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Asian Surge Spurs Moet Hennessy To Strong H1 Growth, But U.S. Still Challenging

July 26, 2011

Sparked by double-digit organic volume growth for its Champagne unit and Hennessy Cognac’s solid progress, Moët Hennessy’s overall spirits and wine sales rose sharply in the first half of 2011 (ended June 30). However, faced with a weakening dollar, an off-premise channel still characterized by trading down and discounting activity and a challenging on-premise environment, the drinks marketer is still facing an uphill climb in the U.S. While the Paris-based Moët Hennessy’s first-half revenue advanced by 10.2% over the year-earlier period to reach €1.435 billion ($2.08b), its U.S. revenue declined by 2% to €344.4 million ($499.4m)—even as both its Champagne business and key spirits brands experienced first-half volume growth in the market.

With Hennessy, Grand Marnier and Belvedere all on the rise in the first half, Moët Hennessy USA’s spirits sales volume grew by nearly 5% in control states, according to NABCA. IRI reported similar growth for the MHUSA portfolio for the 24 weeks ending July 10. However, the negative currency exchange impact (the U.S. dollar fell by around 8% versus the euro during the first six months of this year, compared to its 14% rise against the euro during the first six months of 2010), still-struggling on-premise market and difficult pricing climate have hurt the company’s bottom line.

Moët Hennessy’s lackluster results in the U.S.—and its native Europe—have been offset by the company’s rapid rise in Asia. Propelled by Hennessy’s solid growth in China and Vietnam, Moët Hennessy’s first-half revenue in Asia (excluding Japan) jumped by 26.5% to €444.85 million ($645m). That impressive upswing has made Asia Moët Hennessy’s biggest market. A year ago, Europe accounted for 28% of the drinks marketer’s revenue, while the U.S. and Asia were both at 27%. By the end of the first half of 2011, though, Asia’s share had risen to 31%, while Europe’s and the U.S.’s had fallen to 25% and 24%, respectively.

Moët Hennessy USA – Leading Brands
(thousands of nine-liter case depletions)
Brand 2007 2008 2009 2010 Percent
Change3
2009-2010
Hennessy 2,298 2,160 2,117 2,138 1.0%
Grand Marnier 539 510 483 473 -2.2%
Moët & Chandon1 557 425 386 406 5.0%
Belvedere 410 389 369 396 7.2%
Veuve Clicquot 354 370 344 365 6.3%
Domaine Chandon 432 344 348 350 0.6%
Total Top Six2 4,590 4,198 4,048 4,128 2.0%
1excludes Dom Pérignon
2addition of columns may not agree due to rounding
3based on unrounded data 

Source: IMPACT DATABANK

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