Moët Hennessy Sales Down 8% Through Three Quarters, But Hennessy Returns To U.S. Growth

Moët Hennessy has posted sales 8% down on an organic basis to €4.2 billion ($4.6b) for the nine months through September, citing ongoing normalization in the drinks market and soft conditions in the U.S. and China. Still, the company noted that Hennessy Cognac returned to U.S. growth in the second quarter and continued its positive progress over most recent three months.

Despite seeing U.S. volume decline over the past two years to 3.1 million cases, Hennessy remains the fourth-largest spirits brand in the U.S. in retail value terms at $1.8 billion, according to Impact Databank, outranked only by Tito’s, Crown Royal, and Don Julio. While Hennessy’s volume is down about 5% in control states year-to-date, it’s outperforming the Cognac market, and the company has seen shipments turn positive marketwide over the past two quarters.

“Hennessy saw another quarter of growth in the U.S. driven by VS restocking, and the gradual realignment of sell-in and sell-out after excessive destocking by retailers at the beginning of this year,” LVMH director of financial communications Rodolphe Ozun told analysts. Hennessy VS recently received a packaging refresh and updated label in the U.S. as its marketers look to restore momentum.

Overall, Moët Hennessy’s Cognac & Spirits division—also including brands like Belvedere vodka, Glenmorangie single malt Scotch, and Woodinville Whiskey, among others—saw organic sales decline 11% to €2.1 billion ($2.3b) for the first nine months of the fiscal year. The company most recently targeted the American whiskey segment with Sir Davis ($89), a collaboration with Beyoncé Knowles-Carter, which rolled out last month.

Sales in the luxury giant’s Champagnes & Wines unit dipped 6% organically to €2.1 billion ($2.3b) for the nine-month period, with the company citing cautious consumer spending as holding back revenues. Still, Ozun noted, “Our rosé wines are continuing to enjoy solid growth, including Chateau d’Esclans but also Chateau Minuty which we acquired last year.” Moët Hennessy also recently took a 30% stake in non-alcoholic sparkling wine French Bloom for an undisclosed sum.

In Champagne, both Veuve Clicquot and Moët & Chandon saw volume declines in U.S. control states through July. But the company continues to see promise in the prestige segment. Scott Bowie, SVP of Champagne & Sparkling at Moët Hennessy, recently told SND, “The outlook for vintage and prestige Champagnes is promising. We’ve seen an increased interest in our higher marques year over year.”

Summing up recent conditions, Ozun said Moët Hennessy’s sales have “improved modestly compared to the first half of the year as we started lapping easier comps in Q3. Regional patterns are broadly unchanged with soft depletions in Europe and the U.S. partially compensated by growth in Japan. But all regions contributed to the sequential improvement.”—Daniel Marsteller

Tagged : Belvedere, Glenmorangie, Hennessy, Moet Hennessy, Veuve Clicquot

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