How significant is LVMH to Cognac and Champagne?

or 2022, the wine and spirits division of the luxury goods group LVMH reported that it sold 94.3 million bottles of Cognac (Hennessy) and 70.9 million bottles of Champagne (Dom Pérignon, Krug, Mercier, Moët & Chandon, Ruinart and Veuve Clicquot). The figures equate to a decline of 8% for Cognac, which was negatively impacted by logistics disruptions in the USA and the pandemic in China, with 2022 sales also coming on the back of an outstanding year in 2021. For Champagne, however, the division posted an increase of 6% on 2021 due to growth in demand for Champagne in Europe and incorporation of the Armand de Brignac brand, to name a few.

The Moët Hennessy brands underperformed in Cognac – where the overall decline in sales was -4.8% - and over-performed in Champagne, where the average growth was +1.6%. Hennessy, which accounts for 44% of total Cognac sales, remains a powerhouse in the vineyards of Charente, although it has yet to return to its share of 49% in 2020, when the company accounted for almost one in two bottles of Cognac sold (see infographics). In Champagne, LVMH labels remain at a high level of almost 22% of total sales, on a par with 2019.

Above and beyond volumes, the main cause for satisfaction at LVMH is its price points, following new price increases. Although the luxury goods group does not reveal details for each company, it does state that its wines and spirits across-the-board generated revenue of 7.1 billion euros in 2022 (+20%). With a current operating profit of €2.15 billion, the operating margin is 30%, according to the company’s financial documents.