Taking over the family wine business
When he took over the Louis Roederer champagne house and the numerous other wine estates owned by the business in 2006, Frédéric Rouzaud faced a unique situation. He was a direct descendant of Louis Roederer himself and had become the new family CEO of one of the most prestigious family-owned businesses in the world. But he was not always destined for the job. His father, Jean-Claude Rouzaud, who was handing him the reins, had interviewed two other candidates for the role; and when he was younger, Frédéric himself had not been convinced he wanted to step into his father’s shoes, working in a different industry after going to university.
“When I was around 20 years old, and after my studies, I didn’t want to work with my father at all. I was absolutely not ready to work in the family company,” he says. It is hard to believe these words now, coming from the 54-year-old Frenchman, who for 15 years has personified not just Roederer and its luxury brand Cristal but the other wineries in its stable.
But Rouzaud spent his first years in the working world in a real estate company in Bordeaux, before joining the family company in 1996, as a regional manager. “It is always difficult to work with your father, and in a family business, especially so,” he says.
He rose through the ranks to be HR manager, and, in 2006 on his father’s retirement, was appointed chief executive. “My father was always telling me that he was not really sure that I could take over, that I was not really invested as he was. I was telling him that he was still there, so I couldn’t invest 100% from my side; it was a game played like that for a while. But in the end, he was happy to let me in.”
He says he would recommend a succession plan that involves the new family member working in HR. “HR was very interesting. It’s quite a sensitive position…you have to deal with the trade union; with the government and the labour laws. It’s a really central position…I think it reinforced my learning of the professional environment and interactions.”
Frédéric Rouzaud has gained a reputation as a canny acquisitor of high-quality wine estates: during his time as CEO, the company’s holdings have grown to 12 estates around the world. All of them are prestigious in their areas, and all were purchased shortly before a rapid increase in demand for their category. This started even before he took over the reins formally. “For instance, I pushed my father to buy Domaines Ott in 2004.” Ott is a highly regarded Provence rosé wine which it sells in a distinctive curved bottle. But rosé wine has always been looked down upon by the wine establishment in France. “He was not really understanding what rosé wine was. But he let me do the deal for it, even if he didn’t understand it.” Proving Frédéric’s instincts right, it is notable that rosé wine sales have increased steadily as a proportion of total wine sales in the years since then; in 2018 alone, rosé wine sales in the US increased by 40%.
Frédéric also proved himself to be prescient when he persuaded his father to start the process to buy Château Pichon Lalande, in Bordeaux. Prestige was not the issue here: Pichon Lalande, or to give it its full name, Château Pichon Longueville, Comtesse de Lalande, is one of the great wines of the world, famed for its silky richness and ability to age. But like all Bordeaux wines, its distribution is via the Place de Bordeaux, a marketplace of négociants (merchant-distributors), rather than direct from the winery itself. “He was thinking, “Why should we all buy a Cru Classé (top Bordeaux classed growth wine), we should buy a wine we can distribute through our own network, not on the Place de Bordeaux”. But he allowed me to do it; he may look like he is not an open-minded person, but he is very open-minded.”
Again, Frédéric Rouzaud’s instinct proved prescient. Since the acquisition, prices of top wines in Bordeaux have increased by a triple-digit percentage, marking a sharp increase in profit margins and brand equity.
He says that running the new wineries he has acquired has been one of his biggest challenges. “To organise the transition and to initiate a new era at all levels: human, investment and so on, in the development of these new projects, is challenging.” What is his solution? “Finding good people in the right place and sharing the long-term family vision.”
As he explains in the next part of our article to be published on Thurday 1 July 2021, he has applied some unique management oversight techniques and transformed the business to become a leader in the 21st century.
1967: Born, Montpellier, France; eldest son of Jean-Claude Rouzaud
1990: Graduates from Paris Dauphine University
1991: Joins as a trader for Auguste Thouard Vignobles
1996: Joins Champagne Louis Roederer in Reims
2006: Appointed Managing Director
2007: Completes purchase of Château Pichon Longueville, Comtesse de Lalande
2018: Purchases Hotel Christiana, Val d’Isère
2019: First fully biodynamic/organic vintage of Cristal champagne released
2020: Purchases Diamond Creek Vineyards, California