SB Interviews… Patrick Piana

Balancing the contrasting demands of dynamic Asia and the mature West is a key task for Patrick Piana, CEO of Cognac house Remy Martin.

These are good times for Cognac. Exports broke through the €2bn barrier for the first time in 2011, buoyed by dynamic growth in the Far East, where a new generation of Chinese millionaires is turning its nose up at VS and only deigning to drink VSOP, XO and above.

If you’re one of the big four Cognac houses and you don’t make VS, that’s good news. Even better news when your luxury expression is Louis XIII, whose tactile flask and superlative liquid make it one of the most aspirational spirits in the world.

No wonder then that Piana exhibits an air of calm satisfaction, noting quietly at the outset of our conversation at London’s Corinthia Hotel that “we are in a good situation” – on the back of a 30% sales rise in the nine months to the end of 2011, boosted by strong advance shipments for the Chinese New Year.

Rémy’s position in the Cognac hierarchy is similarly comfortable: lagging behind category leader Hennessy, but vying with Martell for second place in volume terms, with an estimated global market share of 14%. In value terms, the figure rises to 18%, placing it third, but still well ahead of Courvoisier, with notable strength in the Americas and Asia.

So it comes as some surprise that we spend most of our time discussing not Shanghai and Beijing, but the ostensibly less interesting markets of Western Europe, underlining the fact that the company is currently enjoying growth on all continents.

“That’s something that’s extremely important to me,” Piana says. “The house of Rémy Martin was founded 288 years ago and one of the reasons we’re still here and independent is that we have always been able to work in most or all parts of the world.”

Defending Europe

So, for Piana, the recuperating US remains ripe for growth in VSOP, XO and Louis XIII, and he refuses to be deterred by the recent economic mayhem in the Eurozone. “We are defending our position in Western Europe in general.

“Growth continues to come from the three major parts of the world, and I don’t want the house to become ultra-dependent on one part. At the moment it’s a good balance, when you think of the weight of population and the wealth that’s generated. It’s not that different to the reality of where the economy is going.”

Rémy has a new weapon in its defence of Western Europe – a reworking of its flagship expression called VSOP Mature Cask Finish. The blend of eaux-de-vie and the ageing both remain the same, but the liquid is “finished” for a year in Limousin oak casks that are more than 20 years old.

The result, developed by cellar master Pierrette Trichet and her deputy, Baptiste Loiseau, offers a more rounded and fruitier Cognac which – the company hopes – will appeal to changing European palates. The traditional frosted bottle has gone in favour of clear glass, showing off the liquid’s rich colour.

Piana says the move has been prompted by changing tastes – “we have a sweeter level of acceptance than our parents; it’s the way we’ve been raised” – but Mature Cask Finish is also at least partly inspired by Coeur de Cognac, the company’s “more accessible” Cognac that was launched in 2007. “That was probably one of the first steps leading us to this,” Piana agrees. “The first step is small, the second is bigger. To us it seems natural.”

For now, Mature Cask Finish’s target markets are the UK, France, Germany, Italy, Spain, the Nordics and the Netherlands. “We’re taking a very rational approach to where we have to succeed, where it’s important to succeed,” says Piana. “From there, we’ll see. There are a lot of consumers to convert and consumers to educate. We have every intention to keep Western Europe as a strong area for our business. We have to be strong.”

Challenging tradition

The new launch also gives the company the freedom to explore proactively different ways of consuming Cognac, beyond the constraints of the digestif tradition – something that will be crucial to reinvigorating mature markets in Western Europe.

“That’s a big part of our conversation these days,” acknowledges Piana. “We have consumers who have one way to drink our Cognac, very often as an after-dinner drink. But when you think about the opportunities, there’s a moment when people drink it as an aperitif, there are countries where people drink it instead of wine or beer, where people drink it in nightclubs or as a nightcap, in shots… all these occasions exist. “The challenge for us, within our challenge to recruit the next generation of consumers, is how to add new occasions for Cognac consumption.”

In this, Piana is particularly encouraged by the revival of classic cocktails in the UK and elsewhere, such as the Sidecar, the Horse’s Neck and the Corpse Reviver. “If there is one market in Europe which is at the heart of the cocktail culture, it is London,” he says. “If we want to support more versatile usage of our products, we have to be in London to invest and try. What First Drinks [Rémy’s UK distributor] is doing here is extremely important.

“Refusing to accept being mixable is accepting to have a long-term decline. Not all cocktails can be made with Cognac, but when you think about great bartenders, they love creating things. And, when you have that approach in the US, in Asia, why not be more proactive and do it in Western Europe too?”

If this spirit of dynamism seems a little out of character for a centuries-old Cognac house, Piana is at pains to point out that innovation and risk-taking pervade Rémy Martin. “It’s part of who we are. It doesn’t mean walking away from a nice glass with two ice cubes and a moment of conversation. It’s not one against the other. It’s about adding, expanding, having a role in the culture… then letting the world have fun with it.”