Louis Vuitton 2002 Annual Report Download - page 48

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PASSIONATE ABOUT CREATIVITY WINES AND SPIRITS
The vineyard from the Cognac region, with
around 75,000 hectares under cultivation, is still
too large to both provide cognac yields and suffi-
cient revenue per hectare for the grape growers.
The restructuring of the Charente vineyard is
proceeding very slowly, and the French govern-
ment, the region and the cognac industry will
have to take structural stimulative measures to
reduce the area of the Cognac region’s vineyards
to a balanced level.
HENNESSY
THE LEADER IN COGNAC
GAINS M ARKET SHARE
IN THE PREM IUM SEGM ENT
In a spirits market that was generally stable
in 2002, the premium segment continued to enjoy
strong growth. Hennessy gained market share
in this segment thanks to the extremely high
quality of its products and the basic values that
distinguish its brand and form the cornerstone
of its success.
With another 6% growth in sales volume,
Hennessy consolidated its position as the world’s
undisputed leader. Against a difficult economic
backdrop, increased investments in advertising
and promotion, among other factors, contributed
to this performance.
The commercial success scored in the United
States, Asia, and in Europe, combined with a
strong performance in production and operations,
again improved Hennessy’s operating profit
and return on investment.
HENNESSY FINE DE COGNAC
- A SUCCESSFUL LAUNCH
AND A NEW HORIZON FOR GROWTH
Hennessy introduced its new Fine de Cognac, in
most European countries, backed by a major
advertising campaign in France and Germany late
in the year. Elegant and harmonious, this cognac
was created by the cellar master from eaux-de-vie
from the four finest vintages of the Cognac region
to meet the expectations of European consumers.
Its rapid delivery to distribution channels and its
initial success with consumers suggest excellent
results that will exceed our hopes. This major
initiative should be a strong growth driver in the
near future.
Nature was generous to Sauternes in 2002.
Following several weather events which genera-
ted fears of the worst, the grapes were literally
restored by a dry east wind. The growers’ skill
and the great care taken to sort the good grapes
at just the right moment did the rest. 2002 will at
least be a good year for Yquem. The wine tasting
after the final blending will tell if we can hope
for more.
COGNAC AND SPIRITS
The distillation of eaux-de-vie from the 2002 har-
vest rose slightly from the 2001 harvest and
is very close to current yields from the region
(at around 400,000 hectoliters of pure alcohol).
The region’s inventories of cognac are being
drawn down, but still do not structurally match
demand. Inventories of aged cognacs are still
too high. Hennessy’s inventories are well suited
to the “quality mix” of its shipments.
Paradis Extra,
a cognac from
Hennessy’s Prestige
line reintroduced
in 2001, has expanded
the customer base
of cognac connoisseurs.
46 • ANNUAL REPORT 2002