Posted on | May 14, 2012
Written by | Kristen Wolfe Bieler
Michel Haury is the Manager for the Americas at Castel, the largest wine producer in France—the largest in Europe, in fact—exporting to over 130 countries. The 100% family-owned Castel Group has vineyards in all of France’s key wine-growing regions and produces 640 million bottles of wine annually (when you throw in beer and soft drinks the number of bottles climbs to 4.6 billion). Yet in spite of its massive size, when Haury comes to the U.S., the reaction he gets most commonly is: “Castel who?” The company’s newly applied focus on the U.S. market is about to change that.
Castel’s history is a long and storied one. The company was founded in 1949, at a time when, Haury reminds, “the French consumed about 100 liters of wine per capita.” Over time as domestic consumption declined, Castel looked to other markets to grow their business—namely, Africa. They built 45 breweries there and invested heavily in sugar cane production to supply their African drinks business.
They’ve been busy at home, too: In 1988, Castel purchased the 475-outlet Nicolas wine shop chain; they acquired Burgundy powerhouse Patriarche, as well as icon Bordeaux brand, Barton & Guestier, from Diageo. Today, with 7,200 acres of vines and bottling plants in every region, Castel is able to bottle every wine in the region where its grapes were grown: “We aren’t trucking wine around from region to region,” says Haury. “This is a huge factor in keeping our quality so high.”
Making Headway in the U.S.
With a knack for succeeding in a big way in emerging markets, Castel has, over the years, established significant footholds in Japan, Russia and China, particularly with its Castel brand of wines. In 1990, Castel created Luneau USA, and Haury partnered with Gene Schaeffer to help guide Luneau in the American market. The company had begun to see some positive traction in the marketplace with their Nicolas brand around 2000, but it was subsequently hurt by the politically-driven “French boycott,” just a few years later.
“We decided we needed to concentrate on what is selling well in this market,” says Haury. Luneau has since launched a new strategic initiative with a goal of building 600,000 cases and supporting Castel’s new products in the U.S. One such example was the recent launch of the Tavernello brand, a hugely successful wine brand in Italy and other places abroad.
Castel and Luneau have developed a niche for custom bottling and house brands—another factor contributing to their anonymity here. Teaming up with one of Spain’s largest suppliers, Luneau introduced Ed Hardy Sangria to the U.S.
Debut of a Namesake Brand
The first Castel branded wine—Castel Malbec—recently hit the market at $9.99 on the shelf. “Malbec is very hot right now, but most people don’t realize the grape is actually from France,” says Haury. While the Castel Group has been recently acquiring many high-end French wine estates, assembling an impressive portfolio of prestige gems, these are not the core of the Castel export strategy. “We want to go after the 80% of the wine business: under $10,” says Schaeffer. “The Ed Hardy Sangria and Moscato, Castel Malbec and Tavernello—these are our priorities right now.”
A passionate proponent of simplifying the appellation system to make French wines more accessible—“We currently have 480 appellations, and the country is making more!”—Haury also believes that French vintners should have the freedom to create multi-region blends to achieve wines with the ideal balance of fruit, sugar and acidity, and still be permitted to list vintage on their labels (currently forbidden on Vin de France appellation wines imported into the U.S.). Changes like these would better equip producers to get the best-tasting wine possible into the hands of the consumer. “We want to pack our wine with quality that over-delivers for the price—our wines have outperformed wines twice their price in blind tastings,” he says. “We just want to give the people the best possible value.”