Moët Hennessy might be best know for its premium bubbly brands, but the company is investing heavily in boosting its spirits portfolio.
The move is reaping big bottom-line rewards. Its brands, which includes Ardbeg, Belvedere, Glenmorangie and Hennessy, performed well in the first half of 2017, with revenues reaching up to €2.3 billion.
Leading the charge was Hennessy cognac, with revenues increasing from €39.4m in 2016 to €45.7m in 2017, and volumes up 16%.
The latest IWSR figures for the global spirits industry show sales were up 4.4% in 2016, with growth in major markets including the US (+3.8%), global travel retail (+6.1%) and China (+5.4%).
According to just-drinks: "When it comes to Western-style spirits volumes, the US is THE place to be, according to the IWSR. The country accounted for just over a third of volumes, but 80% of all volumes growth in 2016. In sales, big drivers were Cognac, which grew by 19%, and Irish whiskey, which was up 18.4%, though from a smaller base."
It also notes: "Two companies were ahead of their rivals in terms of Western-style spirits growth. William Grant added 10% in sales and 5% in volumes while LVMH [parent company of Moët Hennessy] was up 13% for both in 2016."
Champagne sales, on the other hand, fell by 2% globally in 2016.
Moet meets tequila
Tequila is one of the world's most dynamic and fast-growing spirits categories and Moët Hennessy has spent the past two and a half years developing its first-ever tequila - Volcan De Mi Tierra - which has started making appearances in select bars and restaurants across Los Angeles, New York, Chicago, Miami and Texas.
The name translates to “Land of the Volcano”, as it is produced at the Volcan distillery in the Mexican Lowlands, at the base of the Tequila Volcano.
Rather than buying an existing brand, Moët Hennessy entered into agreement with Mexico’s Gallardo family to produce a unique blue agave tequila.
Sid Lee, which had an existing relationship with Moët Hennessy via its work on the Dom Perignon Champagne brand, has now been tasked by Moët Hennessy with building and marketing the new tequila.
Lukas Derksen, managing partner of Sid Lee New York told Media Post: “We look forward to contributing in making Volcan the most iconic tequila in the world.”
President and CEO of Volcan Trent Fraser added: “Volcan De Mi Tierra Tequila is a spirit built for the modern age. We’ve created an entirely new brand that allows individuals to rediscover, appreciate and love tequila in a unique and authentic way.”
Investing in American whiskey
In July, Moët Hennessy also invested in another booming spirits sector - American whiskey - buying Woodinville Whiskey Company (WWC).
WWC was founded in 2010 and is Washington State’s largest craft distillery and produces a range of whiskeys including Woodinville Straight Bourbon Whiskey, and Woodinville Straight Rye Whiskey.
Christophe Navarre, President and CEO of Moët Hennessy, said he was “convinced that Woodinville fits very well within the Moët Hennessy portfolio”.
“[Owners] Orlin and Brett have done a great job to establish Woodinville Whiskey as an iconic brand in Washington state with significant potential for expanded distribution through our US and international networks,” he said.
“While we are no strangers to whiskey, with our Glenmorangie and Ardbeg single malts, we have much to learn from Orlin and Brett about American distilling and look forward to this important new partnership.”
The future for spirits
ISWR magazine editor Alexander Smith recently told the Financial Times: "There is a clear and sustained trend of consumers drinking better — not more. This is supported in the IWSR data with the growth of global spirits, particularly whisky, gin and tequila.”
Christophe Navarre, agrees: “The golden rule in Moet Hennessy is quality, quality, quality. Because when you have quality, you have image.”
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