December 25, 2023

Two drinks giants, Italy’s Campari Group and Beam Suntory have entered into exclusive negotiations to respectively acquire and sell Courvoisier, through the 100% purchase of the share capital of Beam Holding France S.A.S. which owns the cognac brand.

Courvoisier is one of the top four historical cognac houses with a strong US footprint, and a growing presence in Asia Pacific. Campari Group hopes to complete the deal – the largest in its history – sometime in 2024 after jumping through the various regulatory hoops and and consultation with representatives of the French employees.

The brand has an enterprise value of $1.32 billion (€1.22 billion) consisting of a fixed purchase price of $1.20 billion (€1.11 billion) and earn-out for maximum amount of $1.2 million (€1.1 million) payable in 2029 based on the achievement of net sales targets realized in the 2028 financial year.

A transformative move in the US

Courvoisier’s net sales in 2022, which includes the Salignac brand, were $249 million in 2022, according to Beam Suntory, with some 60% of this coming from the US. Maturing stock has a book value of $365 million with “well-balanced age profiles” to support future brand development, according to the current owner.

For Campari Group, the deal is an opportunity to enter the top league of super-premium cognac and the segment is now primed to become the drinks company fourth major pillar alongside aperitifs, bourbon and tequila. The transaction will also enable the Italian company to have a major US presence, with long-term strategic potential in Asia, too.

Bob Kunze-Concewitz, CEO of Campari Group commented: “Courvoisier (has) great latent equity and highly acclaimed expressions. Its addition to our portfolio of global priorities is a rare and unique chance to expand our premium spirits portfolio and cognac offering. By leveraging our heavy cognac expertise at board and executive-team level, Campari Group has a fantastic opportunity to reinforce this brand’s credentials as a global icon of luxury.”

Bob Kunze-Concewitz, CEO of Campari Group to buy Courvoisier
Campari Group CEO Kunze-Concewitz: “By leveraging our heavy cognac expertise at board and executive-team level, Campari Group has a fantastic opportunity to reinforce this brand’s credentials as a global icon of luxury.”

He added that the company was also going to accelerate its premiumisation journey, further enriching its ‘Rare’ portfolio, the division created to unlock and accelerate the growth potential of a select range of high-end individual expressions within the core premium spirits market.

At Beam Suntory, which has held the Courvoisier brand in its portfolio for nearly 20 years, president and CEO, Greg Hughes, said that his company had transformed Courvoisier “into a symbol of modern luxury and an industry leader in awards and sustainability”. On the sale, he added: “This move will allow us to focus on our core areas of strength as we accelerate our global growth ambitions. Courvoisier is very well positioned for its next chapter of growth.”

French foothold for Campari

The deal, as well as being geographically strategic, is important operationally for Campari. The group’s deputy CEO, Matteo Fantacchiotti, said: “In addition to acquiring a globally recognised brand with strong premiumisation credentials, we have a unique opportunity to expand our cognac production and bottling capacity in France, a core platform of our global supply chain.”

The Courvoisier move increases Campari’s distilling infrastructure and bottling and warehousing capacity in France, while also supporting the group’s other local operations. In addition it will be able to deepen relationships with winegrowers and suppliers in the Cognac region.

A strategic formula

Campari Group’s journey in super-premium French alcohol brand started in 2016 through the acquisition of the Grand Marnier, a cognac-based liquor brand, followed by the addition of Bisquit Dubouché cognac in 2017. Later in 2019, the Trois Rivières rhums and distillery in Martinique was added followed by Champagne Lallier in 2020, and finally Picon in 2022.

Campari Group has been very focused on premiumising its acquisitions by an increased focus on super-premium and higher variants and investing into liquid quality and ageing, while also streamlining portfolios and SKUs.

How Courvoisier fits into Campari’s premiumisation and pricing pyramid.

According to the company, its strategy in investing in high potential brands and developing them is “unparalleled”. For example, since acquiring Grand Marnier in 2016, new super-premium and above variants such as Grand Cuvées, are claimed to have re-established the brand as a premium cognac-liquor expression. “The brand itself has increased its size by 1.3 times after a full portfolio refocus onto high-end expressions, and the cessation of mainstream flavour variants,” said Campari in a statement.

The company says it has had similar successes with Wild Turkey bourbon, with net sales three times bigger than at acquisition in 2009; The GlenGrant single-malt scotch, now 1.4 times sales since 2006 following a refocus on long-aged expressions away from value offerings; Appleton Estate rum, now more than 2.2 times bigger in net sales since 2012 thanks to a total brand overhaul; and Espolòn tequila, which is currently 47 times bigger in net sales since inception in 2008, helped by the huge craze for tequila that is sweeping some major markets.

Campari has also had great success in building the aperitifs segment across international markets, with Aperol, almost 20 times bigger versus the time of acquisition in 2004.

Campari has done an amazing job in lifting the Aperol brand, though Courvoisier is a very different animal.

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