Campari Buys Courvoisier from Beam Suntory for $1.2 Billion

Italy’s Campari (CPRI.MI) on Thursday agreed to buy historic French cognac house Courvoisier from Beam Suntory for $1.2 billion, marking a big push into brandy with Campari’s biggest acquisition on record.

The purchase of a top four cognac brandy is the crowning achievement for Chief Executive Bob Kunze-Concewitz, who is due to leave next year after steering Campari through a long list of deals, including the purchase of Grand Marnier for 490 million euros in 2016.

“Christmas came early for Campari this year,” Kunze-Concewitz told analysts.

The deal will strengthen Campari’s presence in the United States, which accounts for 55% of Courvoisier’s sales, and offers transformational potential in the Asia Pacific region – also a large cognac market, led by China.

The deal is expected to boost Campari’s net sales by around 9%, Kunze-Concewitz told analysts, adding that it was also a rare opportunity to expand the company’s premium spirits portfolio and its production and bottling capacity in France.
“Clearly this is a brand which fits into our playbook, and we expect to relaunch and grow it substantially as we’ve done with some of the other brands,” Kunze-Concewitz said. “With our marketing model we can get this brand to perform at a really different pace.”

Sales at Courvoisier, founded in 1828, declined 33% in the 10 months to Oct. 31 versus a year earlier, Campari said. It said the reasons were slowing U.S. sales after post-COVID peaks and the process of de-stocking by wholesalers that had filled their warehouses excessively.

The deal, expected to close in 2024, envisages an additional earn-out of up to $120 million, to be payable in 2029, Campari said in a statement, adding that it would fund the acquisition via a mix of debt, cash and equity or equity-like instruments.
It has secured from a group of banks a fully committed 1.2-billion-euro bridge loan with a duration of up to 24 months and will monitor markets for possible issuance.

Source: Reuters

Cognac Sales Up 31% In 2021

Cognac’s biggest market, the US, saw the liquid’s sales climb by 11.1% in 2021 Cognac sales saw a 31% rise in value last year, with volumes of the spirit increasing by 16.2% to 223.2 million bottles, the BNIC has revealed.

Christophe Veral, president of the BNIC, noted that demand for Cognac “has never been greater in our markets than this year.” He said despite weather uncertainties, last year’s harvest allowed a “continuation” of growth.

Despite the health and geopolitical uncertainties, this growth reflected recovery for Cognac, as well as new consumption habits, the BNIC said in a statement.

Cognac exports to the US, the largest market for the category, climbed by 11.1% with 115 million bottles shipped in last year.

Cognac’s second biggest market, China, saw a 55.8% boost in sales with 34m bottles shipped.

Meanwhile, sales in Europe jumped by 8.1% to reach 37.1m bottles in 2021. Within this region, France, which is the fifth largest market for Cognac, saw a 23.4% rise in sales as 6.1m bottles were sold.

In a statement released on Monday 17 January, the BNIC commented that with the development of mixology, Cognac is attracting new consumers who are searching for quality products.

The report also cited South Africa and Nigeria as new markets.

The BNIC also said that the outlook for the category was ‘positive’ for the coming months in all regions.

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2020 Cognac Trend Predictions

Cognac continues to evolve globally given the interest in craft cocktails, particularly in pre-prohibition cocktails. With the United States being the first cognac market (102.4 million cognac bottles imported in 2019) it has diversified the many ways cognac can be consumed, from sipping it neat to using it as the base for trendy and originating cocktails. A recent study by Beverage Dynamics points to millennials spending up for premium spirits and cocktails. In the past 12 months, spirits priced $25 and up have increased in sales by 13.2%.

With millennials favoring the full imbibing experience—with an emphasis on ingredients — bartenders and stirrers are shifting with the trends.

COGNAC EDUCATORS FROM AROUND THE COUNTRY SHARED TRENDS THEY CURRENTLY SEE AND PREDICT FOR 2020

LESS DRINKING, HIGHER QUALITY

Dan Nicolaescu, Beverage Director of Brandy Library and Copper and Oak (New York, NY)

It is my experience that, generally speaking, people are drinking less but of higher quality. I see interest in trying cognac growing steadily, especially towards neat pours. It seems that preferences steer toward cognacs with a lighter wood influence but fairly well developed, in the 10-25 years range.

As far as cocktails go, I can envision bartenders focusing on quality by using small quantities of high-quality old cognac as an accent in a drink. It can provide unique flavors to the final product and is also more financially sensible.

MODERN MIXOLOGY SIMPLIFIED

Miguel F. Lancha, ThinkGoodGroup Cocktail Director (Washington, DC)

One trend that I have seen working with cognac is younger bartenders are showing an interest in wanting to learn about it, whether it’s at a bar training session or an industry seminar.

The interest in classic cocktails has been around for a while now, but many bartenders are going back to being more flexible and creative with cocktails. I see an opportunity for guests to be more exposed to cognac by trying drinks that combine it with cool techniques. Bartenders are continuing to modify the textures and structures of drink components by clarifying, carbonating, making a slushy, etc. They’re doing it in a way that’s not in your face or over the top, which is intriguing guests and exposing them up to Cognac in cocktails.

PRESENTATION WITH LEVITY

Kellie Thorn, Hugh Acheson Restaurants Beverage Director (Atlanta, GA)

While we are still having a hard time getting guests to order cognac on its own the way they do whiskey, we are seeing a lot of cognac cocktails sell.

I think that the key to reaching a younger audience is presenting the spirit and category with some levity. I obviously love the heritage and tradition behind these spirits, but we should approach it with a little irreverence.

Split your pour of cognac neat with some amaro, think of more tropical applications, add it to your spritz build, and in general make cognac feel like something that doesn’t have to have a lot of pomp and circumstance around it to enjoy it.

LOWER-ABV COCKTAILS

Joseph Erhmann of Elixir, Elixir to Go and Cocktail Ambassadors (San Francisco, CA)

There is an opportunity for cognac to take advantage of its great flavor intensity by mixing shorter pours (.5-1 ounce) with light mixers, like the multitude of uniquely flavored tonics to make low- ABV drinks. I particularly like a VSOP with Fever-Tree Aromatic Tonic and expressed lemon oil or a young, fruity VS with a dry grapefruit soda like Q Grapefruit.

https://www.cognac.fr/

 

 

Cognac Reports Record Export Growth

For the fourth consecutive year, exports of Cognac have increased, reaching record numbers in both volume and value.

With nearly 98% of total production exported, the Cognac appellation continued to grow its export markets in 2018, with growth of more than 3% in volume and 2% in value. 204.2 million bottles of cognac were shipped in 2018 – resulting in 3.2 billion euros (roughly 3.6 billion dollars) in revenue.


Dynamic Growth in All Major Markets

Cognac exports to the NAFTA Zone (represents 44.4% of exports) continue to make progress, with 90.6 million bottles shipped in 2018 for an increase of 5.2% in volume and 0.7% in value. The United States continues to be Cognac’s largest market with 87.4 million bottles shipped in 2018.

The East Asian market continues to grow, with 60.1 million bottles (an increase of 5.6% in volume and 3.7% in value). The exports to China continue to drive growth in the zone despite a slight decrease during the second semester.

Continental Europe exports have declined (-5.3% in volume and – 2.2% in value), for a total of nearly 39.4 million bottles shipped. This decline can be attributed to the difficult economic and political times in some of its markets.

Continued Potential for Development in the Rest of the World
Increased exports also continue in other areas with high potential for Cognac in countries such as South Africa, Vietnam, and the Caribbean. Exports to these markets rose by 10.4% in volume and 7.1% in value. Additionally, these new areas of opportunity represent more than 6.9% of total exports, or nearly 14.1 million bottles.

Exports Increase for V.S., V.S.O.P and Older Categories
The export of V.S. (50% of total volume), and V.S.O.P. (almost 40% of total volume) continue to grow in volume and are up by 2.6 and 3.5% respectively. Value for both remained stable (only down by 0.3%).
Representing 11.5% of total volume, the older categories witnessed a growth of 7.5% in volume and 6.3% in value.

The 2018 Harvest Supports Positive Export Figures
With a total volume yield of 126.8 hl/ha (compared to 88.95 hl/ha for the previous harvest) or a yield of pure alcohol of 13.06 hl AP/ha, the production in barrels will be between 970,000 and 980,000 hl AP.

This level of production would be greater than the region’s original business objectives which had been estimated at 902,000 hl AP put in barrel this year, a figure that many trade professionals feared would be too low to meet the demand.

The growth of shipments during the year confirms the forecasts announced by the BNIC’s (Bureau National Interprofessionnel du Cognac) business plan. BNIC President Patrick Raguenaud states, “Cognac professionals remain confident in the future prospects and are ambitiously planning to ensure the demands of export markets are always met.”

Source: BNIC

LOUIS XIII Cognac Integrates NFC Technology into its “Smart Decanter”

Launching February 2019, LOUIS XIII will step into the future by integrating NFC technology into its Smart Decanter to provide clients a seamless access to an exclusive world of privileges. Each decanter will directly connect clients to the LOUIS XIII Society, a private club where members can enjoy exclusive content, unique experiences and personalized services through their smartphones.

After removing the seal, clients can tap and scan their NFC-enabled smartphones on the cork stopper to access the LOUIS XIII Society landing page to create or log into their account. The decanter number will then be automatically registered.

With this NFC chip, LOUIS XIII clients will get facilitated access to all the advantages of the LOUIS XIII Society. This private club offers bespoke services such as customized decanter engraving, pre-releases of limited editions, contact with a LOUIS XIII Personal Advisor for private tastings and ultimate experiences, and an invitation to network with LOUIS XIII Cognac connoisseurs registered all over the world. In addition, the LOUIS XIII Smart Decanter will bring added services to clients allowing them to customize gifting messages that will appear when recipients scan their decanter.

“Every LOUIS XIII decanter will feature this smart solution worldwide. At LOUIS XIII, we place clients at the very heart of everything we do, striving to offer them always the best experiences,” said Ludovic du Plessis, LOUIS XIII Global Executive Director. “This innovation will be launched globally starting February 2019 and will be deployed all over the world the following months.”

NFC TECHNOLOGY
NFC enables simple, rapid, intuitive and secure communication between two electronic objects. A mature and robust technology which has been growing in the past 20 years being used mainly by bank cards, biometric passports and travel tickets – until now. Today, with the introduction of contactless payment, connected wearables and the Internet of Things, NFC technology is reinventing the way we experience life.

LOUIS XIII Society is a private members club for owners of LOUIS XIII Cognac decanters. http://www.louisxiii-society.com