Cautionary Tales with Tim Harford - The Widow Who Disrupted Champagne (with Ben Walter)

Episode Date: February 19, 2025

Tim Harford is joined by Ben Walter, CEO of Chase for Business and the host of "The Unshakeables" podcast, to explore the story of the trailblazing Widow Clicquot. Her namesake brand Veuve Clicquot revolutionized the champagne industry in the 19th century. Tim and Ben look at how she defied expectations and built one of the most iconic businesses in history.  This episode is sponsored by Chase for Business. For a full list of sources, see the show notes at timharford.com. See omnystudio.com/listener for privacy information.

Pushkin Tim Harford here with a bonus episode of Cautionary Tales. I have got an incredible story for you today about a pioneering businesswoman who disrupted the champagne industry and, in so doing, changed it forever. This episode is sponsored by Chase for Business and I'm joined by Ben Walter who is the CEO of Chase for Business and the host of his own rather brilliant podcast, The Unshakables. Ben, welcome to Cautionary Tales. Tim, thank you for having me. It's great to be here.

Well it's great to have you. So Ben, what comes to your mind when I say the word champagne? You know, obviously celebrations. I suppose the other thing that comes to mind for me is quality. Don't cheap out. Because for any of us who've ever been drunk on cheap champagne, you know that that's a one-time affair and you never do that again. I wouldn't know anything about that. I'm sure. So these associations of luxury and possibly of excess come to mind. What if I told you that all of this comes down to a single rather remarkable 19th century business woman? I didn't know that. On our podcast, we've had a number of incredible female entrepreneurs

who've achieved quite a lot. But hearing that it happened in the 19th century is a whole different ball of wax. She is quite a character. Barb Nicole Clico-Penardin. She essentially created champagne as a category, as we know it today. And she also took a struggling, family-run champagne house and she turned it into a global empire. And I should say it was partly about the way she marketed things.

She drove behavioral change around sparkling wine. I'm trying to picture what you have in your head. This is the 19th century. Women I don't think in France could have bank accounts at that time. And this woman revolutionized an entire industry. It is an astonishing story. And Ben, I'm going to tell you all about it. And I hope you will give me some of your reactions to the story.

Because I know you will give me some of your reactions to the story. Because I know you're a business expert, you've spoken to so many entrepreneurs on your podcast, The Unshakables. But before we get to that, I need to say I'm Tim Harford and you're listening to Cautionary Tales. Madame Clico was born, Barb Nicole Ponsardin, in 1777. So we're going back a quarter of a millennium. She was the daughter of a wealthy textiles industrialist and she came of age during the French Revolution. All of that turbulence and social change. The Ancien Régime disintegrating the middle class on the rise. And when she was 21, she married Francois Clico. He was the only son of her father's competitor, Philippe Clico.

And he was another textile businessman. So the marriage was effectively a business deal between the Clico and Penseudan families. And at this point, normally we'd tell a story about Barb Nicole becoming a wife and a mother. She would be expected, like all married women, to live in the shadow of their husbands. However, she and Francois ended up forming a business partnership. She was fascinated by winemaking. So was her husband, Francois. He was keen to grow his family's small wine business. And so the young couple together set about acquiring vineyards and learning all about the industry.

These were two textile families, right? In New York, we'd call it the rag business. So were they supportive of them going into the wine business? Not really. No, they weren't. I mean, Philippe Clico wasn't keen on his son's idea. He thought the textile business was going perfectly well. The wine business was something of a distraction. And you've got to bear in mind that Napoleonic Wars are on the horizon. And with Europe ripped

apart first by revolution, then by war, wine is not looking like a profitable business because it's going to disrupt all of the trade and all of the commerce. And of course, he was completely right. So, Francois and Barbnikol's business started to struggle. And in 1805, things got worse. Tragedy struck the family. Barbnikol's husband, Francois, died. Now, rumours at the time were that his business was going so incredibly badly that he had killed himself. That's actually unlikely. It's much more likely he died due to typhoid fever. But whatever the reason, he's dead. She is a widow. Her daughter, Clementine, is six years old, Barbara Cole herself, 27. And she is facing life as the

widow Clico, or as they say in France, laveur of Clico. Ah ha. Now this is starting to sound more familiar. So Philippe took pity on her, I suppose, and decided to back the business in the wake of the tragedy. Ben, I didn't bring you here to tell you a story about people who felt sorry for this woman. No, no, he didn't take pity on her. He clearly saw something in her, but he was at first just keen to close the wine business entirely. I mean, the money is in textiles. The wine business has been going badly. Why go ahead with this? But obviously that didn't happen in the end, right? I mean, there's a bottle of this stuff in my fridge right now. I'm very envious. Yes. I mean, the product's world famous. She basically somehow managed

to persuade him that her idea was worth backing or perhaps more likely that she was worth backing. He must have seen she was incredibly smart, incredibly driven. And she had some collateral. She was owed inheritance. And she said, look, instead of the inheritance, why don't you back my wine business? And he put in the equivalent of maybe a million dollars today, which says a lot about her. I think also says a lot about Philippe, because as you pointed out earlier, women in France at the time couldn't even have a bank account. And she is proposing that she is going to lead this huge and untried business. And it's also a male-dominated business. So who were the players? I mean, would we have heard of any of them?

Charles-Henri Heidseck, Jean-Rémi Moé. Have you heard of them? Those are certainly names that sound familiar. Were they well known at the time? They were very well known at the time. Moé in particular, he had this celebrity bromance with Napoleon and he used to advertise his wine by distributing these postcards showing Moé and Napoleon exploring wine cellars together. That's good to know the bromance is not a new phenomenon. Absolutely. Absolutely. Absolutely, absolutely. So this is the situation in which Barb Nicole approaches her father-in-law

Philippe. He said, okay, I will back the business, but you've got to learn something about wine. You've got to go and do an apprenticeship and learn the trade four years, figuring out how the wine business works. She agreed, she went off, she did her four-year apprenticeship. At the end of the four years, the business is still really struggling. And so she goes back to Philippe, her father-in-law, and she asks him for help yet again. And he agrees. Wow. I mean, so he must have really believed in her at some level. He must have done. I mean, we don't know why, but in any case, whatever it was that passed between them, he backed her a second

time. This is the point at which Barb Nicole decides she's going to have to take a gamble. Possibly she realizes if she doesn't make it this time, it's really a case of now or never. Yeah, we've had a number of entrepreneurs on the show who've told similar stories about being up against the wall and then betting it all on blacks, so to speak, because they have no choice. For example, we had a woman who owns a company called Desi Iwer. Her name is Desi Perkins and she went into a number of places to pitch and couldn't get

an answer and was running out of cash and really went for it and it came through. But you know, to go for broke, it takes courage to do that. Yeah, I mean, suppose to some extent, there's a degree of survivor bias that we see the ones who took the gamble and then the gamble paid off. But certainly my own research suggests there is something about that crisis that forces people to think differently and to explore new ways of doing things. That is something of a catalyst for business transformation, I think. So what happened next?

Barb Nicole foresaw that the Napoleonic Wars were likely to come to an end. And that when they did, that was going to free up trade between France and its foe, Russia. And that meant potentially a huge champagne market in Russia. And Barb Nicole was making a particular kind of champagne that she was confident would sell very well in Russia. It was incredibly sweet. Do you know Sauternes, the dessert wine, Ben? Ben But it was very sweet. It was actually twice as much sugar even as modern Sauternes. So this is like drinking Baileys or hot chocolate or something. I mean, it's a very, very sweet

sparkling drink. And the widow Kliko, she decides when the war ends, Russians are going to go for this. She smuggles bottles of her best vintage, the 1811 vintage, to Amsterdam, knowing that if the war does finish, they will be very well placed to be shipped to Russia at that moment. So she's taking this risk because if the war doesn't end, then she's not going to get any return from this wine. But if it does, she is perfectly timed to profit. There's sort of three brilliant moves she makes at the same time. One is really knowing her product market fit, right? She knows that this incredibly sweet drink fits the Russian palate.

Two is being aware of the macro effects of what's going on around her, knowing the war is going to end and that will open up trade. And then three is having the guts to smuggle this stuff into Amsterdam so she can get a jump on the competition. That's quite a combination. Yes, the risk comes good. Madame Cliquot's champagne makes it to Russia, beating her competitors, including Monsieur Moet, by several weeks. She gets influencer support, 19th century style too. The Tsar says that Verve Cliquot is the only champagne he will drink. And of course, once he says that, the entire Russian court has to follow suit. It's a perfect product. It is there

at the perfect moment. That though poses its own problems because she suddenly got this massive demand to make this kind of champagne. And at the time, making champagne is extraordinarily difficult and the whole production process is very inefficient. Yeah, Tim, when people are successful, that can suddenly bring up a new range of challenges. We spoke to Melissa Gallardo, who started a candle company called Benita Fierce Candles. And when her sales took off, she didn't know how to keep up with production. I mean, she had people in her home just making candles

as fast as they could possibly make them because she had a moment and she had to capture it. Yeah, I mean, this is exactly the problem that Barbany Cole faced. And she realizes she has to do something to change that. But in this case, it sounds like she had to become a bit of an engineer. Yeah, so all champagne has a sediment.

It makes the drink cloudy. That's not what people want. They want a clear champagne. That's true now. It was certainly true at the time. But to filter out the sediment is this very time consuming business. What Madame Cliquot invented was called a riddling table. So riddling is the process of getting the sediment out. And this is a kind of wooden frame with holes bored into it, allowing the bottles to be suspended at different angles. So they're basically upside down on a diagonal. And you put the bottles in this frame and then these expert wine riddlers come up and they give it a sharp quarter turn every now and then. And every time you have this quarter turn, you're changing the angle of the bottle and you're very gently

disturbing the sediment. You're not mixing it back into the wine. You're letting it slip to the bottom of the bottle. And of course, because the bottle is upside down, the bottom of the bottle is the neck. So you've got this sediment gathering in the neck and you can take it out of the bottle easily. So this riddling contraption, this riddling table is the killer app that makes it much much easier to get the sediment out of the champagne. And her competitors absolutely cannot work out how she is doing this. How is she making so much champagne so quickly? Moe figured it out eventually,

but it took him 15 years to catch up. You know, Tim, she was innovating in a physical product that had been around a long time. And it's interesting because that never stops. We interviewed someone on the podcast who has a company, Sabanto, that is changing the way that you plant and harvest corn. We've been consuming corn for thousands of years.

He's developing automated tractors that can plant and reap the crops. I think people fall into a trap where innovation only happens in sort of the advanced sectors of tech. And actually, there isn't an industry around that's not waiting around to be disrupted. Yeah, I think that's absolutely right. And the wine industry, as Barb Nicole showed, is clearly one of them. And one of the things that Madame Cliquot did here was not just invent the process, but keep the process a secret. So she had real loyalty from her employees who presumably could have gone to one of her competitors and collected some kind of reward,

but none of them did. And that may have been because she had this profit sharing system. So they were all making money they felt looked after, and they did not betray her secrets. She was shrewd in a number of ways. Is this approach of treating your work as well, sharing the gains, something that you've encountered yourself Ben? Loyal employees are critical. I would just say that loyalty and employment is only partially about pay and ownership. Particularly in today's world, it's about that plus, creating the right environment,

making people feel valued and like they belong and like they have purpose. So I think the right compensation structure is important, but it's not the whole ballgame. Yeah. Listeners to our episode on the building of the Empire State Building might recognise this. Paul Starrett, who was in charge of that project, was in some ways an incredibly generous employer. He paid the workers very well. The conditions were great.

There was great food. Safety standards were very high. But at the same time, he watched them absolutely like a hawk. He had really, really tough-minded site managers cracking down on fraud and theft and so on. So there was this sort of sense of like, I'm going to absolutely insist on the best possible behaviour, but at the same time, I'm going to reward that. You know, success is the best retention tool there is. And success gives you the right to be tougher because people want to be in an environment

of success and they want to rise to the occasion. You talked earlier about the fact that she basically established the category. She drove large-scale behavioral and intent of change across an entire continent, it sounds like. How did she do that? Tell me more about that. I think it's a fascinating case study. So at the time, champagne itself was not the drink it is today. And the champagne region was not famous for sparkling wine. It was famous for still white wines. So by reaching these influences, reaching the tsar, by producing this drink

that perfectly matched people's taste, and by creating something that seemed luxurious but at the same time was cheap enough to be affordable because she had made the production process more efficient, and to make it available at scale, she creates this whole category. Suddenly this drink is something that the Tsar demands and yet the ordinary middle classes can afford it. And it basically becomes the drink of celebrations everywhere. She established all of this. By the time she died in 1866, the widow Clico had a global empire. She was exporting her wine as far afield as the United States. Sales had reached 750,000 bottles a year. That is up from 17,000 bottles back in 1811 before her big breakthrough.

The brand is now so well recognised. I think it's the second most popular brand of champagne in the world. If you go into a bar in France, I understand that you can simply ask for a glass of the widow and people will know that you want Verve Clicquot champagne. Tim, what's interesting about that is we think that hyper scaling is a modern phenomenon. You look at the likes of Apple or Amazon or Google or some of the other more recent startups that have gone global with their impact. And while the time scales might have been longer, this was maybe 50 or 60 years as opposed to five or 10. The impact, even back then, could be global in scale in terms of how far reaching some of these insights and innovations can be.

Yeah, absolutely. It's partly about developing the product that people want to drink. It's partly about the marketing, that people want to drink. It's partly about the marketing, but it is also about the production. You gotta be able to make this stuff. You have to get all of these things right. And that's what she did. Yes, and aspiration and luxury is a timeless phenomenon. Something else timeless is the motivational business quote.

And I actually have a motivational business quote from Widow Cleco. I rather like this one. This was a letter she wrote to one of her grandchildren and she commented, the world is in perpetual motion and we must invent the things of tomorrow. One must go before others, be determined and exacting and let your intelligence direct your life. Act with audacity. What an incredible woman. I hope that aspiring female and frankly,

male entrepreneurs can hear this story because the woman was groundbreaking in so many ways. I don't speak French. I didn't know what the word Verve meant. So I kept waiting for Tim to tell me that she married Mr. Verve. And it turns out she did it all on her own. And I think that's fantastic, what

she was able to accomplish as a woman in early 19th century France. I'm just bowled over by that. I think about innovation, resilience, scale, grit, vision. These are things we talk about all the time in business circles. And she had them in spades and pioneered them

to something that has stood the test of time in more ways than one. No, Ben, I will drink to that. Ben Walter, thank you very much for joining me on Cautionary Tales. Thanks so much for having me, Tim. What a great story. This episode was sponsored by Chase for Business and I was talking to Ben Walter, who is the CEO of Chase for Business. You can of course find the Unshakables wherever you get your podcasts and there will be a new episode of Cautionary

Tales in this feed very shortly. For a full list of our sources, see the show notes at timharford.com Cautionary Tales is written by me, Tim Harford, with Andrew Wright, Alice Fiennes and Ryan Dilley. It's produced by Alice Fiennes and Marilyn Rust. The sound design and original music are the work of Pascal Wise. Additional sound design is by Carlos Sanjuan at Brain Audio. Ben Nadaph Haferi edited the scripts. The show features the voice talents of Melanie Gutridge, Stella Harford, Oliver Hembra, Sarah Jupp, Marceya Monroe, Jamal Westman and Rufus Wright. The show also wouldn't have been possible without the work of Jacob Weisberg, Greta

Cohn, Sarah Nix, Eric Sandler, Carrie Brody, Christina Sullivan, Keira Posey and Owen Miller. Cautionary Tales is a production of Pushkin Industries. It's recorded at Wardour Studios in London by Tom Berry. If you like the show, please remember to share, rate and review. It really makes a difference to us. And if you want to hear the show ad- free, sign up to Pushkin Plus on the show page on Apple Podcasts or at pushkin.fm slash plus.