An unwavering ambition: becoming the global leader in exceptional spirits
One of the things that characterise the spirits market is the sheer number of both international and local brands, in what is a highly competitive environment. With this in mind, Rémy Cointreau has been pursuing a value creation strategy for many years. The aim is to develop its high-end brands in the upmarket segment of the global market, which holds considerable growth and earnings potential.
Over the past 15 years, this has led the Group to sell brands or other assets that did not fit in with this value creation strategy and to take full control of our distribution channels
in key markets (exit from Maxxium in April 2009).
Since 2015, the Group has been accelerating its strategy of moving upmarket so as to set its brands apart and emphasise its uniqueness: ultimately, the Group wants to become the world leader in exceptional spirits.
A new step in our value strategy
Our four strategic levers
The transformation of the Rémy Cointreau group’s business model initiated in 2015 (accelerating the strategy to move its brand portfolio upmarket and implementing a culture centred on the end-customer) has clearly paid off. Between 2015 and 2019, the Group posted average annual organic sales growth of 7% and its current operating margin rose by 4.4 points.
In December 2019, the Group embarked on a new phase of its value creation strategy, which consists in optimising its portfolio strategy to build a more sustainable, profitable and responsible business model. The Group has registered like-for-like sales growth of 16.2% since 2019-2020 (pre-COVID).
Such a deep transformation takes time, which is why we have set targets for 2030. This timeframe is also consistent with the way in which the Group approaches and plans its raw material purchases for some of its brands, such as Rémy Martin XO.
1. Increasing the value per case
The “portfolio strategy” consists in setting goals for each Rémy Cointreau brand in order to maximise its value per case and gross margin. The priority for the most lucrative brands will therefore be to accelerate their growth (driven by greater investment), while targets will be set to improve the profitability of less lucrative brands (through a gradual refocusing on the most high-end quality grades).
By expanding its gross margin, the Group will have the capacity to boost its investment in priority brands, which will be beneficial on a number of levels by fuelling more sustainable and profitable growth.
2. Pursuing a customer-centric model
In the past five years, the Group has instilled a culture centred on the end-customer by forging direct and personalised relationships with our customers, through our people, the media and digital resources to enhance our brands’ appeal.
The Group is now keen to move on to the next step by making the transition to a genuine customer-centric business model. This should translate into a significant increase in direct sales, be it through digital channels, owned stores or the Group’s network of “Private Client Directors”. To do this, Rémy Cointreau must implement or consolidate tools that will enable to communicate with, educate, retain and sell directly to its customers.
3. Optimising portfolio management
The prospects for growth in the Liqueurs and Spirits portfolio remains considerable, as these brands have yet to realise their full potential in their existing markets, particularly in terms of retail penetration.
The Group has identified some brands as priorities to propel the profitable growth of its portfolio. The expected mix and scale effects should gradually see the division’s profitability improve, despite reinvestments in brand communication and education.
4. Managing growth responsibly
As the roadmap for the Group’s sustainable transformation, the “Sustainable Exception” plan sets out a series of objectives to be achieved by 2025, 2030 and 2050.
It is built around three pillars:
– preserving our terroir;
– acting for our people and our communities;
– committing through time.
An ambitious and responsible strategy for 2030
The Group has set 5 transformation targets for 2030:
– a new business model for the LOUIS XIII brand, with a significant ramp-up in direct sales, breaking with industry conventions;
– a greater proportion of “intermediate” quality grades (1738 Accord Royal, CLUB) and of XO quality grade at Rémy Martin;
– a greater contribution from the Liqueurs and Spirits division to total sales and a marked improvement in the division’s margins;
– superior pricing for all brands in their respective categories;
– the expansion of digital sales to 20% of total sales.
2024-2025 outlook
Despite the sharp fall in its 2023-2024 results, Rémy Cointreau continues to exceed milestones set for its ten-year strategic plan. 2024-25 will be a year of transition, with highlights including finalization of destocking in the Americas, and 2025-26 will mark a resumption of the trajectory and targets set for 2029-2030:
– high single-digit annual growth in sales on average and on an organic basis;
– a gradual organic improvement in current operating profit margin.
In a complex environment with limited visibility in its main markets, Rémy Cointreau anticipates a gradual recovery in sales over the course of 2024-2025, with the first half affected by:
– continued inventory adjustments in the Americas, given the still‑negative trend in depletions;
– a high basis of comparison in the APAC region (sales up +55% in H1 2023-2024 compared with H1 2019-2020);
– mixed consumption levels in the EMEA region.
Against this backdrop, Rémy Cointreau is determined to use tight cost controls and its value-driven strategy to protect its profitability, while continuing to make the investments needed for tomorrow’s growth.
In 2024-2025, the Group will build on:
– the resilience of its gross margin thanks to a measured, selective rise in prices amid moderate inflation;
– normalization of its marketing and communication/sales ratio, at a level much higher than in 2019-2020;
– tight control of overheads to offset most of the rise in costs resulting from the reversal of temporary savings achieved in 2023-2024.
Lastly, Group forecasts of the currency effects call for:
– a negative impact on sales between -€5 million and -€10 million;
– a favorable impact on current operating profit of between +€3 million and +€7 million.
2029-2030 targets confirmed
In the medium term, Rémy Cointreau is reasserting its ambition to become the world leader in exceptional spirits, with a growth outlook that is still attractive, particularly in a world of more responsible consumption.
For this, Rémy Cointreau intends to pursue its value strategy and the construction of a business model that will deliver both profitable and responsible growth.
Financial and non-financial targets
72%
gross margin
33%
current operating margin
100%
of direct agricultural partners to be trained in regenerative farming practices by 2030
-50%
in carbon emissions per bottle by 2030, "Net Zero" by 2050 (trajectory validated by the Science-Based Targets Initiative)