Rémy Cointreau: U.S. Cognac Recovery Could Take Time

Rémy Cointreau has continued to battle tough conditions in the U.S. Cognac market recently, as the French drinks player posted organic sales down 19% to €1.2 billion ($1.3b) for its full fiscal year through March. Better sales in China helped boost Rémy’s recently completed fourth quarter, however, in which revenues were roughly flat.

According to Impact Databank, the flagship Rémy Martin Cognac brand saw U.S. depletions fall 23% last year to just under 800,000 cases, as Rémy Cointreau has opted to hold pricing firm and focus on its long-term positioning rather than match competitors’ promotions. Its Americas division saw sales fall 40% for the year, “reflecting continued major destocking in an environment marked by inflation, more intense promotions, and strong post-Covid normalization of consumption,” according to the company.

Recent declines in the U.S. were amplified by shipment phasing in recent months, as the group completed most shipments for its Liqueurs & Spirits division in the third quarter, resulting in a softer final three months to the year. Rémy’s Liqueurs & Spirits division includes Cointreau, which grew 1% to 468,000 cases in the U.S. last year, according to Impact Databank, as well as The Botanist gin (+4% to 89,000 cases), Mount Gay rum (-10% to 125,000 cases), and Bruichladdich Scotch whisky (down slightly to 9,000 cases) among others.

As it continues to confront an “adverse environment and an intensely promotional market in the U.S.,” Rémy sees recovery in the Cognac segment as being pushed to at least the second half of its current fiscal year. In the meantime the company plans to cut costs where possible, protect gross margin, and maintain “a strict and uncompromising pricing policy.”—Daniel Marsteller

Tagged : Botanist, Bruichladdich, Mount Gay, Remy Cointreau, Remy Martin

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