How does a legendary French château maintain quality while producing more than one million cases of wine each year, each bottle selling for around $10 each? “I think you should come to visit us in Bordeaux to see how we do it,” responds Adrien Laurent, North American export manager of the Baron Philippe de Rothschild S.A. wine company.  

For those who cannot afford a trip to a château better known for its thousand-dollar first growths, what follows is a short trip through history that begins with a disastrous Bordeaux vintage and ends with a shiny new varietal wine – a Bordeaux sauvignon blanc – set for worldwide release in March 2013.

In 1930 France’s premier wine-growing region experienced “the first of three atrocious vintages," writes Michael Broadbent in “The Great Vintage Wine Book II.” That year, many Bordeaux growers suffered “complete crop failure, thanks to inclement weather.”

Despite the dire harvest, Baron Phillipe de Rothschild (1902–1988) turned his crop into wine. “He said, ‘This is not good enough for Mouton. However, it’s delicious. I should do something about it,’” reports Laurent.

The descendant of the famous French banking and wine dynasty had taken over the Mouton Rothschild estate in the Haut-Médoc in 1922 when he was just 20 years old. He called the very first branded wine Mouton Cadet, which translates from French as “the youngest brother of Mouton.”

Once weather conditions improved, the château resumed normal production of its top-quality wine, but by that time Paris restaurateurs were hooked by Mouton the younger, and they kept asking for the new second label. The vines on the baron’s estate were destined for a much higher tier of production, so he didn’t have the grapes to satisfy demand.

In a first for Bordeaux châteaux, the baron began sourcing wine from outside of his own estate. By the 1950s, Mouton Cadet was introduced to the United States and British markets, and by the 1970s and 1980s, Château Mouton Rothschild’s high-volume commercial wine had become the number-one-selling Bordeaux wine in the world.

Today, the company that bears the baron's name presides over three renowned Bordeaux châteaux as well as operations in the Languedoc, California and Chile. It produces 13 million bottles of the red, white and rosé Bordeaux blends that make up the Mouton Cadet line. Twenty percent stays in France, and the rest is sold in 150 different markets. In a review of the 2008 and 2009 Mouton Cadet vintages, one blogger in the United States told readers that “if your supermarket carries any French wine, it’s probably this.”

A few years ago, eight decades after the launch of Mouton Cadet, French winemakers faced another perfect storm that, surprisingly, had nothing to do with the weather. With the onslaught of the global financial crisis in 2008, French wine and spirit exports began dropping and continued to fall sharply through the beginning of 2009, according to the French Federation of Wine and Spirits Exporters.

A strong euro hampered recovery by making French wines comparatively more expensive on the international market. And while exports had started to pick up by 2010, there was a problem that had been brewing for about two decades that became impossible to ignore: French wines had declined in popularity worldwide, especially in the country that drinks the most wine and is Mouton Cadet’s number-one export market, the United States.

“France is still the standard-bearer of fine wines,” says The New York Times’ chief wine critic, Eric Asimov. But he adds that its wine industry “has a lot of issues to face” at the more affordable price points. “The lower end isn’t doing so well. They’ve been trying to adapt, but I think they’ve got a really long way to go to compete with the New World in that category.”

Large-scale producers in countries such as Chile and Australia offer stiff competition with their abundant supply of low-cost, high-volume wine, much of which is labeled by grape variety rather than region. Labeling by grape is a departure from the terroir-driven rules of Europe, which ultimately limit how much of a given kind of wine can be produced, and where.

“The grape variety is a commodity concept,” flying winemaker and consultant Alberto Antonini told Wine-Searcher in a recently published interview. Antonini, who has made wine for heavy-hitting producers in most of the major wine regions of the world, explains that while grapes can be grown anywhere, “the regions are unique.”

Until 1995, Château Mouton Rothschild made only Appellation d'Origine Contrôlée (AOC) wines that followed the strict French rules of terroir. But after noticing the burgeoning worldwide interest in varietal wines, Baron Philippe de Rothschild’s daughter, Baroness Philippine, began projects in the Languedoc and Chile.  

Today among American consumers grape is king, especially with the emerging generation of drinkers, or “millennials” as marketers have dubbed them. When customers walk into a shop, “most of the time, the first two things that are talked about are price point and varietal,” says Tiernan Hogan, a salesperson at The Party Source wine and spirits store in Bellevue, Kentucky.

Despite challenging times for the French wine industry, whose sales declined by about 7 percent last year, Mouton Cadet's export sales actually grew 7 percent worldwide, and 9 percent in the United States in the same period, says Laurent. And roughly a third of that growth is thanks to an addition crafted specifically for the American market.

Launched in August 2010, Cadet d’Oc is a sub-brand of Mouton Cadet that was developed with a dose of New World inspiration. The wines are labeled by varietal, though with a name that implies a firm regional connection. The Cadet d’Oc name refers to the Vins de Pays d’Oc classification from the Languedoc region of France where the fruit is sourced.

“It’s about introducing Americans to a different country of origin using terms they were familiar with,” explains Angus Lilley, marketing director for United States sales of Mouton Cadet at New York-based Constellation Brands. “They may not know much about France or French wines, but they’re more willing to take an educated risk on the fact that they know the varietal.”

For about $10, American shoppers can choose from a cabernet sauvignon, a pinot noir or a chardonnay. The best seller in restaurants has been the chardonnay, while the reds have led the charge in retail stores. Hogan reports that at The Party Source in Kentucky, Cadet d’Oc is selling at a “slow but steady pace.”

The new wines are produced using the well-oiled Mouton Cadet infrastructure, which includes what Laurent calls “probably one of the most efficient wineries in France." It opened in 1993 in Pauillac, a commune in the Haut-Médoc district on the left bank of Bordeaux.

Historically, the company bought wine in bulk on the free market to be blended and bottled at the Pauillac winery. But an overhaul of the selection process began about a decade ago in an attempt to find a better way to maximize quality. “We’ve decided to select the parcels, the blocks, the vineyards ourselves,” explains Laurent.

A team of enologists from Pauillac now regularly travels south to the Languedoc to meet growers and select the blocks of chardonnay, pinot noir and cabernet sauvignon for three-year contracts. The team chooses the date of harvest, follows the producer throughout the vinification process, and then blends and bottles the wines in Pauillac. So far, as much as two-thirds of what goes into Cadet d’Oc bottles is sourced this way. The same is true for about 90 percent of the wine used in the three staple Mouton Cadet Bordeaux blends, which comes from 301 contract growers in Bordeaux.

Growers’ contracts are based on the quality of wine produced, rather than quantity, and they are paid above market price per barrel. “Our way of working is completely different from other négociants that probably have a deal with these large chains, and therefore they need the wine to be actually sold and shipped in the next two months,” says Laurent. “Right now, we’re going to start working on the 2012 vintage that we will sell in 2014–15. So we are looking at long-term relationships.”

Varietal wine projects have so far treated the company well, and so in March of 2013 a new addition to the Mouton Cadet family will launch worldwide. The 2012 Bordeaux Sauvignon Blanc, with screw cap, will sell at the same price point and on the same scale as Mouton Cadet Bordeaux blends. The managing director of Baron Philippe de Rothschild S.A., Hugues Lechanoine, says the new entrant will be a great option for restaurants to sell by the glass, since the screw cap makes for easier fridge storage.