AN INTERVIEW WITH THE CHIEF EXECUTIVE OFFICER

VALÉRIE CHAPOULAUD-FLOQUET

“It was the year when all energies were released”

In the financial year 2018/2019, Rémy Cointreau's Group Brands recorded growth of 9.8%.

As Chief Executive Officer, how do you perceive

Time, the third pillar of the Group’s manifesto? In our profession, the relationship with time is an unusual one. Although we operate in markets requiring much agility, we must be very patient when it comes to our cellars, as we sell mainly spirits that need to age. So, we must distinguish between long cycles upstream and short cycles downstream. Upstream, we are exercising one of the last professions where time is incompressible. At the House of Rémy Martin, for example, the eaux-de-vie take at least 5 years, and sometimes more than 100 years to age. It’s unique in the world... Downstream, on the other hand, we need to handle the rapid pace of the markets: we must react quickly, adapt to new requirements, changing legislations, and developing distribution channels. Resolving this tension between long and short cycles is a daily challenge that makes our business so exciting. It also fascinates our clients, who are used to the immediacy of the Internet, when they visit our cellars in Cognac or Islay.

Long cycles also have an environmental dimension...

For decades, the Group has been a pioneer in the CSR approach, especially in the Cognac region. In 2012, the Rémy Martin Domaines were the first of the AOC to obtain HVE certification (High Environmental Value level 3). In early April for the second year, we awarded 88 trophies to our HVE-certified winegrower partners of the Alliance Fine Champagne Cooperative.

Overall, 42% of the land cultivated by our winegrower partners is HVE-certified. Moreover, our target for the Group is to achieve 100% responsible and sustainable agriculture by 2024. In so doing, we hope to perpetuate the quality of our spirits in the long term. We can see that our values of Time and Terroirs are closely linked. With that in mind, we are also committed to creating a terroir for each of our brands. We have purchased land in Barbados, Samos and even the French Alps, and we are in the process of purchasing new land.

In terms of short cycles, would you say 2018/2019 is quite a good example?

Most definitely! We have broken our sales and profitability records. We are growing on the verge of double digits, with organic growth of 9.8% for Group Brands implying a further acceleration versus last year (9.2%). For all teams, these results reward five years of implementing the strategy to move upmarket. We have established trust. If I had to describe the past year, I would say it was the year when all energies were released. On the one hand, the repositioning of our brands has paid off. That of Rémy Martin and Louis XIII over the last three years, and more recently Cointreau, whose new brand platform sent sales skywards, in particular in the United States. I could also mention the “#BeTheBotanist” campaign, which gives even greater visibility to our exceptional gin, and the new communication of St-Rémy, which confirms its leadership in Canada.

Has the distribution network also changed?

Indeed, the quality of our spirits and the strategy to move upmarket require a high level of expertise regarding the market and clients. That is the reason for our demanding standards with respect to our distribution partners, and the recent changes that have occurred. When the size of our portfolio allows it, we would naturally rather set up our own distribution subsidiary, as in Malaysia at the end of 2017. There is no cause for regret: it was a tremendous success from the first financial year! Our Travel Retail business has also seen much development, with “retailtainment” features in all the world’s largest airports. Lastly, for Louis XIII, we are seeking the most direct relationship possible: with the end client in our three stores and pop-up stores; with palaces and leading restaurants, to ensure the Louis XIII ritual will be respected and that their clients will enjoy a unique experience.

Digital technology is also central to the strategy...

We have developed the client relationship through our digital brand platforms. As such, most of our advertising investments will now be rolled out online, allowing us greater proximity to our clients. We have also developed e-retail in partnership with quality e-retail websites, in China and the United Kingdom in particular. As for e-commerce, it has become a speciality of our Scottish distillery with exclusive sales and limited editions. Last but not least, the Louis XIII Smart Decanter is a connected carafe that allows purchasers to chat with the House, enhancing their tasting experience. A first in the world of spirits!

What inspires your confidence in 2019/2020 and the years ahead?

The foundations are now solid, the strategy is shared by all teams, and the results are there for all to see: the planets are perfectly aligned to tackle the new financial year with strong ambitions. And we have a great deal of projects!