Last week, Bernard Arnault and I both went shopping. I bought a new MacBook Air laptop and the French billionaire acquired half of Château d’Esclans in Provence from Sacha Lichine. I’m not sure whether either of us got a bargain. There are, I’m informed, lots of portable computers that do the same job as the MacBook, and for a lower price. And, if the world’s third richest man is looking to buy vineyards and wineries, there are plenty to be found at knock-down prices. Indeed, I believe that in Bordeaux, where the number of individual estates has apparently dropped from the 6,700 of a couple of years ago, to 5,800, you can get a BOGOF: Buy one chateau and get another one free.
But there are more parallels between mine and the Arnault purchase. Steve Jobs and Sacha Lichine respectively turned a functional item into a luxury. Before Apple, computers were boring, grey pieces of equipment you had to learn how to use. Jobs turned them into things you wanted to touch and stroke and, most importantly, own.
And yes, I know that Domaines Ott pioneered super-premium Provence pink wine a long time ago, and the region created a clutch of Grands Crus, but their production was relatively tiny, and awareness largely limited to locals and customers of Michelin-starred restaurants in St Tropez and elsewhere. Most dry rosé, from Provence and elsewhere, was dull in colour and flavour, and only palatable to those anaesthetised by the sun, sea and lethargy. Not stuff you’d normally want to take home.
Lichine, to use Apple’s phrase, “thought differently”. When he arrived in the region, he imported the late Patrick Léon, previously of Château Mouton Rothschild, and tasked him with making the best possible pink wine from some hillside, 80-year-old, vines. In 2006 a few barrels of barrel fermented, lees-aged Garrus, made from Grenache and Vermentino, were released at what was then a ludicrously high price for a rosé.
But that was just the start: the trumpet-playing banner-waver at the front of the mediaeval army. The cavalry itself was made up of far larger quantities of brilliantly packaged and branded bottles of Whispering Angel that hit the US market in 2007, fully five years before the first grapes for the Pitt-Jolie Miraval venture were even picked.
Today, rosé has gone from being one bottle in every 500 consumed in the US to one in under 40, and the proportion is still growing. The Lichine wines, which now include Rock Angel, Les Clans and The Palm, annually sell in quantities of over 3m bottles, at prices no ‘normal’ commercial Provence rosé could ever have dreamed of. According to some estimates, 20 percent of all the region’s pink wine sold in the US is produced by Lichine.
For Bernard Arnault watching the growth of this business must have been like déjà vu. Because, of course, he performed a very similar trick with Cloudy Bay after buying it from its creator David Hohnen. From the outset, Cloudy Bay had a reputation for being better than its neighbours – like Garrus – and hard to find. Then, despite maintaining the aura of rarity, production was ramped up considerably. Today there are plenty of critics ready to recommend far cheaper and, they may say, better Marlborough Sauvignon Blancs. But none of those has the recognisable wow-factor of Hohnen’s creation.
Take a bottle of Whispering Angel or Cloudy Bay to a friend’s house, and the smile of appreciation will be just like the one you’d get with a bottle of Veuve Clicquot or maybe a branded trinket from Tiffany, another of the luxury brands Arnault has recently bought.
Wine people often like to mock luxury, as though the word did not technically apply to all wine. Arnault, however, has made his fortune by understanding the basic human need to feel good about oneself through a little (or large) bit of extravagance. For some, that might take the form of a $10,000 bag from Louis Vuitton; others might be happy with a bottle of Dior perfume.
The success of these and Arnault’s 70 or so other brands is often attributed to the “Veblen effect”, which comes from economist Thorstein Veblen’s theory about wealthy people wanting to spend conspicuously. There’s no question that most of Arnault’s wealth has been derived from ‘Veblen goods’, but I don’t think it’s that quite simple. Luxury does not have to be visible; sometimes it’s the buying and ownership of something special that matters. And that could as easily apply to bottles of Cheval Blanc bought for the owner’s own pleasure to an item of Rihanna Savage x Fenty lingerie worn by someone who doesn’t intend to reveal it.
Was I thinking of other people’s opinion when I placed the order for my MacBook? Or was I thinking of myself? I’m not sure but in any case, the reader will, of course, have noted the essential difference between Arnault’s and my purchase, and the reason why he’s a multi-billionaire and I’m not. I bought a golden egg; he bought a goose that lays them.