“Bling bling”, “it sucks”, “a fad that will soon pass”… I heard people say so many things about Champagne Armand de Brignac when ‘Ace of Spades’ came out in 2006. Fast forward 15 years and Moet Hennessy (LVMH) has just taken today a 50% stake (as well as its global distribution) in this brand whose logo is a bronze ace of spades. The company’s estimated to have forked out over $150 million (based on a value of $310 million) to add this new gem to its portfolio of champagne brands.
There are two things to note at this stage:
1. There’s no such thing as bad publicity. Even negative opinions can boost a brand’s image, and though many might not agree, this example proves it once again.
2. Thinking that the best way to do in Champagne and wine is by delivering uniquely on the promise you make – The quality – is false in 2021. Why? Because new generations respond differently to brands, focusing on the aspirations, social value, and self-expression instead of the functional quotient of a product. LVMH well understands this, and that’s why Armand de Brignac was precisely the champagne brand the group needed.
An acquisition driven by the fact that, according to a recent article in Glossy magazine “Black-owned brands see influx of interest from luxury retailers”? No, this investment goes much further than that. What really influences the purchase of luxury items today is the desire for inspiration, self-expression, and aspirational goals. In 2018 in New York’s Playroom, Jay-Z, the owner of the Armand de Brignac brand since 2014, racked up a bar bill of US$91,135 for 20 bottles of Ace of Spades Gold and 20 bottles of Ace of Spades Rosé. Divide the total by 40 (it’s not hard) and social networks were quickly buzzing as photos of the bill were shared among users. This was 12 years after the video for his hit Show Me What You Got featured the rapper playing poker and scorning a bottle of Roederer Cristal in favor of a bottle of Armand de Brignac.
Of course, a lot of the attraction of Ace of Spades is its association with the star Jay-Z. But there’s also a strategy behind the brand. Armand de Brignac has never targeted perfection, a laborious process and almost impossible to attain. Instead it aims for excellence, which is both inspiring and more inclusive. The idea was to create a high-end champagne brand that was accessible. “The brands that we most admire are built not just on big ideas, but big ideals,” as the advertising legend, David Ogilvy, would say. And the ideals of a brand form the essence of their point of view on the world. With Armand de Brignac, Jay-Z wanted to put forward his point of view on the world – by taking on the Cristal Roederer brand that he had abandoned.
Nearly half of Gen. Z customers feel under-represented in current branding and marketing initiatives. Over the next 20 years, this generation will represent the lion’s share of luxury product consumption worldwide, and brands must be ready to adjust their positioning if they wish to continue to grow. A few years ago, Armand de Brignac produced a gigantic bottle (the equivalent of 40 standard bottles) named ‘Midas’ after an ancient king of Phrygia who had the power to change everything he touched into gold. At the time this was a source of hilarity for some. But he who laughs last laughs longest; today this gold with Jay-Z’s name on it has a price – and LVMH was willing to pay it.
(Guillaume Jourdan wrote this post. You can reach him via LinkedIn)