Rémy Cointreau predicts slow sales recovery
French firm Rémy Cointreau is expecting to return to growth in the 2025/2026 financial year with a high single-digit increase.
In its results for the financial year to 31 March 2024, the French firm revealed that sales had declined by 19.2%.
The €1.19 billion (US$1.28bn) organic revenue total was a concerning drop from the €1.55bn (US$1.69bn) sales figure generated in 2022-2023.
The company mostly attributed this to a difficult environment in its two key markets, the Americas and China. In the US, inflation and destocking were blamed, while in China, a disappointing recovery from Covid was cited.
On the whole, 2024-2025 is seen as a ‘year of transition’ by the company and 2025-26 will mark a ‘resumption of the trajectory and targets set for 2029-30’.
Rémy Cointreau acknowledged that inventory adjustments in the Americas and mixed consumption levels in EMEA will affect its performance in the first half of its 2024/2025 financial year.
The company is forecasting a return to ‘high single-digit average annual sales growth’ for 2025/26 on an organic basis.
For 2029-30, Rémy Cointreau is targeting a gross margin of 72% and a current operating margin of 33%.
CEO Eric Vallat outlined a variety of strategies that the company is implementing to get back on track and ‘reignite’ growth.
For Cognac – which made up 32.9% of the company’s sales and saw a 29.2% decrease in 2023-24 – the company will be looking to turnaround volumes for VSOP, leverage e-commerce platforms and the on-trade, tap into the potential in Asia for its luxury Rémy Martin expressions, XO and Louis XIII, and invest in the on-going global campaign for Rémy Martin 1738 Accord Royal with singer Usher.
In addition, it will continue to innovate and ‘create new occasions’, such as with the recent rebrand of Remy Martin XO as a ‘party’ spirit and the sustainable repackage for Bruichladdich whisky.
With Tequila and cocktails on the up, it will also look to take advantage of these trends with Cointreau. For example, it launched a campaign with actor Aubrey Plaza last year to show the orange liqueur’s suitability in a Margarita. It will also look to build on the momentum for its smaller whisky brands, such as American single malt Westland.
Furthermore, Rémy Cointreau said it is still well-positioned in China once the market does make a full recovery, and it’s looking into potential opportunities in Europe, the Middle East, and Africa (EMEA) and the rest of Asia as well.
Long-term, Africa and India are in the company’s sights too. In South Africa and Nigeria it will aim to grow its market share in VSOP, and in India, progressively build its bottled-at-origin/imported spirits business.
Despite dwindling sales, Rémy Cointreau maintains that it is still on-track of reaching its 10-year-strategic plan.
The French firm is aiming to become ‘the global leader in exceptional spirits’.
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