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Interview: Moët Hennessy CEO Philippe Schaus On The Spirits Portfolio’s Progress

May 17, 2019

In October of 2017, LVMH named Philippe Schaus president and CEO of its Moët Hennessy unit, replacing Christophe Navarre, who had led Moët Hennessy since 2001. Schaus, an LVMH veteran, joined the company in 2003 and previously headed its Vuitton and DFS divisions. At Moët Hennessy, Schaus is leading an operation that’s firing on all cylinders. Over the past five years, flagship Hennessy has seen its global volume rise from 5.7 million cases to 7.7 million cases, reaching a 48.5% share of the global Cognac market. In the U.S., Hennessy added nearly 1.5 million cases from 2013-2018, hitting 3.7 million cases last year for a 64% U.S. market share. SND editorial director David Fleming met recently with Schaus to get an update on progress within the Moët Hennessy spirits portfolio.

SND: Looking at the spirits side, the flagship Hennessy has had tremendous success in the U.S. Growth is mainly at VS tier, which still accounts for about 90% of U.S. sales. How are you pushing sales of the higher marks, particularly VSOP but also XO?

Schaus: We’ve just launched a new campaign for XO, centered around a four-minute movie by director Ridley Scott, which explains XO’s seven key tasting notes, defined by our tasters in Cognac. It’s an absolutely amazing film, and is garnering unprecedented interest. We’ve also increased our focus on point-of-sale activity, and are (displaying) VS, VSOP, and XO together. Through our network of private sales, we’ve been increasingly successful at placing Paradis and Paradis Imperial with wealthy customers, who want to have that ultimate Cognac experience with blends of eaux-de-vie, some of which are more than 100 years old.

SND: How have supply constraints impacted progress at Hennessy?

Schaus: Demand exceeded our expectations, and so we became victims of our own success. That, combined with a difficult harvest in 2017, forced us to go on allocation. But things have since evolved. We had a good harvest in 2018, which will help the long-term plan. More importantly, we’ve been able to convince the Bureau National Interprofessionel du Cognac (BNIC) to increase Cognac’s planting area for the first time in many years. Last year, the 75,000-hectare total planting area was expanded by 1,500 hectares, and this year we’ll see an increase of 3,000 hectares. We want to continue expanding next year, because Cognac producers are confident there will be enough demand to support it.

SND: In whiskies, Moët Hennessy has been expanding at Ardbeg and Glenmorangie. At Ardbeg, there’s an addition of two new stills, effectively doubling capacity. Glenmorangie is adding a wash still and a spirits still, as well as new mashing and fermentation facilities. Can we expect more new expressions and extensions from all this?

Schaus: We’ve also invested in our experimental distillery at Glenmorangie for new product development, and it’s absolutely exceptional. At Ardbeg, we’ve built up capacity and are making big thrusts on innovation.

And we’re investing in Woodinville Whiskey Co. in Washington state, where we’re in the first phase of expansion at the original distillery, which will always be the footprint. We’ve been growing Woodinville’s distribution very prudently, expanding from its home base in Washington into Oregon and Northern California.

SND: Glenmorangie has been so creative with its endless array of high-end releases. Could you do more in that vein with Hennessy?

Schaus: We have one of the greatest collections of old eaux-de-vie on earth, and there may well be opportunities to release some very special editions. We have our Chai du Fondateur in Cognac, with its stocks of old eaux-de-vie. That gives the blenders a degree of freedom to create and design new expressions, while staying within the rules of the Cognac appellation.

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