How many wine varieties do you produce?
JC : They come under two different labels… one for restaurants, one for supermarkets. Today with the new acquisitions we produce 96 different wines, don’t quote me on the exact number, it might be 94, it might be 98…
And how many bottles do you produce?
JC: Last year the volume of 75 cl bottles was 18.4m, something like that.
What is your business model?
JC: Basically, the business model that I have created is based on the story of a family who were grape growers, viticulteurs, but who went on to become producers, vignerons. Knowing that the main concern of a grower is to grow grapes, I have taken it to the next level of being a vigneron where you need to master the know how of growing grapes, the know how of vinification, you need to master the know how of aging and blending and bottling and in marketing. That is basically the foundation of the Domaine Paul Mas. I inherited my luck. I was born on a farm and I was encouraged to go away to became a doctor, or a lawyer, or whatever. But I came back to this business after seeing the world, because I believed it was a business that is very beautiful, you came into contact with the best things… the best wine, the best music, the best art. I saw that my family had some assets and we were not turning them the right way; I had in my mind already what I needed to produce in order to satisfy the customers, but at the time I didn’t know how to produce it. Once I knew what a Dutch person or an English person, someone who’d never been in wine making, wanted with their wine… basically to see what the market required. I came back to identify if the type of grapes, the type of soil and climate, etc. here could yield that type of wine I wanted to make. That’s basically the business model of Domaine Paul Mas. Rather than being totally biased by a big … pollution, product… wines, forcing me
to produce this type of wine then have to sell it no, I had a sense of nature about wine growing because of my father and a sense of wine tasting having learnt it as a consumer; then I went back to my father’s job and learnt stage by stage what I needed to do from the production of grapes, down to the bottling in order to make wines that satisfy the consumers.
Did you find that you could be that consumer’ because of your history?
JC: Yes, that was the second big chance. I decided to do it the Languedoc… in the Languedoc I discovered that wine making
here is a very easy job because nature serves you as best you can expect and you get good grapes to make good wine.
The last time we spoke, you talked about the Blue Ocean Strategy, which seems to fit into a level of your business thoughts as well.
JC: Yes, for the marketing side it’s basically about going where the competition is different or irrelevant. I mean I prefer to fight with the Italians, the Australians than local people because you create your own market.
Is that one of the reasons why Paul Mas is currently predominantly an export business?
JC: Exactly. Everybody was running after the USA, or England, when I started the company in 2000 I said England is not at all a priority, which I didn’t do until the day when I decided to quit my own branch, which was last year; and it proved to be the right thing to do.
And if we are honest about it, the economics mean that you can buy a lot more hectares here than elsewhere?
JC: The cost of entry into the real wine business here is cheaper. What I did here with no money, compared to trying to do that
in say Champagne, well you would need to have serious investors to start. It’s a different pressure.
There is a difference there because your methodology is more ‘New World’ production, you are producing efficiently?
JC: The New World taught me is that the consumer is the most important. You have to produce wines that match expectation and want.
It’s very unFrench!
JC: You know in France there is a big problem with marketing. It’s a big taboo. When I say you need to market it, people say I’m doing bad things in order to sell at a premium. They are totally confused. Marketing is a very noble science that is worth books and books and books written by some very clever people. It’s a bit insulting when you are true marketing; the essence of marketing is the product, then how you price it, how you present it, how you sell it, how you distribute it. How you promote it, it’s another story. You know when you see people that, no matter what the guy does… if you go to see a grower who is unshaven with jeans, with holes and so on, he is marketing… when you go to Chateau M, they do marketing, different
obviously… black tie marketing. So everybody has got his attitude, but they don’t know it and we need to talk to them about
marketing. It is about serving the wants and needs of the consumers. That’s the New World approach. Secondly, what the New World has brought, that was a fashion of Australian winemakers who I had the luck to work with, was the idea that a winery has to be like a food company, it has to be very clean and very white capped. That’s essential to making good wine. Because the so called terroir, the taste that can come from ‘dirty’ wine, I am not interested in it.
How many bottles did you export last year to the UK?
JC: 2 ½ million.
I read something that was quoted to you, where you said that the Languedoc needs to change from quantity to quality…
JC: It’s not only a question of numbers; it’s about the philosophy, the mentality. We have to realise that selling so many bottles of premium wine is as important as selling so many millions of bottles at a cheap price. We have to integrate that in all the system.
Does that mean that your mentality and your business model was to go in to a country, create a brand, then educate, then introduce your finer wines? Or was it purely, “there is a market, that’s the one we’ll get market share of before introducing our finer range?
JC: That’s what I identified, the style of wine that existed in such and such a market. I produce it, because I do. I have the resources to produce it. This is why I managed to start in Japan first, then Germany. Then I expanded by creating a new style of wine. This new style of wine found a market in America, England and Australia. So it’s both ways. To start a brand you need to have a correct wine for the market you have identified as liking this kind of wine. I am not going to force myself to say ‘look this wine that I produce is successful in Japan and I want to send you the same wine’, when in fact what I’ve done is say I’ll taste this wine and then go back and see whether the vineyards could produce this type of wine. But don’t forget one element in this kind of wine, there is a price. For each style of wine there is a price; and each market segment requires such a style.
Who makes those decisions?
JC: I do.
Are you autocratic? Do you make the decisions across the board, or do you have a management team?
JC: Now I have a management team, I have to. But until recently I was dealing with everything. Now my only little autocratic
field is the restaurant. From the beginning I always imposed the menu, etc. This is why the chefs can come and go but the menu will stay the same.
THE BUSINESS INTERVIEW
Michael D'Artag poses the questions........
Jean-Claude Mas is the owner and winemaker of Domaines Paul Mas.
18 million bottles of wine were produced in 2013 exporting to 58 countries.
In 2013 he vinified over 112 000 Hl in 8 wineries which besides Champagne makes him the largest private winemaking company in France. Awards include 2013 Winery of the year in the USA (Sommelier Challenge), 2008 Winery of the Year in UK (Tim Atkins, The Observer), 2006 #1 in TOP75 (l’Entreprise), 2006 Grand Prix de l'Entrepreneur & Prix de l'Entreprise Internationale (Ernst & Young et L’Expansion) - Over 42 gold medals in 2013, Syrah of the world in 2013, Top 10 Best Chardonnay of the world 2013, 13 stars in the 2014 Hachette guide, 10 wines selected in Bettane et Desseauve guide…
I meet with Jean-Claude Mas in his office at Paul Mas. He comes out personally to let me know he is just finishing another meeting.
When we meet he is confident, welcoming and open to discussion. Our meeting was frank and at times a surprise as he is not guarded in any way. At times I ask if he is prepared to answer certain questions which he does thoughtfully but without the reservation often found.
Hello Jean-Claude. Can we just start with a few facts and figures?
I read your turnover last year was 39m€?
JC: Taking into account the consolidation of companies, more like 40.1/40.2m Euros.
And you employ 107 staff?
JC: Yes, 107 full-time, but all together its around 115- 120.
How many hectares do you manage or own?
JC: The 8 Estates cover over 478 ha, out of which 440 hectares of vineyards, spread across the Crus of the Languedoc: Pézenas, Grés de Montpellier, Terrasses du Larzac and Limoux. Our branded wines are made with grapes coming from our partners-vintners, which represent 1285 ha of vineyards. This is how we can produce authentic and affordable great wines, what we claim to be an “everyday luxury”!
That puts a lot of pressure on you, up until last year Paul Mas actually relied on the key man, you?
JC: Yes. You can’t do everything and I realized you have to spread it which is why I announced 9 months ago that I split it into
6 top managers, each one of whom is part of what we are doing.
What are they managing?
JC: There is one who manages all the vineyards, one who manages all the wineries, one who oversees all the bottling and the quality control, who is actually my right hand, there is one who manages all the demonstrations, who is my left hand, then I have one marketing manager and one commercial director who deals with sales - and this one suffers the most as it’s the one aspect I can’t give up completely and so he can’t do what he wants!
Coming back to what you were saying previously... there is a reputation the Languedoc had for mass produced wine... it was easy… there was this beautiful terroir, but with this mass produced wine that reputation is still here, it’s being changed by the likes of people like you. But you have just quoted that there are certain people who go ‘this is my wine, then go and find a market’.
JC: The problem here is that people here are still tied to the idea of production; they think you have to mass produce in order to survive. When you talk to people here in the wine business they will tell you how many bottles they produce; however what matters is how much money you make from it, it’s not really the mass production. And that is something that has to be changed, with the mentality and so on.
You have stated that your business model; ‘find a market, produce a wine and find the price that can be charged’. This is the brand.. Did you go into markets to do this, get brand recognition and then educate in order to introduce your finer wines? Or was it purely, right there is a market that’s the one we’ll get market share of period?
JC: That’s what I identified, the style of wine that existed in such and such a market. I produce it, because I do. I have the resources to produce it. This is why I managed to start in Japan first, then Germany. Then I expanded by creating a new style of wine. This new style of wine found a market in America, England and Australia. So it’s both ways. To start a brand you need to have a correct wine for the market you have identified as liking this kind of wine. I am not going to force myself to say ‘look this wine that I produce is successful in Japan and I want to send you the same wine’, when in fact what I’ve done is I’ve said I’ll taste this wine and then go back and see whether the vineyards could produce this type of wine.
But don’t forget one element in this kind of wine, there is a price. For each style of wine there is a price; and each market segment requires such a style.
You are producing a lot of bottles of wine from a large area. Is it fair to say you need to buy or manage more land?
JC: Yes we need to purchase, we have to continue the brand which is 70% of the wine I sell which has to come out of our wineries, 20% from contracted vineyards, from which we make the wine from either winery, it’s not fully under our control; and 10% bought from other markets. So to keep this ratio we have to continue buying.
But this surely begs a stop point? The point where the land or your willingness to buy more ends and the business model has to change? Does your business model have a stop point where you say, right this is the time to change direction, where you go and we use your innovation or even change direction…?
JC: The stop point is the management of people. One of the things I’ve been doing in my company is that I don’t always go about creating a particular position for hiring a person. I’ve met people who have impressed me and I have created a position in the company for them.
One other aspect is that if you manage a lot of real estate you have to give life to it. To do this there is only one way to go, it’s to turn it into private, welcoming places.
There have been some reports in recent years – via the BBC, CNN that say that wine consumption is falling across the world. First and foremost, do you agree with that?
JC: Non. Well, it fell a bit after 2008 but now it’s recovering.
I’ve read there a number of producers in our region who have turned to Merlot for example, is this because they are cheap and easy to produce?
JC: I accept that there a number of producers saying that’s why we did it; whereas another group is saying ‘no we use it because we can blend it or it gives a good base…’what I recommend to all the growers when they ask what is selling. I say no, what will be selling will be the best wine that you can produce. The best will be the best suited grape variety for the type of soil and climate, that’s the key. And that’s something that we really need to push into the heads of all the growers here. It’s not what sells, it’s what is good.
What I have been trying to do is to pair what sells and what is good for a certain type of market, quality is not up for discussion. All the wine has to be from decent to good to upper quality. So the growers here have to integrate what is best suited to their soil, to their climate and to their way of life so that they produce the best possible wine… it can be a Chardonnay, a Sauvignon, it doesn’t matter, and it has to be the best. Once you have that, there is no reason why you shouldn’t sell. But the fundamental element is at what cost are you going to produce it? If your terroir can produce 40 hectoliters then you need to get into some serious marketing, but if your land can produce 80-90 hectoliters, then you can think differently, you can have the approach of a producer of raw materials, because then at this level you get into the category of value for money and you can fight for a better price. You get into a certain category of wine and a style that people expect to be in tune with what you do. May be it’s not as complex as a terroir that produces 40 hectolitres, but the big mistake that I see sometimes with my wine is that either one is too complex, too strong and if you fit it into a category which is below and at too low a price, people don’t get it at all. So you have to make sure you serve the right style of wine to the people who can understand it too.
Do you use additives in your wine?
JC: What do you mean?
We ran an article in a previous issue where we asked an expert about the truth regarding the inclusion of such additives as fish bladders and toxic chemicals
JC: There you have different things… one of the most common is egg whites, I hate that. Bentonite or gelatins for stabilizing the wine, they are the three main categories. For red wine we don’t use anything, we are just straight. With white wine we use bentonite for stability. For me additives are useless, it’s only for wines that need to be tweaked… it’s like makeup… when a lady’s fine she doesn’t need so much make up, when she’s not so fine… she needs a lot of makeup.
You have opened your restaurant Cote Mas and have expansion plans, you mentioned London and you are also working with wine tourism…is this the future?
JC: Basically, yes I think that the new model of business today is that when you grow, obviously you can’t integrate everything, so you have to grow as your business demands. My business demands today that our kind of customers are integrated in to a world of history, I need to go into wine tourism, I need to have beautiful places where I can work on people, I need to have beautiful restaurants, I need to have a place where I can share my wines because I can’t expect to be just a wine producer; I can’t be just a grower because this is not our philosophy, so we have to integrate wine and a style of life which calls for wine tourism, which calls for relationships with artists. May be one day we can create things around wine; we have to integrate the wine with art, beautiful food and so on. Look at the coffee business… from growing beans to coffee machines, to today with shops, that’s the model today. When you have a product which calls for emotion from what you taste, from what you see, then you have to put it into a model which enlarges this emotion.
This fits in with where you say you don’t follow, you are an innovator. So you are taking a model you have seen in other industries?
JC: Exactly.
Regards the restaurant, what’s your timescale for openings?
JC: It’s a question of people. In the restaurant business I have discovered there is a big big problem with people, with getting people. We had the same problem 10 years ago in the vineyards, its changing and has been steadily improving. But with restaurants it’s a big problem. We need young people to do these jobs, so I have to find the keys to do that.
Are your restaurants going to be this diversity of business practice in as much as are you just going to offer Paul Mas wines?
JC: Obviously it’s the key to promoting Paul Mas wines, but the ones I respect I wish them to be in the restaurant.
Does your business model have a stop point? Where you have to move in another direction?
JC: The stop point is the management of people. One of the things I’ve been doing in my company is that I don’t always go about creating a particular position for hiring a person. I’ve met people who have impressed me and I have created a position
in the company for them. One other aspect is that if you manage a lot of real estate you have to give life to it. To do this there is only one way to go, it’s to turn it into private, welcoming places.
Out of your turnover, what percentage of your business is utilized for beautification and also for the redevelopment?
JC: It’s very big. It’s nonstop. I invest all the time into real estate and beautification. If you saw pictures of here for example, from 15 years ago you would be scared!
Give me a percentage?
JC: I can tell you that in the past three years we have invested in beautification and improvements – not construction of buildings, you are talking about €6m. So, about 8% of the turnover.
And how much do you spend on marketing?
JC: Marketing, in terms of the turnover it’s not that big. We market a lot of the product, but in terms of advertising, spending a lot of money in marketing studies and so on… non non. I would say that the total would be 2m€, not more. For the US, out of that 2m€ we invest 300k€ for marketing. Compared to France, the US is the one that we invest the most in terms of marketing.
Staying on food, I have been hugely disappointed in French food and gastronomy in the last 7 + years?
JC: Yes, same problem as the wine business. Since I have had a restaurant I have been lucky enough to be able to talk to some important chefs and all of them have the same opinion which is to get out of France so that they can do what they want to do. It’s a question of improving the environment.
France at the moment is locked from within and externally due to bureaucracy, the fear of change and interference. Do you believe this statement or is it a stereotype?
JC: France is a big problem, the mentalities that we have created. Any society needs to evolve, its needs to change from time to time. The trouble with France for the past 30-40 years is because the politicians’ words are constantly changing – all of these people say how much we need to change, then nothing changes. French people are risk adverse and change adverse in such a big way that when we change we call it a revolution. That’s one of the big problems with France. That’s problem number one. When we talk about that change aversion, we can talk about the bourgeoisie in France who are totally, totally change adverse. Then finding people we need most - intrapreneurs and entrepreneurs – saying that there are no resources for entrepreneurs in France is totally wrong, we are probably the most well-resourced for entrepreneurs in the world, but the number that do not to take off per head, is much more than any other countries.
Second problem, the intrapreneur, we have a nursery of intrapreneurs which is very good but they don’t stay in France. They go to England, they go to America, because of this aversion to change by a big part of the French population, and these people who have lived a certain way and want to make sure that things don’t change too much. That is very very damaging to France. It is inherited from the fact that we destroyed our aristocracy. The aristocrat who was protected In England, they knew how to serve people. The people I am talking about here don’t dare, they neglect the people. The true people at the top they respect them. We missed this new age of entrepreneurs who showed respect to their employees, and who didn’t treat them like shit, instead they were treated badly by these fake aristocrats. We cut the head off our king and since then everybody tries to be the king. Certain values need to be restored.
But how is this going to take place? At present there are not many people who think like you in France?
JC: It’s a question of balance. It’s not a flip over that will happen at a certain moment, I have a big belief that this flip over can be developed by entrepreneurs, managers; there are many people who think the way I do, certain companies who have been very successful, especially when it comes to people in their company. So I think we will change the mentality gradually so that you have the ink effect…you know you hope that your people will pass it on to their children…
If you had the chance to make specific changes for business, what changes would you make for the entrepreneurs, for the businessmen and women of this country?
JC: Lead by example.
Give me one more.
JC: Leading by example is one of the most important things. Then probably by giving people in the real world the ability to be more involved in politics.
Do you have a 3 / 5 / 7 / 10 year plan, excluding the wine tourism?
JC: Next stage is to show a certain range of wines, 5,6,7 vintage year olds, that’s one step. It’s a fact that I produce wines that are better when they are 5 years old than when they are two years old. But as well as developing the wines I also plan to
produce sparkling wine.
Sparkling wine?
JC: There is a very strong sparkling wine future.
Really? From here?
JC: Yes. It will be ready in almost one year. The grapes are picked by hand and so on. So I will recreate a new economy. We will need pickers, etc.
Paul Mas did have a local reputation for producing mass-produced, cheaper level wine from those here who were perhaps jealous of your success. What about now?
JC: Now they have respect for me because I have applied a win win strategy and all the people who have been working with me cannot say bad things about me – except may be my architect!!
You have been predominantly an exporter. But you are changing that now?
JC: We want, have to be, a bit present in France. The reason why now is because the market is changing.
In what way?
JC: People are becoming more discerning. We also see a swing of people moving back from spirits, etc. to wine as new consumers.
Is that why labels like The Arrogant Frog were launched for a newer audience?
JC: It’s a new audience. It can be 25, it can be 35, it can be 45. And because of the status also…
Do you have a direct competitor in France?
JC: Locally I won’t say that I have any competitors. Red wine, yes I have plenty of competitors. I like to say that sometimes it can be a company from Chile who is a competitor; I like to see that people in Spain are competitors; I like to see that people from other regions in France are competitors. I like to say that, but I won’t say that I have a direct competitor who is looking at what I do…
Where do you think France stands currently in a list of good wine producing nations of the world?
JC: I would say that there are some very good wines; I would say there is a nice come back. If you had asked me that question 6-7 years ago I would have said that we were backward. But now there are interesting things coming out. If you come from Burgundy or Bordeaux, or Loire or Rhone I think they are fighting back. For me I think that Italy remains the no.1. On average, when it comes to luxurious wine I think that France is number 1, but for the world of wine I think that Italy is no.1. It’s a question of segments, it’s like if you are asking the question about fashion – if you asked about Haute Couture I would say France is no. 1 but if it is high street fashion then Italy is no. 1. In our case, we are quite new to the fine wine production (14 years). Our aim is to produce the best possible wine at affordable prices while respecting our rural roots and making them part of a lifestyle that we define as “Luxe Rural”