Influential rap artist and entrepreneur Jay-Z has launched a boycott of Champagne Louis Roederer's Cristal brand. In 2005, Cristal ranked 8th on the annual "American Brandstand" list of brand mentions in popular music, by far the most popular wine product.
The boycott, announced last week, was prompted by an interview given by Champagne Louis Roederer president and CEO, Frédéric Rouzaud , for a story called "Bubbles & Bling" in a special edition of The Economist magazine. When asked about Cristal's association with hip-hop, Rouzaud responded that he viewed it with "curiosity and serenity." He went on to say, "What can we do? We can't forbid people from buying it. I'm sure Dom Pérignon or Krug would be delighted to have their business." It seems that the boycott was prompted, in part, because of editorializing on the part of The Economist writer Gideon Rachman, who later in the article labeled the hip-hop connections as "unwelcome attention" for Louis Roederer.
"It has come to my attention that the managing director of Cristal, Frédéric Rouzaud, views the 'hip-hop' culture as 'unwelcome attention,'" said Jay-Z in a statement. "I view his comments as racist and will no longer support any of his products through any of my various brands, including the 40/40 Club, nor in my personal life." Jay-Z and the 40/40 Club, the small chain of exclusive sports-themed nightclubs Jay-Z has opened in New York and New Jersey, has decided to stock only Krug and Dom Pérignon in the future.
Ryan Harris, vice president of marketing and business development for Domaine Chandon, part of the LVMH luxury goods group that includes the Krug and Dom Pérignon brands, said Domaine Chandon welcomes their association with hip-hop. "We fully support the hip-hop community and we're happy to be served to anyone that enjoys quality wine," said Harris. "We're a diverse company and we expect that our products would be enjoyed by a diverse group of people."
"Jay-Z saying this about Cristal is a huge culture shift," said Lucian James, president of Agenda Inc., a brand marketing firm that compiles the American Brandstand list. "The other dimension to hip-hop is that people like Jay-Z are unbelievably influential. Everything they say has more weight.
After the boycott announcement quickly spread, with help from critical hip-hop websites and amused entertainment outlets, Rouzaud issued a somewhat apologetic statement. "A quick-spreading rumor falsely attributes me with the reference 'unwelcome attention.' I did not use this phrase and I did not imply such sentiment.
"The House of Louis Roederer could not have been in existence since 1776 without having the utmost regard for, and interest in, all forms of art and culture; this encompasses the most contemporary of fashions and music, which allows us to keep in step with the modern age. Cristal, like other great fashion names, has earned greater renown by being adopted by some of today's most recognized artists, entrepreneurs and opinion leaders," said Rouzaud in the statement.
The statement later read, "As winemakers, we cannot deny that we have occasionally been a little dismayed at seeing our wine sprayed around in celebration instead of being savored in a glass."
Despite the new clarification, a spokesperson for Jay-Z told Wine Business.com that the entrepreneur was unmoved by Rouzaud's latest statement and he will continue to lead the Cristal boycott among the hip-hop community.
James said that all of Rouzaud's statements clearly indicate that he does not truly understand this new consumer segment. "It was an unfortunate comment and a really stupid comment for him to make," James said. "[Rouzaud] didn't really understand what Cristal represented to the audience. If he had understood his new audience, he probably would have been a lot more relaxed and wouldn't have made the statements he did."
James also said, though, that Cristal was likely to decline in stature among the hip-hop community anyway. He indicated that the hip-hop culture is extremely label conscious and that brands can quickly fall in and out of favor, pointing out that just a few years ago Moët & Chandon was the hottest Champagne. However, making a gaffe publicly can permanently damage the brand. "Cristal was very overexposed and it was looking like a very fast moving brand, and the problem there is that they can crash very quickly," said James.
"There's a cultural confusion, but it's the nature of it. A brand can no longer say, 'This is what we are.' In the pop culture environment, anyone can embrace your brand," continued James. "The poor guy is a bit beleaguered and confused, but it's his responsibility to really understand that consumer. [Roederer] could have followed a model where they really go after the traditional consumer, but they didn't. They were happy to be a hip-hop brand as long as it did them no harm."
According to Harris, the exposure and image association from the hip-hop world is enough of a benefit, no matter how much of a direct impact it has on sales. "Endorsement is a very important part of the luxury brand category. And for anyone that chooses to endorse our brands, whether it's an artist or producer or someone else, we encourage that," said Harris. "For example, Chandon was named in [popular rap artist] Snoop Dogg's 'Drop It Like It's Hot' song last year. We were very excited by that. It means the brand is relevant and is embraced by that community."
How much the boycott will affect Cristal sales (or those of other prestige Champagne and sparkling wine brands) remains to be seen. Harris described luxury Champagne and sparkling wine sales in the hip-hop segment as "significant," but was unable to quantify it exactly.
It is clear, however, that the hip-hop culture had up until this point fully embraced the Cristal brand. Even priced at $400-$600 per bottle, sales were strong at places like the 40/40 Club and similar hip-hop havens after artists like Jay-Z began name-checking the brand. It seems, at least for the time being, those sales are likely to drop significantly. Many analysts believe that once a brand or label loses favor with this consumer segment, especially after having been tagged as "racist" or exclusionary, it wouldn't be surprising for the change to be permanent.