Entering the post epidemic period, R é my Cointreau group, the global liquor giant, is optimistic about the current recovery progress of its China business.
“In the middle of fiscal year 2020 / 21, we expect sales in China to return to pre epidemic high / low double-digit growth.” In a written reply, Mr. allatic, the chief executive officer of evara group, gave a written reply.
At present, in the Chinese market, this French enterprise operates famous foreign wine brands, such as Louis XIII, Remy Martin high-quality champagne cognac, Jundu orange wine, buheradi single malt whisky, etc. In the above reply, the new commander, who officially took office in December 2019, also detailed the performance of Remy Martin in the Chinese market during the epidemic period, as well as the next new product plan, etc.
Eric Vallat, CEO of Renmin Ma Jundu group (information photo)
Let’s get to know.
The channel is expected to replenish before the Mid Autumn Festival
Thanks to a better than expected performance in the US Non ready to drink channel (home drinking consumption) and China’s faster than expected economic recovery, the French wine company recently adjusted its performance expectations.
“At the end of April, we expect sales in the first quarter of this fiscal year (April June 2020) to decline by 50% to 55%, and now we expect to keep the decline from April to June at 45%.” Vallat told the agency that the group as a whole is recovering.
He said the decline in the Chinese market was expected to be smaller than the group’s overall decline, as home isolation in China ended earlier than the rest of the world. This reflects the gradual recovery of ready to drink channels (including bars, KTVs, nightclubs and restaurants) and the “clearance action” being carried out by dealers. Prior to this, due to the quarantine policy during the Spring Festival, Remy’s dealers have accumulated a large number of stocks.
“We have reason to believe that our dealers will start to cover their positions before the Mid Autumn Festival.” Vallat told the snack generation.
Meanwhile, Remy Martin expects the Chinese market to be one of the important drivers of a “significant rebound” in sales in the second half of the fiscal year (October 2020 to March 2021).
“While we expect sales to continue to decline in the second quarter (though more gently), we expect a significant rebound in sales in the second half of the fiscal year, led by the Chinese and US markets.” “We expect all of the group’s brands to benefit from this, and from the sales map, our cognac brand sales are expected to increase in China and the U.S. market,” Vallat said
He told the agency that in these two key markets, he expected its dealers to quickly end the current clearance and start the replenishment before the peak season. Under the leadership of the Chinese and American markets, it is hoped that Remy Martin’s sales “can meet the bottom rebound in the summer” and maintain this momentum until the second half of 2020.
Double digit growth in the previous fiscal year
Let’s take a look at the latest financial year performance of this foreign wine giant.
In June of this year, Renmin Ma released its latest financial year 2019 / 20 (April 2019 – March 2020), recording sales of 1.028 billion euros, down 9% year-on-year. Operating profit reached 215.1 million euro, a year-on-year decrease of 18.6%. Excluding the non recurring items, the net profit was 142.2 million euro, a year-on-year decrease of 26.9%.
However, according to Vallat in a written reply recently, Renmin Ma achieved double-digit growth in China in fiscal year 2019 / 20.
“Overall, the sales volume of the Chinese mainland in the fourth quarter of 2019/20 (January 2020 to March) showed a significant decline, with a two digit decline. Despite this, our sales are still growing at double-digit rates over the course of the fiscal year 2019 / 20. ” Vallat told the snack generation.
He said the strong sales of the group’s products in the Chinese market during the lunar new year had a good start (double-digit year-on-year growth), especially cognac in the quality champagne area of Remy Martin Club.
“However, it is obvious that from the end of January, the sales volume of various channels began to decline seriously (including both ready to drink and non ready to drink channels), with the exception of e-commerce.” He said that during the epidemic, e-commerce was one of its core sales channels. The sales on the platform showed “good elasticity” during the period of home isolation, which also reflected the development of home drinking culture in China to a certain extent.
Xiaoshidai noticed that in the stage of home isolation, the company organized a lot of creative online marketing activities to stimulate the consumption of e-commerce drinks. For example, Remy Martin brand and jowl, Shanghai tiktok Taxx and Tmall jointly organized a “cloud dash party”.
It is revealed that before the outbreak of the epidemic, e-commerce had accounted for about 20% of the group’s sales. “We believe that 20% of sales is not the end point.” Vallat said that according to his observation, in the post epidemic period, the culture of drinking at home, which was less popular in China, will develop into a new epidemic and trend.
“In addition, we are also slowly involved in the field of webcast and short video.” Meanwhile, the outbreak has greatly accelerated the development of new retail outlets, so Remy Martin has joined hands with partners to launch cocktail takeout, Vallat said.
Plans for new products this year
It can be seen that in the post epidemic period, the foreign wine giant has gradually begun to “return to the right track”.
When asked about the new product plan, Vallat replied that although there was a slight delay, it would still promote the new product launch. “Among them is the reappearance of our cashmere rum, which will be a focus of our group’s publicity in the fiscal year 2020 / 21. At present, we are negotiating with a champagne winery. If the successful acquisition of this high-end champagne brand, it will demonstrate the determination of Remy Martin Jundu group to return to the wine and champagne market. ” He said.
Meanwhile, in this fiscal year, Remy Martin will launch some new products in the Chinese market. “For example, Remy Martin tercet premium champagne cognac, buhradi star 4.5L, bosha OLC:01 2010 wait. These products show our confidence in the Chinese market. ” Vallat said.
In terms of marketing, he told xiaoshidai that although during the epidemic period, the group has strategically reduced its investment in marketing and communication (the expenditure on digital marketing has not decreased but increased), it can not miss the opportunity of economic rebound, so “it is expected to increase its investment in advertising in the second half of the fiscal year.”
Remy Martin premium champagne cognac and Remy Martin CLASSIC COCKTAILS
When talking about the opportunities of Remy Martin in the Chinese market, the new Marshal believed that in the long run, Remy Martin X. o premium champagne area cognac will be an “important entry point” for the group to further explore the Chinese market.
“After the successful development of Remy Martin Club premium champagne cognac (thanks to modern ready to drink channels and e-commerce channels), we believe that Remy Ma x.o premium Champagne district cognac has significant potential.” He said that China’s young consumer groups are becoming more and more mature, and they are eager to get the best products in various categories (luxury goods, cosmetics, spirits, etc.) through consumption, which is an opportunity for Remy Martin cognac.
According to him, at present, Remy Martin premium champagne area cognac occupies about 20% of China’s cognac market share.
As for other brands of Remy Martin, Vallat said that for buheradi, the importance of Asian market has gradually become clear, but its market share is still relatively small, “with great development potential”. Due to the good development of cocktail bars in the eastern and southern coastal areas of China and its high popularity among Chinese bartenders, Jundu orange wine “has a strong development momentum in China”.
“We have learned that foreign wine imports only account for 1% of the Chinese market in volume and 3% in value. Therefore, we believe that foreign wine still has a huge market growth space and development potential in the Chinese market. ” China’s demographic structure, the growing consumption level of residents, and the accumulation of foreign wine drinking experience are all “powerful levers” to promote Renmin Ma’s progress, Vallat told the snacks generation.