In the factory brand new, built by the architect Sandrolini in the middle of the vineyards of grande champagne, Bernard Arnault has pressed the button, and hundreds of bottles of Hennessy started to move gently on the chain rattling slightly.
Goal : 10 million bottle per year
This Wednesday, the 18th October, the president and CEO of the LVMH group had made the trip to Cognac (Charente), to start production of its new website, packaging and logistics, to Bridge Nine. A strategic investment of 100 million euros for this new production line, which will double the production of the brand, up to 240 000 bottles per day, or 20 000 boxes of twelve bottles. The bottling plant and shipping is added to that of The Vignerie, commissioning 25 years ago, and a third production line is expected to see the light of day in two years. Purpose : to produce ten million bottles per year, compared with 6 to 7 million currently. And the key, the 110 new jobs.
“When I come to Cognac, I always explain that it’s too small,” said Bernard Arnault, all smiles, who was at his side Bernard Peillon, president of Hennessy for the past ten years and Philippe Schaus, the new CEO of Moët-Hennessy, as well as his eldest son, Antoine Arnault. Recalling that ” 99% of the production is exported “, the secretary of State for external trade, Jean-Baptiste Lemoyne, was also of the party. “Today, our stocks are too low, a problem that we know well at LVMH,” admitted Bernard Arnault. The tool of Hennessy was no longer sufficient to respond to a request rampant in China, Japan, America and in some African countries such as Nigeria, Kenya or south Africa.
Dislodge Jack Daniels
And the growth has been felt, as evidenced by the results of the third quarter of 2017, presented on 9 October. If the group as a whole has grown by more than 10% over the period (12% for the first nine months), Hennessy, saw its organic growth to fall to just 4%, while the competition was taking speed. On the 17th of October, Rémy Martin has posted an organic growth of 13.2%, higher than forecast, after a leap of 19% in the first quarter. For Hennessy, the chokepoint focuses on the supply of bottles, ” VS “, the least expensive of the waters-of-life young people, very popular on the north american market. It is this market that the rise in power of the site of the new Bridge will better supply.
Already dominant on the market of cognac, with 50% of sales of the appellation, Hennessy is not yet full. If he is ruled out for the giant of the sector, to consider the purchase of another cognac house, for competitive reasons obvious, it is now the battle to another level. “In value, we are the second largest brand of premium spirits in the world, with the ambition to become number one,” says its president, Bernard Peillon. The challenge, therefore, is… to dislodge Jack Daniel’s to the first place of the charts!