Demand for LVMH’s Champagne brands is slowing this year following a boom following the Covid-19 lockdowns, an LVMH executive said.
Philippe Schaus, CEO of Moët Hennessy, said in an interview that after consumers were trapped at home in 2021 and 2022, there was a “general sense of revenge.” The revenue of the beverage and wine division he is responsible for accounted for approximately 7.5% of parent company LVMH Moët Hennessy Louis Vuitton SE’s first-half revenue.
“The picture in 2023 will be a little more complicated because the impact of the coronavirus is fading away and all countries will see significant inflation,” Schaus said. “So we’re seeing we’re getting back to normal.”
Scouse pointed to a decline in domestic Champagne consumption. But other markets performed well.
“We are seeing unabated demand for high-end champagne this summer on the beaches and nightclubs of Mykonos in Greece and the Italian Riviera, as well as in top restaurants in Paris,” Scos said. The division’s brands include Dom Pérignon, whose 2004 Plénitude 2 vintage sells for €495 ($528) in France.
The drinks division’s organic sales fell 3% in the first half, hurt by a slowdown in cognac consumption in the United States.
LVMH’s wine and spirits unit has been making acquisitions recently, including an investment in Armand de Brignac, the pricey champagne brand it co-owns with rapper Jay-Z. Earlier this year, LVMH acquired a majority stake in rosé wine producer Château Minuty.
Scouse said LVMH did not plan to acquire more alcohol brands, describing its product portfolio as strong. But the executive expects more consolidation to come in the Champagne region.
“About 300 bottles of champagne houses So I would imagine there will definitely be consolidation because 300 is a lot,” he said. “It’s very fragmented. “
The Luxembourg-born executive spoke at the Château de Salins, located near the northern French town of Epernay and surrounded by vineyards owned by Moët & Chandon. The interviews took place during a period known as “harvest season.” harvest.
Scouse said there were enough. Rising temperatures are making output more erratic, but the industry has been resourceful over the past few centuries and has adapted to climate change, Scouse said. “Champagne will continue to evolve. But I guarantee you that in 100 years people will still be drinking Dom Pérignon and Moët & Chandon.”
LVMH is the largest producer of Champagne as it also owns the Krug, Ruinart, Veuve Clicquot and Mercier brands.
Industry trade group Comité Champagne said in July that it expected producers to ship 314 million bottles this year, down 3.7% from last year.