SND: What’s the latest on Rémy Martin in the U.S.?

McLernon: We clearly have brand awareness and resonance in America, which has been one of our biggest markets for many years. But the real success story has been 1738, our intermediate expression, which has been one of the key drivers of growth. It resonates with consumers from outside of Cognac, as well as those trading up within the category. You see a high interaction with American whiskey and also with premium Tequila. Remember, Cognac is only half the size of Tequila in the U.S. as a category. We believe there is still plenty of room for growth. Recruitment of consumers into the category is key. 1738 has done a great job there and it’s only the start of what we’ll do. We’ve been investing strongly above the line, including our Team Up For Excellence campaign with Usher. We’ve also seen some high growth coming from XO, which has an opportunity to compete against single malts and other higher-end whiskies.

SND: Supply constraints have been an issue in Cognac. How is Rémy Martin situated?

McLernon: The growth that we’ve seen during the pandemic was very hard to predict. If you look at other categories, whether it’s Tequila or American whiskey, everybody’s had the same problem. But so far we’ve managed it well. The supply chain last year was quite heavily impacted by shipping delays for imports of all kinds. The year before, we had the threat of tariffs. There’s always going to be something. But our team has done a great job managing supply and demand, and we’re working with our wholesale partners on forecasting to try to minimize the risk of out-of-stocks.

SND: Cointreau has enjoyed strong momentum lately. What factors have been key to the brand’s growth?

McLernon: Cointreau is a great example of one of the brands in our portfolio that we believe could do much more. I arrived in this role three and a half years ago and we were very dependent on Rémy Martin, with one product driving most of our business. We have a portfolio of 14-plus brands, and clearly we want to make sure the whole portfolio is performing up to its potential, not only one or two products. What we realized with Cointreau was there was relatively low understanding or awareness of what the brand is and how you can use it. Our strategy over the last three years has been to educate and convince consumers about why Cointreau should be in your Margarita. It’s a continual effort. We’ve made good progress, but there is still significant upside for the brand in the future. We will continue to invest.

SND: The Botanist made a splash by advertising in the Super Bowl this year. What are your goals for that brand?

McLernon: The Botanist is one of the big growth opportunities for our business globally, and specifically in the U.S. We’ve been seeing high double-digit growth, outperforming the gin category. We’re making the brand more front-of-mind, building awareness, and also conveying that we are different from other gins, distilled on Islay at Bruichladdich. We’re excited for the major investment for the brand. We believe it will help achieve our ambition to double the scale of this brand over the next 12 to 18 months.

Rémy Cointreau—Leading Brands in the U.S. (thousands of 9-liter case depletions)
Brand	Type	2020	2021	Percent Change1
Rémy Martin	Cognac	1,483	1,423	-4.0%
Cointreau	Liqueur	345	418	21.2%
Mount Gay	Rum	144	139	-3.3%
St. Remy	Brandy	90	90	0.5%
The Botanist	Gin	48	63	31.8%
Metaxa	Brandy/Liqueur2	26	26	1.5%
Bruichladdich	Single Malt Scotch	13	16	18.4%
Total Leading Brands3		2,148	2,175	1.3%
1 Based on unrounded data. 2 Includes ouzo. 3 Addition of columns may not agree due to rounding. Source: IMPACT DATABANK © 2022