The message he has given in the last three days on the 1st…
The message he has distilled over the past three days to the company’s 1,600 wine-growing partners invited to the traditional annual meeting at Espace 3000 in Cognac. An appointment that Laurent Boillot used to review the current context, reaffirm his confidence in the House model and present “the new Hennessy deal”, a program that illustrates the strengthening of his collaboration with his winemakers with key new financial measures (see box).
Keep your cool to make the right decisions and protect the future.
Ukraine, China, USA, Hot Spots
“Remember the uncertainties and worries that weighed when it all stopped in March 2020 and continue to keep your composure to make the right decisions and protect the future.” This motto applied during the pandemic “where we have tightened our belts while maintaining purchases and prices”, he points out that Laurent Boillot does not intend to change it in the current context.
Given the Ukraine conflict “where it was primarily about protecting the teams, including in Russia”, Hennessy has suspended its exports to the latter since February to redistribute most of it to the European market. “In the end, we have no influence on saleshe says, on the other hand from the costs and the availability of raw materials.”
Faced with a new restriction in China “very hard, nothing more in the direction of Shanghai, whose port is closed”the course was set for Shenzhen to remedy this, “which limits the consequences, as we know that the southern province remains open, where we sell the most, but we remain vigilant”.
On the United States side, Hennessy has tossed between runaway inflation meant to be permanent and an energy crisis “ easy raised its prices to cope, but suffered from significant logistical problems with blocked West Coast ports. “This causes serious problems with delivery times, and if the goods are not there, they will be replaced with another.” In this case Tequila, in full development and less subject to the restrictions of access to this No. 1 market for the house, which today stands out as a formidable competitor to cognac. “ Hennessy is not hegemonic in the US, we have to consider that and stay in the action.”
Improved visibility, excellence and accountability
For Hennessy, the action means a confirmation of the declared ambitions for “Horizon 2030”, ie doubling the profitability of the brand. They are based on a triptych of visibility, excellence and responsibility, a model that will continue to strengthen the house.
The planned investments, mainly in capacity, around 100 million euros per year for ten years, “goes even beyond that bar”, announces Laurent Boillot. In terms of visibility, it bets in particular on the recent global partnership with the NBA, the main basketball league in the United States, through 2023, to attract new consumers. “A non-trivial sponsorship, with a million basketball fans around the world making them even a small fraction of Hennessy fans, we’ll be delighted.” a promised partnership “Long term extend”he confides.
Hennessy has a VS dominance yes, “but we have to develop the other qualities”. This is the “Excellence” component with the announcement of a strong promotion of VSOP and especially Paradis. The first will be “reinvent” and be the subject of a great deployment in the world, as well as the XO category, in the USA, in China, more widespread than today, also in Africa and France “where we want to double our volume within 10 to 15 years, we will take the necessary time”. for paradise “because we have to intervene at the top”the new functions will be presented shortly.
Finally, the Cognac Environmental Certification (CEC) for all its winemakers in 2025 remains more important than ever for the house, which maintains its desire to achieve a neutral carbon footprint in ten years. “By reducing our CO2 production by 50% and offsetting the remaining 50% through a comprehensive forest regeneration program, we have already committed to 50,000 ha worldwide ‘, details of a CEO targeting this new deal “Prosperity shared with our partners”.
A sustainable partnership bonus
In an increasingly tight environment, particularly around material supplies, Hennessy has placed five key actions at the heart of its “New Deal” to retain its suppliers and attract others as needed. “Measures we will not return to”says Laurent Boillot.
Thus, depending on the intensity of the partnership and the commitment to sustainable viticulture, a sustainable and evolving partnership bonus of up to €100 per hl of pure alcohol is launched (€50 for 50 to 75% of production sold to the house, €80 for 75 to less than 100%). Added to this is the proposal to buy all the eaux-de-vie at a fixed reference price, to which are added quality premiums, and to allow the new planting rights for the Bagnolet SICA. “VSwhich enable our partners to tap cash in particular”, notes Florent Morillon, Head of Institutional Affairs, who presented these financial measures.
For the other two, they are part of a wish “Closer proximity to our tasting committee. It will now be open once a month for our winegrowers on different topics and its seven members will also go to meetings in the fields », says Stéphane Baudribos, responsible for the development of wine relations. From June, Hennessy will also open its main sites to them, the new cooperage, the Vignerie bottling plant, the Pont-Neuf bottling and packaging plant in Salles-d’Angles, which will release 4 million bottles in 2021, and the Bagnolet cellars.