Louis Vuitton 2003 Annual Report Download - page 28

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26 LVMH RAPPORT
ANNUEL 2003
CHATEAU D’YQUEM
In 2003, Château d’Yquem marketed its 1998
vintage, a wine remarkable for its delicacy and
elegance.
At the same time, promotional campaigns were
stepped up to expand the international brand
recognition of this exceptional label and to
develop ideas for consumption based on gour-
met dishes from past centuries.
The 2003 harvest began early in Yquem on Sep-
tember 17 and ended quickly on September 26.
This atypical harvest will long be viewed as an
exception, the result of an abnormal summer
and a total blight. All these factors point to a
very good vintage.
COGNAC AND SPIRITS
Cognac distillation from the 2003 harvest,
which was stable, compared with the previous
harvest, fell below current output from the
Cognac Region. Regional cognac inventories are
down, but still do not correspond structurally
to needs. Stocks of Hennessy are well adapted
for distribution of its sales in terms of different
qualities of cognac.
The vineyard in the delimited region, with
around 75,000 hectares planted, is still too
large compared with the current output from
the region to provide sufficient income per hec-
tare for the wine growers. However, the inter-
professional association decided to raise the
quantity normally used to produce wine which,
for the 2003 harvest, was raised from 6 to 7 hl
of pure alcohol per hectare. The restructuring
of the Charentes vineyard is scheduled to conti-
nue in the next few years to bring production
areas back into balance.
HENNESSY
With further growth of 5% in volume sales in
2003, Hennessy consolidated its undisputed
position as the world leader in cognac.
HENNESSY INTENSIFIES ITS POPULA-
RITY IN THE UNITED STATES AND
GAINS MARKET SHARE IN ASIA.
The commercial successes in the United States
and Asia, the brand’s recovery in Japan and
Europe, combined with a solid manufacturing
and operating performance enabled Hennessy to
make further improvements in its operating mar-
gin and profitability in an economy hard hit by
the currency effect.
In the United States, sales of V. S continued to
rise thanks to strong brand recognition in the
African-American community. Sales of V.S.O.P
grew even faster, at a rate of over 10%, due to
the policy to create value for the brand initiated
a few years ago. The power of its distribution
network and its strong advertising presence pro-
ved decisive factors in this growth, which enhan-
ced the brand’s leadership position.
Thanks to its strong brand image and the rele-
vance of its strategic choices, the position of
Hennessy cognacs, once the SARS epidemic was
eradicated, quickly gained ground in Asia.
WS
INES
pirits
&