Moët Hennessy, Rémy Cointreau Aim For Gradual Recovery In Cognac

After a dramatic downturn in Cognac over the past two years, top players Moët Hennessy and Rémy Cointreau are seeing some green shoots in the category, while noting that trade inventory levels continue to be high and buyers remain cautious.

Moët Hennessy said it gained share in the U.S. Cognac category in the first half, with Hennessy seeing sales volumes return to growth in the second quarter. Still, the company added that it remains a “wait-and-see market environment” at the moment. According to Impact Databank, Hennessy slipped 16% to 3.1 million 9-liter cases in the U.S. last year, but continued to lead second-ranked Rémy Martin by more than 2.3 million cases at the top of the category.

Overall, Moët Hennessy saw its global sales decline 9% to €2.8 billion ($3b) in the first half of the year, with profit from recurring operations down 26% to €777 million ($843m). “Champagne was down, reflecting the ongoing normalization of post-Covid demand, but remained significantly higher than in 2019,” the company noted. “Moreover, the beginning of the year was compared to a good first half of 2023.” While Hennessy could be turning a corner in the U.S., the brand was “held back by weak local demand in the Chinese market.”

Moët Hennessy’s sales are roughly evenly split between its Champagnes & Wines and Cognac & Spirits units, with the former down 8% in the first half and the latter declining by 10%. In addition to Champagnes like Veuve Clicquot and Moët & Chandon, the wine division includes Chateau d’Esclans, Joseph Phelps, Chandon, Newton, Cloudy Bay, Numanthia, and Terrazas de los Andes, among others. Beyond Hennessy Cognac, the spirits unit’s portfolio includes brands like Belvedere vodka, Glenmorangie and Ardbeg single malts, Volcan de mi Tierra Tequila, and Woodinville Whiskey Co.

At Rémy Cointreau, which has taken a firm position on pricing amid the Cognac downturn, destocking continued to have a marked impact in the company’s fiscal first quarter through June, as sales fell 16% to €217 million ($236m). The Cognac division, accounting for the majority of sales, slipped 12% to €136 million ($148m). “In the U.S., ongoing destocking in the face of persistently low depletions continued to take a heavy toll on sales in an overall market struggling with a fiercely promotional environment and depressed consumer demand,” the company said.

Rémy’s Liqueurs & Spirits division also saw sales decrease, down 20% on similar destocking issues, although the company noted that its Cointreau liqueur and The Botanist gin brands are showing positive depletions. Compared with pre-pandemic, the Liqueurs & Spirits division—which also includes labels like Bruichladdich single malt Scotch and Westland American single malt—is still up 35%, but the Cognac unit is down by 17%.

Looking ahead, Rémy Cointreau expects a gradual recovery in sales as destocking issues clear up over the coming months, but now sees the current fiscal year as continuing to be a transitional period, with its longer-term growth likely to return to high single-digits only next year.—Daniel Marsteller

Tagged : Hennessy, Moet Hennessy, Remy Cointreau, Remy Martin

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