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Luxury

Drawing on Krug’s roots and innovation to navigate luxury’s new reality 

Published 30 January 2025 in Luxury • 10 min read

CEO Manuel Reman blends Krug’s tradition with innovation, fostering deeper connections with global audiences and emphasizing authenticity to keep the champagne house relevant amid shifting tastes and sustainability challenges.

There is a lot for Manuel Reman to be concerned about. As the chief executive of Krug, a heritage champagne brand that has been around for more than 180 years, he faces a challenging marketplace where evolving consumer preferences, economic turbulence, and environmental challenges are all putting pressure on the global wine industry. Furthermore, the mood is changing; consumers expect more authenticity and perceived value from brands – from wines and spirits to watches, beauty, fashion, and accessories.

Last year, the alcoholic drinks market hit a total volume decline worldwide for the third time in 15 years, and champagne shipments in particular fell by 8.2% from 2022. Furthermore, Krug’s parent company LVMH reported a 9% organic revenue decline in the first half of 2024.

Still, for someone at the helm of a wine brand, he seems remarkably at ease.

For Reman, an industry veteran of 20 years, the key to facing those challenges is to acknowledge the need to adapt and evolve with the times, particularly on certain topics like sustainability, distribution, customer demand, and brand positioning. Krug, he says, needs to reassert its roots to generate authentic emotions. “We don’t need a revolution, but we do need to change things. Society is evolving. Consumers are evolving and we ourselves are evolving in our understanding of what we do.”

Thus, Krug is re-emphasizing its foundational principles. Joseph Krug’s decision in 1843 to blend as many as 120 different vintages, each from a particular plot out of 250 and an addition of 150 reserve wines, to ensure consistent quality and taste of champagne was a radical departure from the prevailing dependence on annual climatic yields.

Reman views a re-emphasis on explaining how unique and sophisticated this vinification approach is, as a way of showcasing the greater authenticity that society is expecting more from luxury. With customers increasingly questioning the ever-rising prices of luxury products, his approach aims to clarify Krug products’ intrinsic value too.

Innovation is Krug’s second engine of adaptation. Under Reman’s leadership, innovation has been, for example, directed toward sustainability – a pressing challenge for the wine industry. By modernizing practices to reduce environmental impact without compromising quality or taste, Krug demonstrates that tradition and evolution are not mutually exclusive but can be harmoniously integrated to address contemporary challenges.

Krug’s signature Grande Cuvée is a blend crafted from over 120 different wines spanning more than 10 years

How tradition is shaping authenticity

“What makes Krug unique is its craft,” he stressed. “For things to remain the same, you need to adapt. We need to take care of every single plot as if it were a different wine. We need to taste the grapes and make sure that we harvest them at the right time, even if it means that we need to move to another plot that is 60km on one day, harvest there, and then come back to the same plot.”

Krug’s commitment to meticulous craftsmanship is a defining aspect of its identity, allowing the house to consistently deliver an unparalleled product. The brand’s approach involves rigorous monitoring of its 250 vineyard plots, assessing their unique characteristics throughout the year to determine the precise timing of harvest. This precision not only preserves the integrity of the grapes but also minimizes waste, aligning with sustainable practices.

This process is also key to creating Krug’s signature Grande Cuvée, a blend crafted from over 120 different wines spanning more than 10 years. The result is a champagne with unparalleled complexity, offering a symphony of flavors and aromas that many competitors struggle to replicate.

Reman likens the process to painting with an expansive palette, where each wine contributes unique expressions, textures, and structures. “We don’t have one red, one blue, one yellow,” he explains, underscoring the creative potential of blending. “We have 36 blue, 110 red, 36 green, and 27 yellow.” This analogy highlights the artistry behind Krug’s process, where precision and innovation meet to create a product that transcends traditional champagne-making conventions, setting it apart from its peers, and justifying its high value in a difficult market.

Joseph_New winery_8_Léo Ginailhac©Erell Digital
“From 2010 onwards, Krug embraced the emotional allure of luxury by curating unique, multisensory experiences such as its Music Pairings.”

Redefining luxury: evolving to attract a new generation

Krug’s ability to reaffirm its authenticity has been critical in navigating a shifting market, particularly as younger consumers pivot toward natural wines and non-alcoholic options – segments that are redefining the alcohol industry’s growth trajectory.

Under the stewardship of LVMH, it has widened its brand positioning by broadening its audience within the luxury market. Historically revered by wine connoisseurs and gastronomy circles, Krug strategically redefined its identity by embracing the luxury codes of emotion and desirability.

From 2010 onwards, Krug embraced the emotional allure of luxury by curating unique, multisensory experiences such as its Music Pairings. These initiatives, involving composers and sound artists creating works inspired by Krug’s wines, exemplify how the brand integrates innovation with its heritage. This approach not only elevated its modern appeal but also ensured consistency across every touchpoint, reinforcing its status as a leader in experiential luxury.

“Everything we did at that time was to build this desirability as a luxury brand,” explained Reman. “It meant crafting experiences, consistency in everything you do…It was fantastic for the house because it brought everything to a level of excellence, of desirability, of emotion. And everything was about bringing emotion, feeling of touching all the senses… and it was an era when the house of Krug became much more modern.”

More recently, Krug has sought to reconnect with its roots to attract discerning wine aficionados. “We needed to bring back a little bit more authenticity. Because the more you are into the luxury world, the more you need to be rooted, to find a meaning to what you do, to what you share, to what your house will present,” noted Reman.

By balancing authenticity with luxury codes, Krug aligns its heritage craftsmanship with the evolving preferences of a global audience, demonstrating how legacy brands can adapt without losing their essence.

Krug has an innovative "ambassade" network of approximately 200 restaurants, bars, and hotels, along with influential chefs, sommeliers, and artists who embody and promote Krug's ethos

Krug lovers and Krug ambassades

Krug’s strategy to deepen its connection with “Krug lovers” reflects a deliberate effort to align luxury branding with another new success factor in luxury: experiential and cultural immersion. This global audience – gastronomes, hedonists, and adventurers – values unique, memorable experiences over traditional champagne consumption. Recognizing this, Reman said it targets dynamic, cosmopolitan locales like Paris, Bangkok, and Dubai, adding that they “need to be where they are” to expand beyond conventional wine markets to engage communities that appreciate craftsmanship and discovery.

“We need to be closer to what we call ‘the Krug lovers,’” he said. “We need to go to new regions and new spots – to people who would not usually be champagne drinkers, but instead are gastronomy lovers, or hedonists, people who love to have experiences and to discover things. We go beyond the traditional places.”

Central to this strategy is Krug’s innovative “ambassade” network of approximately 200 restaurants, bars, and hotels, along with influential chefs, sommeliers, and artists who embody and promote Krug’s ethos. By embedding the brand within local culture and fostering genuine passion among these ambassadors, Krug ensures a deeper, more authentic connection with its clientele. As Reman notes, this model is less about transactional partnerships and more about cultivating a shared emotional and cultural resonance.

“A Krug ambassade is more a face than a place,” said Reman. “We believe that we need to have people who will be trained and will be as passionate as we are about Krug, to lead this moment for us and to be able to accompany the clients in this moment, it’s an extension of us.”

Annual ambassador gatherings reinforce this sense of community and commitment, serving both as immersive brand experiences and as platforms for innovation. This relationship-focused approach positions Krug not merely as a luxury product but as an integral part of a curated lifestyle, demonstrating how heritage brands can thrive by building emotional equity in an evolving marketplace.

“It’s not just to entertain them, it’s also to make sure that they are (part of our) community,” said Reman. “It’s also to show them what we believe is the Krug experience, to inspire them to do the same with their friends. And sometimes they surprise us, they do much better than what we do. It’s not about a commercial agreement. It’s about love. It’s about marriage. It’s a wedding. We give, you give, and everybody’s winning.”

Being part of LVMH means that you have to be on your toes.
- Manuel Reman, Krug CEO

Share of heart or how to thrive within the LVMH family

Krug’s integration into the LVMH ecosystem provides strategic advantages that reinforce its ability to excel within a competitive industry. Leveraging LVMH’s centralized distribution network enables Krug to allocate resources toward its core strengths – craftsmanship and innovation – while benefiting from the group’s logistical and operational efficiencies. This synergy allows smaller brands like Krug to maintain focus on delivering exceptional quality without being encumbered by supply chain complexities.

Yet, the affiliation with LVMH brings more than operational support; it creates an environment that demands excellence. Reman underscores this dynamic, describing the dual challenge and motivation of competing within a portfolio of prestigious brands. The need for constant evolution fosters a culture of accountability and ambition, ensuring that Krug remains at the forefront of its industry.

“Being part of LVMH means that you have to be on your toes,” said Reman. “You cannot miss anything. And that’s great because it’s what makes our life both challenging and exciting. You always need to be a better version of yourself as a company, as an individual, as a leader.”

Within Möet Hennessy’s expansive portfolio, Krug distinguishes itself not through scale but through emotional resonance, a strategy Reman calls a share of heart. “Krug is a very small house, especially within the portfolio of Möet Hennessy. We don’t have a large share of voice. So, what we try to do is have a share of heart,” explained Reman.

By cultivating a tightly knit team culture and emphasizing deep, meaningful connections, Krug leverages its small size as an asset. This approach aligns the internal ethos with the brand’s external narrative of intimacy, craftsmanship, and heritage, reinforcing its unique position within both the LVMH family and the broader luxury market.

By meeting with every employee during his first two months, Reman demonstrated an inclusive style aimed at building a cohesive and engaged workforce, a foundation crucial for navigating the complexities of a heritage luxury brand.

Lessons in leadership: listening, transparency and openness

As the youngest CEO in Krug’s history, Reman exemplifies a modern leadership approach grounded in empathy, transparency, and decisive action. His commitment to understanding his team underscores the importance of relational leadership in fostering trust and collaboration. “I think it’s key to listen,” he said.

“Sometimes you have to make decisions in one day or one week that are tough,” he added. “It’s hard because you want to be loved by your teams, and sometimes you have to make decisions that you hope they understand.” This balance of empathy and decisiveness defines his leadership style.

By meeting with every employee during his first two months, Reman demonstrated an inclusive style aimed at building a cohesive and engaged workforce, a foundation crucial for navigating the complexities of a heritage luxury brand.

Yet, effective leadership also requires balancing this empathy with the ability to make challenging decisions. Reman acknowledges the inherent tension between being approachable and exercising authority, particularly in moments where tough calls are necessary. This duality reflects a leadership philosophy attuned to both the human and strategic dimensions of running a business.

Looking ahead, Reman’s vision for Krug prioritizes continuous improvement over static perfection. “I want Krug to be recognized for champagne that is always striving, always trying to be better than what we did before.” His emphasis on “striving to be better” reflects a forward-thinking strategy that aligns the brand’s legacy of craftsmanship with the evolving demands of a dynamic market, ensuring Krug remains both relevant and aspirational in a changing world.

Authors

Stéphane J. G. Girod

Professor of Strategy and Organizational Innovation

Stéphane J.G. Girod is Professor of Strategy and Organizational Innovation at IMD. His research, teaching and consulting interests center around agility at the strategy, organizational and leadership levels in response to disruption. At IMD, he is also Program Director of Reinventing Luxury Lab and Program Co-Director of Leading Digital Execution.

Expert

Manuel Reman

Chief Executive Officer, Krug

Manuel Reman was named CEO of the House of Krug in 2022. He began his career at the Boston Consulting Group as a strategy consultant before making his passion a profession by joining Moët Hennessy over 18 years ago as head of special projects.  Over the years he has taken on progressively senior roles in the luxury goods conglomerate LVMH, of which Krug is part.

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