations, competitors were forced to follow Laurent-Perrier’s successful lead.

Creation of Blanc de Blancs Brut Nature

Over time, an increasingly popular champagne variety has become the ‘blanc de blancs,’ which is made with 100% chardonnay grapes. This would have been a natural for Laurent-Perrier because it is the most chardonnay-weighted of all major producers. But until 2019, Laurent-Perrier didn’t have a blanc de blancs in its portfolio and didn’t follow its competitors.

Instead, Laurent-Perrier spent 15 years of research and experimentation to create the world’s first Blanc de Blanc Brut Nature — an exceedingly difficult winemaking challenge due to the characteristics of the chardonnay grape, not yet copied by any significant competitor.

The bottom line is that Laurent-Perrier never stops innovating, even after achieving massive success doing what it is already doing. And our host Thierry assured us that there is more on the way. Sadly, Bernard de Nanancourt passed away in 2010, but the spirit of innovation continues with his daughters Alexandra and Stéphanie. The family has the heart of an innovator, and it is a lesson for all companies: leading is not a license to stop innovating. Cheers to Thierry for an informative and enjoyable hosting!

Practitioner Insights

Don’t work on creating an innovation. Work on being an innovative company. If your goal is to create an innovation, if you succeed in the task, you will likely rest on your laurels exploiting your singular innovation. If your goal is to be an innovative company, when you create an innovation, you will immediately ask: OK, what innovation is next?

But that takes a different attitude, a different culture. You have to be willing to stand alone — a term we heard often during our Laurent-Perrier tour. Every one of the innovations described above (and many others) required leaning into risk. Stainless steel tanks could have been a couple bust. Nanancourt had to go to an industrial tank provider to develop a completely new product for a new use. It could have all been an expensive flop. Grand Siècle might have never broken out of the lower price NV doldrums. Rosé champagne might have been an affront to champagne drinkers, and so on. That has to become your way of being, not something to stop doing once you have achieved success.

The most intriguing thing I learned in the visit that is a vector I will hereafter explore when I approach innovation is to not seek to compensate for negative things but rather lean into inherent strengths. Nanancourt didn’t want to continue to compensate for acidity and oaky flavoring by pumping the champagne full of sugar. Instead, he focused on a way to harness the natural features at his disposal for the best. I.e., get rid of the oak and figure out a way to convert acidic chardonnay (mainly) into a fresh, elegant, and pure champagne. Don’t accept the narrow taste profile of single vintages. Rather, create something special (Grand Siècle) that built on the variety in the features of multiple vintage years.

If you do these things, you will be an innovator, not the home of an innovation.

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Roger Martin

Professor Roger Martin is a writer, strategy advisor and in 2017 was named the #1 management thinker in world. He is also former Dean of the Rotman School.