Cognac holds back Rémy Cointreau

Rémy Cointreau has expressed confidence in its ability to return to growth this year, despite reporting a 5.7% organic decline for its first quarter.

Once again, it was the French group’s flagship Rémy Martin Cognac brand that led this decline, as sales shrunk by 15.3%.

This was attributed to three reasons: an ongoing move to destock in the sluggish Asian market, the “still challenging” environment in Western Europe especially, and “a high comparative in the US”, which the company claimed “overshadowed the positive momentum of our superior qualities in this market.”

Despite the challenges faced by Rémy Martin, the rest of the group’s liqueurs and spirits portfolio put in a strong combined performance with 11% growth.

A particularly strong performance came from Islay whisky brand Bruichladdich, whose sales doubled for the first quarter. Having bought the distillery two years ago and doubled its production last year, the group confirmed: “The strategy implemented for the past two years at Bruichladdich is beginning to bear fruit.”

There was similarly positive news from Rémy’s distribution partner brands, which saw 9.1% growth. Although a contract in the US with Edrington came to an end in April 2014, the group retains distribution deals with Champagne houses Charles Heidsieck and Piper-Heidsieck, as well as certain spirits owned by William Grant and Russian Standard.

Highlighting “the sequential improvement” on its performance in the previous quarter, the company stated: “At the end of this first quarter, Rémy Cointreau confirms its objective of achieving organic growth in both sales and current operating profit in 2014/15.”

The group’s results for 2013/14, which it announced last month, saw net profits slump by 46.9%, accompanied by a sale decline of 13.5%.