Philippe Schaus, chief executive of wine and liquor company Moet Hennessy. Photo/Dean Purcell.
When it comes to top shelf alcohol New Zealanders like to drink champagne but we prefer to do it at home while our overseas visitors from China prefer to drink the French brandy Cognac.
It's the kind of detail Moet Hennessy's chief executive Philippe Schaus knows inside out for all the major markets the luxury wine and spirits brand services.
Based in France, Schaus spends 40 per cent of his time travelling the globe, getting to know the brands it owns and the markets it operates in.
In New Zealand Moet Hennessy has owned winery Cloudy Bay since 2003. It is one of six different wine making brands the company owns around the world and Schaus is serious when he says he sees Cloudy Bay and Chandon Argentina as its the top wine offerings in its portfolio.
"I say to our team believing it Cloudy Bay is the crown jewel of our wine offer."
The specialist Sauvignon Blanc producer performs well in all major markets, according to Schaus.
"We sell it in almost every market. And it is considered throughout the world to be the representative of excellence of New Zealand wine-making."
Schaus visited New Zealand in September with a view to expanding the winery which has vineyards in central Otago and Marlborough.
"The main reason for me to come to New Zealand was to visit central Otago and Marlborough and to really understand where we are and how we can build on this incredible success and bring it to the next level."
Schaus says right now it is facing capacity constraints with more demand for the brand's wine than it can keep up with.
"We are working on progressively expanding our production capacity by acquiring more vineyards and planting them. But always making clear we make no compromise on the quality level."
That means it only uses around 70 to 80 per cent of the grapes it grows or sources from other growers. The rest get sold because they would not reach the standard required for Cloudy Bay.
"It's no different than any other categories of the luxury business. It's all about quality and consistency."
Schaus is an expert when it comes to luxury goods and has worked across a range of items from ceramic-ware to duty free and now alcohol.
He has been with the Luis Vuitton business since 2003. But it is a far cry from his original career path.
Born in Luxembourg Schaus trained as an aerospace engineer before starting work at financier JP Morgan and moving on to Boston Consulting.
"The reason I studied engineering is I was really curious about the complexity of science and technology.
"I was told at that time it was one of most complex things you can study."
But now he says he sees marketing and distribution as even more complex because it is so unpredictable.
"This mixture of science and art...I quickly decided I didn't want to work in the world of engineering. I moved to consumer products after a number of different explorations - one in finance, one in consulting. I landed in luxury consumer products."
"You get completely different perspectives of business life and in the end what helps you build up knowledge and understanding of business life."
So what is it about luxury that attracts people?
"Luxury is about quality. It's about experience. It's about dreams and sharing."
For instance Schaus says most people wouldn't drink champagne on their own.
"You always share it with someone else."
"And then of course in the case of champagne - it comes from France which has connotations of romance."
"In a world of luxury you sell a product which of course has to be perfect but you also sell a dream and the dream is linked to the history of the brand, the quality of its making and the location it comes from."
At nearly $300 a pop Hennessy's Krug Grand Cuvee champagne doesn't come cheap.
Perhaps that's why New Zealanders are more likely to drink it at home than to buy it in a restaurant or bar with the added mark-up.
But Schaus says demand for its products in New Zealand has been growing.
"There are two facets to it; you have the local market - people living in New Zealand and the tourist market, particularly in places like Queenstown."
"In the local market it is a lot about champagne. We talk about on trade (restaurants and bars and off-trade (home consumption.) What is specific to New Zealand is the share of home consumption is particularly high compared to other places.
"New Zealanders love to entertain and use their beautiful homes to entertain their friends."
When it comes to overseas visitors it depends where they come from. Australians also like champagne but Chinese visitors prefer Cognac.
While economic growth has been slowing and is expected to slow further Schaus says so far demand for luxury items has held up well.
"This is very much being driven by China and mainland China. The luxury market in China in general is still growing."
He points out that when China slows down it is still growing at 6 per cent.
"China has seen unprecedented numbers pulled out of poverty and into the middle class and into the cities and starting to travel and this movement is still ongoing.
"This generates a lot of demand for these kinds of products."
In the Asia Pacific region each country has its own peculiarities.
"There is not much homogenity between the markets. Each market is very different. South Korea is very much a wine market. Japan would be more of a champagne and whiskey market. China is more of a cognac and whiskey market.
"So you need to have a strategy for each and every market. And in those markets you have tourist business and local business and a lot of the tourist business is driven by the Chinese. The amount of purchasing is driven by taxes and prices differences."
"There are a lot of elements to the equation but the underlying demand is still growing."
But he admits that even luxury items are not recession proof.
"If past history is an indication in recession luxury has suffered but has bounced back relatively quickly afterwards. And then it depends on the category and consumer."
Schaus admits he had a lot of curiosity about wine making but never really understood it before he moved into the wines and spirits part of the business from DFS - the duty free shopping arm of Louis Vuitton.
"I think entering that world and starting to understand the magic behind making a great wine or sparkling wine that is a fascinating discovery and I'm still discovering because it is very very complex.
"It is one of these areas where it is as much about art as it is about science. You meet the wine-maker and go through with them how they make it and realise how much science is involved.
"You start with the soil, the climate which changes from one year to another. You are facing all sorts of changes but ultimately you are producing something consistent over time. It is pretty unique."
As to his favourite tipple Schaus is coy on that subject.
"With everything in life the diversity is what makes things interesting"
• Chief executive of Moet Hennessy, the wines and spirits division of LVMH (Louis Vuitton Moet Hennessy.
• Born in Luxembourg, age 56.
• Married to Claire with four adult children.
• Education: Degree in civil engineering majoring in aerospace engineering from the Universite de Liege, MBA from INSEAD business school.
• Career: Began his career in 1987 at JP Morgan in Brussels before joining The Boston Consulting Group in Germany in 1990.
In 1992 he became international commercial director at Villeroy & Boch A.G. in Germany a high end kitchen and bathroomware company, before being promoted managing director for the tableware division and joined the board.
He joined Louis Vuitton Malletier in Paris in 2003 as President of the Europe Zone and was then appointed Senior Vice President, International, and finally Executive Vice President in 2009. Joined DFS Group (part of LVMH) in Hong Kong in 2011 as Group President of Merchandising and Marketing. He was named Chairman and Chief Executive Officer of DFS Group in 2012. Since October 1, 2017, Philippe Schaus has been CEO of Moët Hennessy, the Wines and Spirits division of LVMH. He has been a member of the Executive Committee of LVMH since 2012.
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