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With Cognac on fire in the U.S. market, the category leaders aren’t the only brands contributing to the upswing. Among the rising smaller players is Camus, an upscale, family-owned brand that sells 450,000 cases worldwide but has had a limited U.S. presence. That’s now changing, according to president Cyril Camus, who tells SND’s Daniel Marsteller that increased investment, the cocktail craze and the trend toward luxury spirits has created a favorable environment for expansion.
SND: While Camus is well-known globally, it’s been less visible in the U.S. How are you addressing the market here?
Camus: We’ve had our ups and downs in the U.S., finding our footing, but things are now going well. We have a great team, including people on the ground in New York, New Jersey, Georgia, California and Florida, where we’re based. We’re seeing growth and now approaching 10,000 cases and $10 million in retail sales in the U.S. There’s a lot of activity on our VS Elegance ($30)—so much, in fact, that it’s changing our mix worldwide, though we’re still selling more XO Elegance ($160) than VS in terms of global volume. We’re a high-end brand, but finding our spot at the VS level is important. It means exposure, and rotation for the retailers. We’re also putting more focus on our Borderies expressions, VSOP ($55) and XO ($180). A few years back we expanded our vineyard holdings in the Borderies area and we’re now able to launch our VSOP Borderies as an ongoing SKU (it was previously very limited). Together with the XO, which already has a bit of a following, we see the Borderies VSOP as our focus product in the U.S., especially on-premise. It fits current trends perfectly.
SND: Are you advocating more cocktail consumption of Camus?
Camus: The cocktail trend is a huge asset for Cognac. Whereas there was a wave of growth in Cognac generated by the urban culture’s enthusiasm, a large part of the growth is now coming from mixology. In the years before Prohibition, around one-third of cocktail recipes were made with Cognac. Now Cognac is reclaiming place at the bar.
SND: What about the innovation piece for Camus?
Camus: We’re planning to launch an additional expression of our Elegance Extra ($400) next year, called Dark & Intense. When our Extra Cognac is ready for bottling, we empty the barrel and heat it over a fire so that some of the trapped liquid migrates out of the wood. It’s very dark, almost black. Once the wood is layered with it, we refill the barrel with Extra Cognac and let it sit for a few weeks. The resulting product—Dark & Intense—gains a lot in aromatic intensity. What we’re really doing is taking back some of the angels’ share.
The owners of Laurent-Perrier, one of the world’s biggest Champagne suppliers, are considering a stake sale, according to Bloomberg. Citing “people familiar with the matter,” the news outlet reports that the de Nonancourt family, which owns around 60% of Laurent-Perrier (and nearly 75% of its voting rights), has informally discussed strategic options—including a partial or full sale of its stake.
However, a spokesperson for Laurent-Perrier told Bloomberg that the de Nonancourts have no plans to “cede the company.”
Founded more than 200 years ago, Laurent-Perrier is the fourth-largest Champagne supplier, with yearly shipments of more than 1.1 million cases, according to Imapct Databank. More than half of that comes from the company’s flagship Laurent-Perrier brand, which ranked fifth worldwide at 625,000 cases in 2015. Laurent-Perrier is also a key supplier of private label Champagnes in Europe.
Exports account for roughly two-thirds of the company’s business on a value basis, but Laurent-Perrier is a relatively small player in the U.S. Champagne market. Its name brand ranks ninth, selling approximately 30,000 cases annually.
After an up-and-down performance over the past few years, Laurent Perrier’s shares currently hover around the €70 ($77) mark—roughly the same price they were five years ago. The company’s market capitalization is currently about €416 million ($456m).
•Constellation Brands has agreed to purchase Grupo Modelo’s Obregon Brewery from Anheuser-Busch InBev (ABI) for $600 million. The brewery, located on Mexico’s west coast in the state of Sonora, currently has annual production capacity of roughly 4 million hectoliters, but Constellation is planning an expansion expected to tack on at least 10 million additional hectoliters of capacity. The first 5 million hectoliters of that buildout are expected to be completed by the end of 2019. The Modelo portfolio, which Constellation markets in the U.S., is thriving. The Mexican range grew by 11.5% in the U.S. in 2015, according to Impact Databank, with Corona Extra, Modelo Especial, Corona Light, Negra Modelo and Modelo Chelada all enjoying significant gains.
•Anheuser-Busch InBev (ABI) has become even more of a global force via its recently-completed acquisition of SABMiller, but its struggles continue in the U.S. market. ABI saw U.S. sales to retailers decline 3.8% in the three months through September, marking its fiscal third quarter, compared with an industry-wide decrease of 2.6%. Michelob Ultra and ABI’s above-premium stable showed low single-digit growth during the period, contributing to net revenue per hectoliter growth of 2.3% and an EBITDA gain of 0.9%. But the ongoing struggles of the Bud Light franchise continued to weigh down overall volume, with the company noting a 0.3% decline in revenue for the quarter. Through the first nine months of its fiscal year, ABI’s U.S. volume fell 1.1% to 83 million hectoliters, while revenue grew 0.7% to $10.7 billion and EBITDA rose 2.6% to $4.3 billion. While ABI has acquired SABMiller, in the U.S. the SABMiller portfolio is part of MillerCoors.
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