Champagne Cattier: The Diversification Challenge

The Cattier family had been active in the Champagne region of France for over 250 years. Starting out as growers of grapes, they moved into champagne production, initially for local consumption. By 2017, the Cattier company, which had reached 35 full-time employees, engaged in related diversification activities on multiple fronts and internationalized its market. Cattier was selling its champagne to markets such as the United States, Japan, and the United Kingdom. The company also created new product formats, developing signature branding and packaging. Cattier also partnered with fashion houses, bistros, and an international distributor owned by the American rap artist Jay-Z. However, Cattier faced a multitude of challenges in 2017. There was fierce competition in the home market, while sparkling wine consumption was down in all key European markets. Rising protectionism and the possibility of raising trade barriers in key export markets also created new risks. These challenges were compounded by the fact that harvest conditions for producing vintage wines were unpredictable. Cattier was considering using further diversification to manage these threats. However, how would diversification address Cattier’s problems?