The Most Bril­liant Marketing in the History of Wine

As soon as Jay-Z caught wind that an executive at the company that produces Cristal Champagne would prefer people like him didn't consume his products, Jay-Z replaced Cristal with Krug and Dom Pérignon in his clubs. But it didn't stop there. As someone who hangs around with the great American capitalist Warren Buffett, Jay-Z smelled an opportunity for both revenge and profits.

Jay-Z's next video, “Show Me What You Got,” showed him choosing an obscure brand of Champagne called Armand de Brignac. With the flick of his wrist, he singlehandedly lifted the brand into the heights of celebrity chic—Cristal, Dom and Krug were no longer cool.

People naturally suspected that Armand de Brignac was a business venture of Jay-Z. However, two days after the video's release, Armand de Brignac attempted to dispel rumors of a financial connection. Representatives issued a press release explaining that the wine was simply an “ultra-luxury product in the high-end champagne category” that was “making its North American debut this year, after enjoying success as a pre­mium, high-end brand in France.”

All of this makes for a great story: a family-owned champagne brand dreamed up by a little old French lady in the 1950s, dormant until resurrected half a century later, promptly discovered by the world’s most famous rapper, by sheer coincidence.

While the appearance of authenticity is real, if you pull back the curtains you find nothing more then a rebranded bottle of $60 champagne now selling for over $200 thanks to a certain endorsement.

This interesting bit of investigative journalism from the Atlantic goes digging and finds Jay-Z gets to have his champagne and drink it too.

Jay-Z publicly denies any connection to Armand de Brignac because he wants to be seen as a connoisseur, a trendsetter with the sophistication to anoint a successor to Cristal. Or, as Bienvenu off­handedly explained to me: “He doesn’t want to be considered a brand ambassador or something like this.” More importantly, Jay-Z realizes that the revelation of a financial connection could endanger the authenticity of his endorsement—and jeopardize a lucrative arrangement.

The math looks extremely favorable for Jay-Z. The production cost per bottle of Armand de Brignac is about $13; the wholesale price is $225. The maximum output is 60,000 bottles per year. If Jay-Z splits the $212-per-bottle profit evenly with Cattier and Sovereign, a back-of-the-envelope calculation suggests his annual take would be a little over $4 million. One of my sources confirmed that number, and added that Jay-Z may have received equity in Sov­ereign Brands worth about $50 million. All for dropping a few lyrical references and featuring Armand de Brignac in a couple of videos.

The Atlantic took the story off their site, but you can find a copy of it here.

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