Representing Campari’s biggest ever deal at $1.2bn, Courvoisier will enable a ‘significant step up in the US’ while also offering long-term potential in the Group’s strategic Asia-Pacific region.
The deal also plays into strengthening Italian-headquartered Campari’s portfolio of aged spirits, as well as supporting long-term premiumization ambitions.
Bob Kunze-Concewitz, Chief Executive Officer Campari Group, said: ‘We are very pleased to acquire a top four historical cognac house, Courvoisier with great latent equity and highly acclaimed expressions.
“The addition of Courvoisier cognac to our portfolio of global priorities is a rare and unique opportunity to expand our premium spirits portfolio and cognac offering.
"By leveraging our heavy cognac expertise at Board and Executive Team level, Campari Group has a fantastic opportunity to reinforce this brand’s credentials as a global icon of luxury, priming cognac to become Campari Group’s fourth major leg along with aperitifs, bourbon and tequila.”
US strengths
Campari Group entered the super premium French spirit category in 2016 with the acquisition of Grand Marnier; followed by the 2017 addition of Bisquit Dubouché, Trois Rivières rhums and distillery (in Martinique) in 2019, Champagne Lallier in 2020 and finally with Picon in 2022.
The acquisition will boost Campari’s distilled infrastructure, bottling and warehousing capacity in France, supporting operations of its other French brands.
The US is Courvoisier’s largest region, accounting for around 60% of net sales in FY2022.
Together, the UK and China account for 25% of net sales, while Global Travel Retail makes up just over 3%.
The Courvoisier business (which also includes the Salignac brand) posted net sales of $429m in 2022. Although sales are down in 2023 (net sales were $148m in the 10 months to October 31, representing a 33% decline to the corresponding 2022 period), this is attributed to restabilizing consumption in the US after peak post-covid sales and destocking at a wholesaler level, in line with the wider cognac industry.
Pending employee consultations, and other regulatory approvals, the transaction is expected to close in 2024, subject to customary closing conditions.
The big four
Campari Group champions the long-term potential of cognac, calling it 'one of the spirits industry’s most successful categories'.
The US, China and Travel Retail make up around 75% of total cognac sales worldwide. Almost 90% of worldwide sales come from the top four cognac suppliers: Hennessy (Diageo), Martell (Pernod Ricard), Remy Martin (Remy Cointreau) and Courvoisier.
These have differing skews into markets and liquid variants, with Courvoisier currently skewing strongly to core US with its VS offering.
"Despite current cyclical trends driven by consumption normalization, after pandemic-induced very strong growth, negative short-term trends have been further amplified by inflation-related price increases, which have led to destocking in core regions," says Campari as it announces the acquisition. "However, the long-term prospect of the category remains positive given structural premiumisation trends in the US, China and travel retail.
"Within the US, premiumization across the spirits industry and particularly within brown spirits remains, while supporting demographic and macro trends point to a recovery in 2024. Within China, international spirits are growing in popularity, particularly among the younger demographic, especially penetrating major tier one cities while premiumization remains."