Louis Vuitton 2002 Annual Report Download - page 40

WITHIN LVMH, MOËT HENNESSY HOLDS THE WINES AND SPIRITS BRANDS,
SERVED BY A POWERFUL INTERNATIONAL DISTRIBUTION NETWORK.
THESE EMBLEMATIC BRANDS, AMBASSADORS FOR LUXURY, MARKET THEIR
EXCEPTIONAL PRODUCTS ALL OVER THE GLOBE, MAKING MOËT HENNESSY
THE WORLD LEADER IN PRESTIGIOUS WINES AND SPIRITS. MOËT HENNESSY
IS ALSO DEVELOPING HIGH-END SPARKLING AND STILL WINES FROM
THE MOST RENOWNED GRAPE-GROWING REGIONS.
FOLLOWING TWO YEARS
OF MODEST SALES, HOW
DO YOU EXPLAIN THE
MOËT HENNESSY
REBOUND IN 2002?
CHRISTOPHE NAVARRE:
Let’s talk first about
champagne. The distri-
butors needed two years
to draw down the exces-
sive inventories they had
built up for the millen-
nium celebra tion.
During this inventory
drawdown, our brands
continued to sell well,
however, and we projec-
ted a turnaround a s
soon the situation retur-
ned to norma l. This
rebound did occur, and
we saw a 14% increa se
in sales volume over
2001 on a like-for-like
basis. With respect to
cognac, Hennessy has
recorded steady growth
and gained market share
thanks to its very ag-
gressive sales campaign
in the United States a nd
emerging m arkets like
China , which are rea l
growth drivers.
These advances help
to offset the difficulties
we have seen in the
Japanese market in the
last few years.
WHAT ARE THE PRINCIPAL
ELEMENTS OF YOUR
STRATEGY?
C. N.: Our strategy is
focused on developing
our flagship bra nds a nd
our key markets. Our
goa l, as t he world leader
in prestigious wines and
spirits, is driven by our
many assets, which can
be summed up in the
word “qua lity” . These
assets include our
teams, our bra nds a nd,
of course, our adverti-
sing and promotional
efforts. In addit ion, we
have a policy of firm
prices, a key component
in our strategy to in-
crea se profitabilit y and
crea te value for our
brands and products.
The growth in our
operating margin, which
rose to 33% in 2002,
clearly illustra tes the
success of this strat egy.
WHAT ARE YOUR OBJEC-
TIVES IN DISTRIBUTION?
C. N.: Our networks
give us a n essential
competitive edge. We
continue to expand them
and make them m ore
efficient. In 2002, we
actively contributed to
the restruct uring of the
distribut ion industr y in
key US states following
the sale of the Seagram
operations. In Germa ny,
Switzerland, Asia and
Latin America, the Veuve
Clicquot networks joined
those of Moët Hennessy.
By continuing to optimize
our organization, we will
generate greater syner-
gies, we will be stronger
and even more respon-
sive t o reta ilers’ needs
and consumer demand
and, at the sa me time,
increa se sales of our
brands.
HOW DOES THE YEAR
2003 LOOK TO YOU?
C. N.: Against a still-
difficult economic back-
drop that dema nds ver y
rigorous mana gement,
we will continue t o focus
our resources on promo-
ting our star brands
and developing key
markets, without forget-
ting our future growth
drivers— Japan for
champagne, and China,
Korea, Taiwan and Russia
for cognac. The expan-
sion of our distribution
network will play a key
role. After rea ching
a new high in 2002,
our continued object ive
is to win market share
in value.
PASSIONATE ABOUT CREATIVITY WINES AND SPIRITS
OUR OBJECTIVE—TO STRENGTHEN
OUR LEADERSHIP IN HIGH-END WINES AND SPIRITS
STRATEGY AND OBJECTIVESS
Interview with Christophe Navarre, President of the Wines and Spirits business group
38 •39 ANNUAL REPORT 2002