On Friday, Remy Cointreau will announce the results from its fiscal-2021. The numbers, to the end of March, have as their base a 1.6% sales decline from the nine months to the end of December.
Here’s a look at the news that is likely to have shaped Remy’s performance in its Q4 reporting period.
Rewinding a touch, in early December, group CEO Eric Vallat admitted to having Tequila in his sights. “We do have potential to grow our share,” Vallat told analysts, in reference to Cognac’s opportunity in the US spirits market. “Tequila is 12%, while we have only 6% or 7%. This highlights the potential gain.” Turning to where the opportunity lies for the Cognac category in the country – existing consumers trading up or new recruits – Vallat said: “We know for a fact it’s both. [For US Cognac consumers], they have less to spend on travel and they’re taking advantage of this to upgrade. This gives us the opportunity to educate on our products,” he added. “But also, we saw some people moving from other high-end spirits to Cognac.”
In 2020, Remy Cointreau had something to shout about amongst the gloom. The group’s historical over-reliance on its brands’ sales in China – Remy Martin, in particular – had long been a cause for concern. Fast forward to last year, however, and that over-reliance was a much quieter siren than previously.
Those US aspirations were dealt a blow in early January, however, as US trade authorities added Cognac to its list of alcoholic beverages to be hit with higher tariffs. The 25% levy on the category came into effect on 12 January, suggesting that, having been battered in China over recent years, trouble loves Remy Martin.
Hopes that 2021 will see a lessening of the tariff turmoil of the past two years in alcohol were dashed last week when US trade authorities announced new levies on European Union imports.
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The stage was set for the group’s final quarter by January’s announcement of a bumper fiscal third quarter. A leap in three-month sales of just over 25% helped Remy approach top-line parity for the first nine months of its fiscal year – Whisper it, but could the brand owner end up among those to emerge from a pandemic in growth?
January brought some good news, finally – at least, if you’re in Cognac. Remy Cointreau’s blockbuster third quarter put the company in an upbeat mood while, at the same time, showing the direction of travel for the wider Cognac category.
As the end of January approached, attention returned to Cognac in the US. thanks to the release of some figures from the country’s Distilled Spirits Council trade association. The category saw its US sales leap 21% to US$2.4bn in 2020, DISCUS noted, with volumes up by just under 18%. Forecasts from GlobalData, also included in our report, suggested the rate of growth for Cognac in the country shows little sign of abating over the next four years.
As the coronavirus rocked the alcohol industry last year, one question evaded a definitive answer; where will the pandemic hit hardest – in beer, wine or spirits? We now have an answer – of sorts.