Interview: Moët Hennessy’s Giles Woodyer On The Explosive Growth Of Hennessy CognacNovember 8, 2017
With Cognac reaching unprecedented heights in the U.S., Hennessy has been leading the charge, accounting for 68% of the category’s volume.The brand neared 3.7 million cases last year on 22% growth and has expanded by more than 1 million cases since 2015. Perhaps the only thing that can slow Hennessy’s torrid growth right now is a supply constraint, though in recent weeks Moët Hennessy unveiled a new bottling facility that will expand annual production capacity by 40%, to 10 million cases, by 2020. SND assistant editor Shane English recently caught up with Giles Woodyer, Hennessy’s senior vice president for the U.S., to get an update on the supply situation and the medium-term outlook.
SND: Moët Hennessy has noted that a shortage of Hennessy, notably VS, has impacted growth in recent months. Do you expect that situation to affect holiday sales?
Woodyer: As a direct result of this surge in demand and the time it takes to craft a product of this quality, Hennessy will need to manage supply carefully, but the brand will continue to grow. We’ve allocated our stock to ensure that we meet market demand to the best of our ability over the holidays—a time when many consumers look to experience Hennessy’s higher marques.
SND: How are those higher marques faring in relation to VS (SRP $35), which accounts for nearly 90% of volume in the U.S., according to Impact Databank?
Woodyer: We set ourselves a challenge a few years ago to unlock the potential of the whole portfolio. Hennessy VSOP ($45) today, from a volume and value standpoint, is the largest it’s ever been. We’ve invested tremendously behind Hennessy VSOP the last three years, starting with digital ads. This year we did broadcast advertising for the first time, called “Harmony: Mastered from Chaos,” and received a strong response. VSOP is recruiting not only through Hennessy VS but also from other brown spirits categories. We’re seeing trade-up throughout the portfolio. Hennessy XO ($200) has tripled in size in the last three years, and we’re excited about continuing that growth in 2018. We’ve also grown Hennessy Paradis Imperial ($2,800) in the high double-digits the past two years. We want to make it the number-one ultra-prestige Cognac. We have strong double-digit growth plans for all of our qualities with the exception of VS, which is clearly operating off of a much higher base.
SND: What initiatives have been most successful at bringing new consumers into the Cognac category?
Woodyer: We’re reaching out through both traditional and experiential education programs. Le Voyage, our experiential platform, is a large-scale initiative to teach people how Cognac is made, about the different qualities, and about Hennessy cocktails. This program will come to life not only through on-trade venues but also through retail partners. We’ve recently conducted several seminars with Total Wine, and we plan to expand that to our other retail customers.
SND: Where do you see the brand and the category headed over the longer term?
Woodyer: We’re at the tip of the iceberg in terms of the potential for Cognac overall and Hennessy in particular. I think the speed at which Cognac will be adopted over the next four to five years will be far greater than it has been previously. If you look at the 21-29-year-old segment, they’re far more willing to experiment and come directly into Hennessy than earlier generations.Subscribe to Shanken News Daily’s Email Newsletter, delivered to your inbox each morning.
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