LVMH’s 2022 annual report released: wine revenue hits record! Distributors: Hennessy has a lot of channels

Moët Hennessy-Louis Vuitton Group (Louis Vuitton Moët Hennessy, referred to as LVMH) recently released its annual report, in which the wine and spirits business will achieve revenue of 7.099 billion euros and profit of 2.155 billion euros in 2022, a year-on-year increase of 19% and 16%, but there is still a gap compared with other business segments of the group.
In particular, Hennessy will offset the impact of the epidemic by raising prices in 2022, but in fact, due to the backlog of a large number of products in the channel, domestic distributors are under considerable inventory pressure.

LVMH describes wine business: “Record level of revenue and earnings”
Data show that LVMH’s wine and spirits business will achieve revenue of 7.099 billion euros in 2022, a year-on-year increase of 19%; profit of 2.155 billion euros, a year-on-year increase of 16%. describe.

Its annual report said Champagne sales rose 6% as continued demand led to increasing supply pressure, with particularly strong momentum in Europe, Japan and emerging markets, especially in the “high energy” channel and gastronomical segments; Hennessy Cognac gained Thanks to its value creation strategy, the dynamic policy of price increases offset the impact of the epidemic in China, while the United States was affected by logistical disruptions at the beginning of the year; The garden has strengthened its global portfolio of premium wines.

Although there is also a good growth performance, the wine and spirits business accounts for less than 10% of the total revenue of the LVMH Group, ranking last among all sectors. The year-on-year growth rate is similar to that of “fashion and leather goods” (25%) and selective There is a clear gap in retail (26%), slightly higher than perfume and cosmetics (17%), watches and jewelry (18%).
In terms of profit, the wine and spirits business accounts for about 10% of the total profit of the LVMH Group, second only to the 15.709 billion euros of “fashion and leather goods”, and the year-on-year increase is only higher than that of “perfume and cosmetics” (-3%).
It can be seen that the year-on-year growth rate of revenue and profit of the wine and spirits business has reached the average level of the LVMH Group, accounting for only about 10%.

The annual report mentioned that Hennessy’s sales in 2022 will drop slightly year-on-year because “the comparison base between 2020 and 2021 is extremely high.” However, according to more than one domestic channel distributor, according to its statistics, the sales of almost all Hennessy products in 2022 will decline compared with 2021, especially the high-end products will decline even more due to the impact of the epidemic.

In addition, “the dynamic policy of Hennessy’s cognac price increase offsets the impact of the epidemic situation” – indeed, Hennessy has several price increases in 2022, among which “VSOP packaging redesign and new marketing activities” are also mentioned in the annual report One of the highlights. However, according to WBO Spirits Business Observation, due to the backlog of a large number of old packaging products in the channel, the old packaging products are still sold for a long time. After the inventory of these products is exhausted, After the price increase, the new packaging products are likely to stabilize the price.

“Champagne sales have increased by 6%” – According to an industry insider, the domestic market for champagne will be in short supply in 2022, and the general increase will be more than 20%. Up to now 1400 yuan/bottle. As for the wines under LVMH, the industry insider admitted that the performance of most of the other brands except Cloudy Bay in the domestic market is lackluster.

Although LVMH is confident that it will consolidate its global leadership in the luxury sector in 2023, there is still a long way to go in at least the wine and spirits business sector.


Post time: Jan-29-2023