FY 18/19 A Banner Year for Remy
Remy Cointreau reported a strong end to its fiscal year with global organic sales up 7.8% for the year ended March 31 to about $1.36 billion, “a historic level for the group,” per a release.
Organic sales were up nearly 8% in the Americas thanks to boosted cognac sales across the region. In the US, the company’s volume and value growth for the fiscal year was “substantially above” the overall US spirits market, which grew about 2%-3% in volume and 4%-5% in value, said cfo Luca Marotta on this morning’s earnings call.
Luca added that “depletion[s] benefitted from robust trends for our cognac brands combined with accelerated trends, strong accelerated trends for Cointreau in H2” in the US.
BRAND PERFORMANCE. House of Remy reported volume depletion growth of 5.4% for the year. The company is “extremely pleased” with the results, especially given the “very significant” price increases on VSOP and XO over the year, according to Luca. In particular, the fourth quarter performance shows recovery from the second round of price increases taken in October.
Cointreau depletions also accelerated in H2 thanks to brand activations around the 70th anniversary of the margarita as well as “The Art of the Mix” campaign. Volume depletions were up 6.6% for the year in the US.
Mount Gay still reported weakness in the US as the company continues to reposition the brand including discontinuing the entry level expression.
Meanwhile, The Botanist gin and single malt whiskies were up double-digits for the year.
PRICING STRATEGY. When asked about pricing, Luca said they will “continue to follow our strategy,” which means taking more price in the future. Though he noted that it can be more difficult to take price in the US and Western Europe.
Remy will be more moderate with price increases on the Liqueurs & Spirits division brands (Cointreau, Metaxa, Mount Gay, St. Remy, The Botanist, single malt whiskies). The single malts are probably the only ones that won’t see price increases because they already “have the right price,” according to Luca.
Remy will “continue to increase prices all around the year and in a very constant way,” he said.
TOTAL WINE & MORE HEADS TO NY SUPREME COURT
At the end of last year, the New York State Liquor Authority unanimously denied a license request from Total Wine & More to open a 21,000-square-foot store in Hartsdale. Total Wine is appealing the decision, per the New York Post.
This is the second application that NYSLA has denied for Total Wine. In its decision, NYSLA said the amount of wine and spirits stores already in the area was a “major reason” for denying the license. In fact, the application was met with a lot of opposition as NYSLA received more than 100 letters against and just 30 for [see WSD 12-17-2018].
A hearing is scheduled in the New York Supreme Court on May 10.
Total Wine has a history of using legal and legislative tactics to get what they want. They’ve swayed legislation in their favor in eight of the 20 states they operate in [see WSD 02-27-2018]. The US Supreme Court is also set to release a decision soon regarding a dispute against Total Wine in Tennessee [see WSD 01-16-2019].
WX BRANDS SETTLES DISPUTE WITH MAINE WHOLESALER
Earlier this year, Maine wholesaler South Portland Wine Co. took WX Brands to court for allegedly violating the state’s franchise laws. The case has now been settled and dismissed with prejudice.
QUICK RECAP. In January, South Portland Wine Co. (SoPo) filed suit against WX Brands for allegedly attempting to “wrest” the Bread & Butter brand from them, and violating the state’s franchise laws [see WSD 02-06-2019].
In its complaint, the wholesaler claimed WX approached them asking if it would be willing to negotiate the release of Bread & Butter, but they refused. Then, as SoPo tells it, once they refused, WX imposed price increases, slowed shipments, and made “unfounded accusations” of poor service.
WX and SoPo reached a mutual agreement, settling the matter out of court earlier this month. As a result, the case has been dismissed with prejudice and without costs to either party, per court documents.
E&J GALLO UNVEILS FEMALE EMPOWERMENT CAMPAIGN. E&J Gallo has unveiled their newest campaign, called “Women Behind the Wine.” As part of the campaign, Gallo is offering a $100,000 grant to Women of the Vine & Spirits Foundation for candidates aspiring to be a master sommelier or college students studying enology, per a release. The campaign also includes in-store displays, trade events and print and social media to share the motivational stories of the women behind the wine encouraging others to follow in their footsteps.
EL TESORO TEQUILA REVAMPS PACKAGING. Beam Suntory’s El Tesoro de Don Felipe Tequila has introduced a new packaging for El Tesoro Paradiso Tequila. It features new bottle elements, label and premium gift box completing the brand’s overall portfolio redesign, per a release.
SCHEID FAMILY WINES HIRES MULTI-STATE SALES MANAGER. Scheid Family Wines has hired Joseph Fritz as multi-state sales manager. In his new role, he will handle the company’s wine sales and distributor management in Virginia, Washington D.C. and Maryland. Joseph Joins SFW from Hop and Wine Beverage where he served as sr. wine manager.
MICHTER’S APPOINTS NEW MASTER DISTILLER. Michter’s master distiller, Pamela Heilmann, has decided to retire from full time work starting May 1. To take her place, current distiller Dan McKee will be promoted to master distiller and Matt Bell will become distiller. The 2019 bottling of Michter’s 10 Year Single Barrel Kentucky Straight Bourbon will mark the final Michter’s release during Pamela’s tenure as master distiller.
GARRISON BROS. DISTILLERY LAUNCHES TWICE BARRELED BOURBON. Garrison Brothers Distillery has launched the second release of their twice-barreled bourbon, Balmorhea. It is aged three years in new American white oak barrels made from wood grown in the Ozarks. Then the liquid is transferred to a second new American white oak barrel made from trees grown in Minnesota and aged for another two years. It is then bottled at 115 proof with a very limited release at 6,000 bottles total. The bourbon is available for approximately $140 a 750 ml.
“It’s not what you look at that matters, it’s what you see.” – Henry David Thoreau
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