Rémy Cointreau “Staying The Course” Despite Cognac Headwinds

After revealing operating profit down 28% organically to €304 million ($331m) for its fiscal year ended in March, Rémy Cointreau executives said yesterday that the company will hold price despite tough conditions in the Cognac market. The group had previously reported sales down 19% to €1.2 billion ($1.3b) for its full fiscal year.

“In the U.S. the group is facing strong headwinds including destocking, inflation, increased promotional activity and last, but not least, a sharp normalization in consumption,” CEO Eric Vallat told analysts. “Impacted by VSOP, this has led to a loss of market share from last year for Cognac while Cointreau and The Botanist continued to grow their market shares.”

Still, Vallat added that “despite a chaotic short-term situation, we are staying the course and resisting the temptation to take short-term measures that could undermine the potential of longer-term value creation. Strong price consistency is a prerequisite for building desirable brands and I am convinced that this consistency will allow us to emerge stronger from the current crisis.”

In line with that longer-term focus, Vallat noted that the group is now investing behind its brands “in a more selective and pragmatic way,” with 20% of sales allocated to A&P in the Americas region, up by six points versus pre-pandemic. Among its key initiatives moving forward, Vallat said the company will sharpen focus on Rémy Martin VSOP, including increasing support for the 375-ml. size, “which is a great format to recruit in times of inflation.”

According to Impact Databank, the flagship Rémy Martin Cognac brand saw U.S. depletions fall 23% last year to just under 800,000 cases. Among other key labels, Cointreau grew 1% to 468,000 cases in the U.S. last year, while The Botanist gin rose 4% to 89,000 cases, Mount Gay rum slipped 10% to 125,000 cases, and Bruichladdich Scotch whisky was down slightly to 9,000 cases.—Daniel Marsteller

GET YOUR FIRST LOOK AT 2025 ESTIMATES AND 2030 PROJECTIONS FOR THE WINE AND SPIRITS INDUSTRIES. ORDER YOUR 2025 IMPACT DATABANK REPORTS. CLICK HERE.