Cognac Sales to China Drive Sales Increase in First Quarter at Rémy Cointreau
Rémy Cointreau (RC) announced its financial results today for its first quarter for the period of April-
June 2017. RC is the owner of Rémy Martin Cognacs, Cointreau, Metaxa, Mount Gay Rum, St. Rémy French brandy and Progressive Hebridean Distillers. Overall revenues at the spirits conglomerate were up 9.9% at €240.2. The sales growth was driven by a 20% increase in revenues from the House of Rémy Martin.
RC noted that their “first quarter momentum was underpinned by a remarkable performance by the House of Rémy Martin, which benefits from the broad appeal of its brands and its upmarket strategy. Rémy Martin is producer of Fine and Grand Champagne cognac and generally does not compete at the V.S. designation, choosing instead to utilize its eaux-de-vie for longer-aged cognacs like 1738 Accord Royal, its V.S.O.P. and XO Excellence cognacs. Rémy Martin also produces the ultra-upscale cognac, Louis XIII.
The exceptional performance of Rémy Martin Cognacs was due to an increased focus on higher-end Cognacs and marketing those Cognacs in Asia. Rémy Martin’s high-end strategy is paying off as sales and profits are increasing. Cognac sales in China in recent years had fallen off as the country cracked down on conspicuous consumption. Rémy Cointreau has noted, however, that the situation appears to be changing as its Chinese sales picked up sharply in the second half of last year and continues through mid 2017.
Marketing Initiative Drive Rémy Martin sales
RC noted that in fiscal 2017 Rémy Martin sales benefited from the introduction of a 500 crystal decanter limited edition Louis XIII Cognac that was hand signed by four generations of Louis XIII cellar masters. RC also introduced it holographic “rooted in exception” mixed reality experience in the United States during the quarter.
Rémy Cointreau confirmed its forward guidance of the rest of the year based on the strong first quarter performance and noted “the first quarter does not traditionally make a significant contribution to annual sales.” RC’s first quarter performance, however, appears to have broken that tradition.