MORE COGNAC SOLD = MORE COGNAC TO BE PRODUCED: 2018 WILL BE A GOOD HARVEST!

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Even with a dry summer the production of grapes in Cognac are looking goodaccording to the BNIC by 31st August 2018.
"Quasiment pas de pluie lors de la semaine passée. Dans l’ensemble le vignoble supporte bien cette sécheresse, toutefois certaines parcelles montrent des symptômes déjà marqués : jaunissement du feuillage, baies petites et molles. Les températures encore élevées en milieu de semaine provoquent de nouveaux dégâts d’échaudage. Elles se rafraîchissent nettement en fin de semaine."

Source: http://www.cognac.fr/cognac/_fr/4_pro/index.aspx?page=actualite&id=7501&src=flash

Hence, the Government and Cognac Society (BNIC) have agreed for a rather high rate of harvest per hectar of vineyard for the production of cognac, i.e., 14,64 hl AP /ha.
This decision follows a rather large demand for cognac in 2018 with + 8,2% in volume and 5,4% in value on 31st juillet 2018.
"Confirmant un besoin total de 914 700 hl AP, la filière Cognac a validé, au sein de la Section ODG du BNIC, un rendement annuel Cognac 2018 à hauteur de 14,64 hl AP /ha. Ce chiffre, issu du Business Plan Cognac a été entériné ce jour dans le cadre du Comité Régional INAO. Cette décision collective et unanime répond à la forte demande des marchés et à la croissance des expéditions ... et ... tient compte de la capacité du vignoble affecté par les aléas climatiques et des dernières estimations de récolte de la Station Viticole du BNIC."

Source: http://www.cognac.fr/cognac/_fr/4_pro/index.aspx?page=actualite&id=7505&src=flash

MORE AND MORE SPIRITS DISTILLERIES IN THE USA

Craft Pot Still Distillery

The number of craft distilleries in the USA is ten times larger in 10 years. This is showing a healthy growth.

Original Title: Number of US craft distilleries rises by 26%

Source: beveragedaily.com

July 18, 2018

In 2016 there were 1,315 active distillers, which rose to 1,589 in 2017, according to figures compiled by the American Craft Spirits Association (ACSA), Park Street Imports, and the IWSR.

A craft spirits producer is defined by the ACSA as one that has not removed from bond more than 750,000 proof gallons; markets itself as craft; is not openly controlled by a large supplier and has no proven violation of the ACSA Code of Ethics.

All about local?

The West boasts the largest number of distilleries (32.7% of total US craft distilleries), but the South - with classic spirits states like Texas, North Carolina and Kentucky - comes a close second (29.3%). The Midwest accounts for 19.1% and the Northeast 18.9%.

California is the state with the most distilleries: a total of 148, which makes up 9.3% of the nation's total. This is followed by New York, Washington, Texas and Colorado.

On average, more than half of a craft spirit producer's US sales come from within its home state (18% at the facility and 34% outside its premises).

"Nearly one-fifth of all sales take place at the production facility, underscoring the importance of tasting rooms and on-site retail to the bottom line,"? says ACSA in its 2017 annual report.

Meanwhile, employment in the craft spirits industry has grown nearly 50%: from 13,239 full time jobs in 2016 to 19,579 jobs in 2017.

The ACSA highlights 2017's 'most game-changing moment' as when Congress passed the Craft Beverage Modernization and Tax Reform Act (CMBTRA) on December 19 as part of the larger Tax Cuts and Jobs Act.

"The significance of the tax vote cannot be overstated, for it is the first time in modern history that the federal government has acted to lower the Federal Excise Tax (FET) on the nation's small craft distillers," ?explains the ACSA.

"The legislative action has helped level the playing field for spirits within the broader craft beverage space, putting distillers on par with breweries and wineries. Prior to the law's enactment, a craft spirits producer had paid 5.4 times more FET than a craft brewer and 16.4 times more FET than a small winery, for equal quantities of beverage alcohol.?

"While it certainly is a time to celebrate, our work is only just beginning. ACSA's priority now is to ensure that Congress votes to make the tax relief permanent."?

The American Craft Spirits Association is a registered non-profit trade group representing the U.S. craft spirits industry.

AMERICAN AND SOUTH AFRICAN BRANDIES BLENDED TOGETHER BY COPPER & KINGS

Copper & Kings American Brandy Co. has launched Geogr&phy Bi-Continental Brandewijn

Copper & Kings American Brandy Co. has launched Geogr&phy Bi-Continental Brandewijn ($50), a new limited release. The 54%-abv offering is a blend of copper pot-distilled American and South African brandies (51%/49% respectively) aged an extra two years in ex-Bourbon barrels.

The spirit is bottled without flavor additives or chill-filtering. Geogr&phy Bi-Continental Brandewijn is now available at the Copper & Kings distillery in Louisville, Kentucky and in select retail locations throughout the company’s distribution footprint.

Last January 2018, Constellation Brands took a minority share in Copper & Kings.

Source: The Spirits Business

GRAFFITI STYLE DESIGN OF PACKAGING FOR NEW LIMITED EDITION VS BY HENNESSY COGNAC

Hennessy VS Limited Edition VHILs

This 9th edition of Hennessey V.S Limited Edition is the latest in Hennessy’s ongoing series of collaborations with internationally renowned artists. This is the first edition that includes an eye catching gift box that also showcases the talent of the Portuguese Graffiti Artist know as VHILs.


Hennessy VS Limited Edition VHILs

THE ARTIST
Portuguese visual artist, Vhils, is renowned for developing the unique aesthetic of removing layers from walls and other surfaces to expose what lies beneath. Considered groundbreaking in urban and contemporary art scenes, Vhils’ innovative portraits are chiseled into city landscapes around the world.

Hennessy VS Limited Edition VHILs

Source: Hennessy.com

EXPECTED GROWTH OF SHARES FOR REMY COINTREAU

Remy Cointreau logo

Rémy Cointreau (RCO FP): Premium Growth but Premium Valuation

Source: Jefferies International Limited

Edward Mundy, ACA

June 11, 2018

Rating HOLD

Price Target $120.00 (from $105.00)

Price $122.90

Key Takeaway

We like Remy's category exposure (80% cognac) and see upside as the CEO rolls out her vision for the company as a super-premium business. Fundamentals in the Cognac Division remain strong which should support EBIT growth 12-13% in F19. While we like Remy, trading at 33.3x CY19E (vs staples 18.9x), the shares need upgrades to perform. Remain at HOLD.

Attractive category exposure... With 80% of the business cognac, rising further if other brown spirits Metaxa, St Remy, Mount Gay, Islay Spirits are included, Remy offers a highly attractive brown spirits portfolio that is well positioned to capitalise on the spirits premiumisation trend.

...with a vision as a super-premium business... Remy does not have the financial superpower to compete head-on with spirits majors. Instead, the business will borrow from the CEO's experience in luxury goods, relying more on digital and direct to consumer sales than traditional FMCG marketing.

Premiumisation strategy on-track - co is making good progress with the premiumisation model with 53% of the portfolio now over $50 a bottle vs 45% in F15. The move to 60%-65% over the next three to five years should be feasible given that 80% of sales are over $40. Given that it is unlikely that Cointreau can be sold for >$50 a bottle, the conversion of this 27% of the portfolio ($40-$50 a bottle) is likely to take place across cognac (1738), gin (Botanist), Mount Gay (xo) and higher variants of Metaxa.

Margin outlook - positive trends. Given the stronger than expected margin growth in F18, the company has raised its margin guidance to 240-300bps F18-20E. With 130bps captured in F18 (22.0%), this argues for between 50-85bps org margin expansion p.a. F19 and F20. Although the company is investing ahead of growth in A&P, margins should be driven by continued GM expansion given the company's premiumisation strategy.

What are the risks? Key risk for an investment in Remy is concentration risk in cognac & that consumers move away from cognac towards other brown spirits. However, we see an attractive outlook for the cognac industry with scarcity of inventory helping to drive a robust pricing environment.

What's changed? We increase F19 EPS c2% and our price target to $120 (from $105) to reflect the upgrade and the roll-forward of our DCF by one year.

86% OF REMY COINTREAU'S PROFITS COMES FROM COGNAC

Remy Cointreau's profits boosted by China's thirst for cognac

Source:

https://www.rte.ie/

7 Jun 2018

Remy Cointreau has reported higher-than-expected annual profits, helped by strong demand for its premium cognacs in China, and predicted more earnings growth this year.

The maker of Remy Martin cognac and Cointreau liqueur said its strategy of selling higher-priced spirits to boost profit margins was delivering strong results.

Remy has been focusing on selling spirits priced at $50 a bottle or more, as part of a strategy that has benefited from a rebound in Chinese demand.

Remy's strategy has differed from that of rival Pernod Ricard, which has launched less expensive brands in China.

The private consumption of drinks and spirits has been recovering in China, offsetting the impact from the country's anti-corruption crackdown over the past few years which had hit sales of premium brand drinks.

Remy Martin cognac, which makes 86% of group profits, achieved a margin of 26.9% of sales, representing an organic increase of 1.3 percentage points.

Remy Cointreau's stock market valuation is closer to that of many luxury good stocks, rather than food and drinks stocks.

RECORD SALES PRICE FOR A WINE BOTTLE

A bottle of Vin Jaune, meaning literally ‘yellow wine’ in French, has sold for a record price of over €100,000 to a Canadian buyer.

One of the oldest bottles of wine in the world was sold on Saturday, 26 May, at an auction in France, for €103,700 ($121,000).

The exceptional longevity of the yellow wine of Arbois comes from its particular mode of elaboration, which consists of raising the wines “under veil”; that is to say, with a form of oxidation which transcends perfumes and limits ageing.

The wines have been lovingly cared for by eight generations of heirs of Pierre Vercel (1694-1754), whose family is known to have made wine in Arbois since the 14th century and whose Grand Commander has maintained the tradition. He had remained discreet about the number of bottles he had carefully preserved, and their location.

Source: Vinexpo-Newsroom