The Wehring Interview - Remy Martin CEO Patrick Piana - Part I
Yesterday (9 July), Remy Cointreau announced that it has started discussions to buy the Bruichladdich Scotch whisky brand. As the French company looks to up its brown spirits offering, and on the first anniversary of the group's sale of its Champagne operations, we talk to Patrick Piana, the head of the company's Cognac division - and largest unit - Remy Martin.
In September, Patrick Piana will celebrate his third anniversary as head of Remy Cointreau's Cognac division. In that time, he's overseen a brand – Remy Martin, of course – that is going gangbusters in Asia, and he's felt the glare of the spotlight within the group grow stronger still.
Patrick Piana, CEO of Remy Martin at Remy Cointreau
Throughout Piana's tenure so far, each set of quarterly results from the French group has hailed the performance of Remy Martin in the east, so much so, that we at just-drinks grew concerned that we were using the same phrasing for each set of results and only changing the date. (We even tried to shake things up once, by mulling out loud what would happen to the company if the Chinese economy overheated – anything to spice it up!) There is no doubt, then, that Remy Martin plays a strong role in Remy Cointreau's performance.
That became all the more apparent when, almost exactly a year ago, the company sold its Champagne business to France's Societe Europeenne de Participations Industrielles (EPI) for around EUR412.2m (US$593.6m). The divestment of the Piper Heidsieck and Charles Heidsieck brands set the scene for Remy Cointreau to become a pure-play spirits producer, with the Remy Martin Cognac division accounting for around the vast bulk of the group's total performance.
“Cointreau is an important part of the group,” Piana concedes. “But, we also have opportunities with the likes of Mount Gay rum and Metaxa.”
Piana maintains that the Champagne sale has not upped the ante for the Cognac unit. “For me,” he says, “it doesn't change much. Our ambition in terms of performance remains the same. The Champagne brands remain in the portfolio for at least another two years. The sale has reduced the level of debt for the group, but beyond that, it hasn't changed much.
“But, I'm not the one making these decisions and I play the game with the cards that I have in my hands!”
While business continues as usual for Remy Martin, then, that means the effort is concentrated more in China than in other markets, right? After all, when the date of Chinese New Year moved earlier this year, the group's performance moved with it.
“Greater Asia – that's not only China - accounts for 50% of our (Remy Martin's) business,” says Piana. “The Americas accounts for 30% and Europe is 20%. So, yes, Asia is important. But, when you think of population growth around the world, it's good news that we're able to capture growth coming from emerging markets. It would be extremely sad if we couldn't.”
The skew towards Asia, however, is not a priority – or a concern – for Piana. “What is important is to be able to grow everywhere,” he says. “I would really worry if it was the only part of the world that we were getting growth from. That we're able to get sustainable growth in the Americas and in Western Europe, where the economy is not fantastic, then we're doing what is right. We're not over-reliant on one area. Also, as a group, we're more balanced, with Europe, Asia and The Americas each accounting for a third of the group's business.”
That said, would a shift in China's economic performance have an adverse reaction on Remy Martin? “When it comes to the economic perspective in Asia,” Piana counters, “who am I to tell you what's going to happen? Even the greatest economists can't plan what is going to happen. What's important for us is that we build our brands in a consistent manner, whether the economy is growing by 8% or 12%: It doesn't have to affect what we do.
“Obviously, I'd rather see the economy flourish than it perform a little less. But, if we do our job – we are a company that cares for the long-term, partly thanks to our stable shareholding – then we are doing what is right.”
For part two of this interview with Patrick Piana, in which we look at the other emerging markets, the US and Europe and the state of play within the overall Cognac category, click here.
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