PERSPECTIVE3-5 min to read

Taittinger and the soul of a family business

There are not many families that have sold a multi-billion dollar business – and then bought it back within two years. The Taittingers are one of few examples. Cazenove Capital recently spoke with the father and daughter team behind the French champagne house to find out why – and understand what makes a family business so special.

27/06/2023
Two glasses of champagne.

Authors

Clare Anderson
UK Head Schroders Family Office Service

For many families, selling a company to a global private equity firm would mark the pinnacle of their aspirations. But Pierre-Emmanuel Taittinger is not entirely joking when he describes the sale of his family’s business as a “tragedy.” It led to a remarkable journey that saw him buy back the champagne house, manage it alongside his son and daughter for over a decade and then step back as they took the helm. It has flourished in the hands of this close-knit family group.

The Taittingers’ involvement in the champagne business dates from 1932, when Pierre Taittinger (Pierre-Emmanuel’s grandfather) bought the chateau and vineyards of La Marquetterie, 30 km south of Reims in the heart of the Champagne region.

The family was still the majority owner of the group when it was sold to the private equity firm Starwood for over €2 billion in 2005. Pierre-Emmanuel did not support the sale, but was outvoted by other family members and minority shareholders. “We had a lovely group” he says nostalgically. As well as the champagne business, it owned hotels (including the Crillon in Paris), a bank and the luxury glass maker Baccarat.

Pierre-Emmanuel was bereft. The sale came about, he suggests, as a result of rivalry between different branches of the family – and poor decision making by a management team that had been in place for too long. The sale was also unpopular in the region, with local growers wary of the intentions of new owners.

With the support of his immediate family, Pierre-Emmanuel started working with the bank Credit Agricole to buy back the core champagne operation over the course of 2006 and 2007. With more than 10 bidders, there was little sentimentality around returning it to the family. “We ended up paying significantly more than the next higher bidder,” he notes. The group is now thought to be worth multiples of the repurchase price – but not for sale, Pierre-Emmanuel points out.      

Family and business: the best of both worlds

Today, relations with the broader Taittinger family are in a good place. However, Vitalie suggests that something was lost with the ownership transition: “When you are working together, creating value, trying to involve everybody…the relationships are much more dynamic.”  

Vitalie took over as president from her father in 2019 and now works closely with her brother Clovis, one of two managing directors. The group has a “a beautiful family atmosphere" Pierre Emmanuel says proudly. It is very much reflected in the way the company is managed – both in its approach to staff and customers.  

Vitalie suggests that staff tend to view Taittinger as a long-term home, not just another job. Her father praises her approach to looking after them through the pandemic, which was not the best of times for a business that depends on people coming together to celebrate. 

This sense of warmth extends to visitors. “What can be more important to our customers and people who love champagne then having them at home, welcoming them. We now have around 80,000 people visiting us every year  compared to around 30,000 before we bought the business back. My father totally changed the way we welcome people into the cellars.

The family’s longer-term perspective has enabled them to take difficult decisions that have proved shrewd with hindsight. More than a decade ago, Pierre-Emmanuel decided to run the vineyards organically. “It was incredibly brave at the time” suggests Vitalie. “We were the first of the big houses to do it. For a while, it made things more difficult for the people working in the vineyard so it took courage…but today we can be proud of it.”

Pierre-Emmanuel Taittinger

The lessons of history

For Pierre-Emmanuel, the misguided sale in 2005 underlined the importance of succession planning. Uncertainty and differing views on the future of the group caused the family to lose control once before – and he was determined it should not happen again. “From the very first day I bought back Taittinger, I've been thinking about the transition. I always said I was going to leave the business at 65 and do something else. When people get too old, they start to make mistakes.”

“No one thought my father would leave” Vitalie says. “But he did. I plan to take a similar approach because now, to be honest, we are starting to think about the transition to the next generation. You have to think about it from the beginning if you want to protect the spirit of the company.” 

The enthusiasm for family business is not untempered. “In a family business – in any kind of business – you will get things wrong” says Pierre-Emmanuel. So it has always been important to him that someone from outside the family has the authority to say “no”. Today, that role is taken by Damien le Sueur, another managing director. “If he says no, we won't do it. We'll rethink together and we'll find a way forward. I would encourage all family businesses to have someone from outside the family.”

Evremond: a story of friendship

Taittinger plans to start producing a UK sparkling wine from vineyards near Canterbury in Kent – with the first bottles expected in 2024. It will be named after the seventeenth-century French diplomat Charles de Saint-Evremond  the only Frenchman buried in Westminster Abbey. “He was a great advocate of champagne and a brilliant writer and historian. He almost made it to 90 – a good sign that he got a few things about life right.”

As climate change becomes more of a threat, greater geographical diversification is beneficial. However, it is not a key driver of the investment in the UK. “If there is global warming in Reims, we'll have global warming in the UK as well” explains Pierre-Emmanuel. “I was more attracted by the beauty of the land, the chalk. There is a lot of chalk in Kent, like in Cognac, like in Champagne.”

Even more importantly, the UK expansion reflects the family’s desire to demonstrate its appreciation of the UK market – the largest export market for champagne. It also reflects a long-time friendship with wine agent Hatch Mansfield and its CEO Patrick McGrath. All have played a crucial role in making the re-acquisition of Taittinger so successful. 

“Evremond is really about what I call the “human adventure,” Pierre-Emmanuel explains. “More than money, cars…or even champagne…it's the journey with other people that has motivated me. The real pleasure in my life has been the adventure I’ve been on with my family, with Patrick, with the employees and customers of Taittinger….and with the markets of the world.”

Illuminated rack of Taittinger champagne bottles stored in a cellar.

Issued in the Channel Islands by Cazenove Capital which is part of the Schroders Group and is a trading name of Schroders (C.I.) Limited, licensed and regulated by the Guernsey Financial Services Commission for banking and investment business; and regulated by the Jersey Financial Services Commission. Nothing in this document should be deemed to constitute the provision of financial, investment or other professional advice in any way. Past performance is not a guide to future performance. The value of an investment and the income from it may go down as well as up and investors may not get back the amount originally invested. This document may include forward-looking statements that are based upon our current opinions, expectations and projections. We undertake no obligation to update or revise any forward-looking statements. Actual results could differ materially from those anticipated in the forward-looking statements. All data contained within this document is sourced from Cazenove Capital unless otherwise stated.

 

Authors

Clare Anderson
UK Head Schroders Family Office Service

Topics

Family offices
Lifestyle
Perspective

Cazenove Capital is a trading name of Schroders (C.I.) Ltd which is licensed under the Banking Supervision (Bailiwick of Guernsey) Law 2020 and the Protection of Investors (Bailiwick of Guernsey) Law 2020, as amended in the conduct of banking and investment business. Registered address at Regency Court, Glategny Esplanade, St. Peter Port, Guernsey GY1 3UF, (No.24546) . Schroders (C.I.) Limited, Jersey Branch is regulated by the Jersey Financial Services Commission in the conduct of investment business. Registered address at 40 Esplanade, St. Helier, Jersey JE2 3QB, (No.31076).

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