LVMH Bets on Booze-Free Bubbles at $100-Plus a Bottle
Luxury giant invests in maker of upscale nonalcoholic sparkling wine amid tough market for Champagne
PARIS—Champagne’s biggest producer is giving alcohol-free bubbly a try.
Luxury giant LVMH MC -1.41%decrease; red down pointing triangle is buying a stake in a French maker of upscale nonalcoholic sparkling wine, betting that it can convince more consumers to pay upward of $100 a bottle minus the booze.
The deal for roughly 30% of French Bloom comes amid a surge in popularity for low- and no-alcohol drinks, and as LVMH’s Moët Hennessy division contends with sluggish demand for Champagne and spirits.
French Bloom, which launched in 2021, has sought to capitalize on a growing number of consumers moderating their alcohol intake in recent years and is now sold in 30 countries. The brand—led by a member of the Taittinger Champagne family—has roughly doubled its business each year and is on track to sell close to 500,000 bottles this year.
“There’s a huge demand for quality products without alcohol,” said David Serre, Moët Hennessy’s strategy chief. “It’s been clear to us for a few years, but we hadn’t found the right opportunity.”
LVMH and French Bloom declined to disclose a valuation for the deal.
Champagne is big business for LVMH, with Moët Hennessy holding a dominant position in the market. Its brands include Dom Pérignon, Krug and Veuve Clicquot. The company also owns prestigious wine labels such as Château d’Yquem and Château Cheval Blanc.
The investment in French Bloom marks LVMH’s first move into nonalcoholic drinks, joining some of the biggest names in the booze industry—from Guinness to Heineken—in moving into a fast-growing market.
Sales volumes of nonalcoholic still and sparkling wine increased by 7% last year, according to industry tracker IWSR. It forecasts volumes of nonalcoholic drinks to grow at a compound annual rate of 7% between 2023 and 2027, eventually capturing nearly 4% of the alcohol market.
By contrast, demand for wine and spirits remain sluggish this year after volumes dropped globally in 2023. In the first half of this year, Moët Hennessy was LVMH’s worst performing division, with sales dropping 12%.
The idea for French Bloom came after friends Maggie Frerejean-Taittinger, who was pregnant with twins, and Constance Jablonski, a model, noticed a lack of sophisticated nonalcoholic drink options at social gatherings.
A new brand of nonalcoholic sparkling wine could work, they figured, since a fine wine’s essence lies in its complexity and depth, with alcohol being secondary.
To make their idea a reality the two women tapped Frerejean-Taittinger’s husband, Rodolphe, for his winemaking experience. He comes from a long line of Champagne makers: His great-grandfather, the businessman Pierre Taittinger, acquired one of Champagne’s oldest houses in 1932 and gave it his name. Taittinger is now owned by Rodolphe’s cousin.
French Bloom invested heavily on research and development to create its nonalcoholic sparkling wine, said Maggie Frerejean-Taittinger, an American who moved from Chicago to France to study.
“When it comes to producing quality dealcoholized wine, starting with the best wine is not the way to go,” she said.
When a wine is dealcoholized, it loses about 60% of the aromas. “We have to start with something that has, we like to say, wider shoulders, versus if you dealcoholized a Chardonnay from Burgundy, you’re not left with a lot,” she said.
French Bloom sources its grapes from the Languedoc region of southern France, where the sunny climate results in grapes with naturally high alcohol content and sugar levels. They also harvest the grapes two to three weeks early, depending on the year, to have maximum acidity. They then age the wines in new oak barrels from Burgundy.
The wine is “undrinkable before the dealcoholization process,” said Maggie Frerejean-Taittinger. “It’s so overpowering.”
To remove alcohol, French Bloom uses a technique called cold-vacuum distillation where the wine is gently heated.
While some consumers might feel they should pay less for a booze-free drink, starting with an alcoholic wine and then removing the alcohol involves more work and higher costs, Maggie Frerejean-Taittinger said. The brand continues to refine its process, releasing the ninth version of its sparkling white earlier this year.
The brand sells bottles of sparkling white for $39 and sparkling rose for $44. Its latest nonalcoholic fizz, La Cuvée Vintage 2022, sets consumers back $109 a bottle. It is mostly sold in high-end bars and restaurants, or through luxury retailers.
While the brand initially expected customers would mostly be pregnant women and nondrinkers, it estimates that about 80% of its clients drink alcohol.
For Moët Hennessy, its investment is about giving consumers more appealing alternatives when they decide not to drink alcohol.
“There’s always been a nonalcoholic offering but it’s nothing really exciting, nothing sophisticated,” Serre said, adding that the company wanted to complement its Champagne houses, not replace them.
For some, though, booze-free bubbly can initially be a tough sell.
In the Taittinger family, it is tradition to baptize babies with Champagne.
The first time Maggie Frerejean-Taittinger put a bottle of French Bloom on the family dinner table, she recalls, her father-in-law “almost had a heart attack.”