2020 has been a roller coaster for many sectors of the global economy. The coronavirus pandemic led to widespread shutdowns that resulted in major losses for businesses throughout the world. The wine and spirits business of LVMH was also not spared. Just like many other brands, it experienced a massive slowdown in Q2 2020.
But, Q3 seems to be much better with LVMH experiencing a marked improvement in trends with more consumers coming back into the market. The organic revenue for wines and spirits dropped by 3% in Q3 2020 to reach €3.349 billion (US$3.9bn). These figures are considerably better than the 33% sales plunge in Q2, and the 14% drop in Q1 2020.
For the first nine months of 2020, organic revenue was down 15% compared to last year, mainly due to the impact of the current health crisis. Analysts believe that Hennessy Cognac is the main driver of the strong recovery recorded by LVMH in Q3 2020. That recovery was driven by VS expressions and ‘exceptional stimulus support’ for consumer demand in the United States.
The firm also released a high-end rum in the third quarter of this year, called Eminente. A statement from LVMH stated:
“In a very turbulent context, marked by continuing economic and health uncertainties, LVMH will continue to exercise caution, strengthen its cost controls and selectivity in its investments. The group will maintain a strategy focused on preserving the value of its brands, by continuing its marketing and communication investments and relying on the exceptional quality of its products and the reactivity of its organisation.”
LVMH will now rely on the power of its different brands and the talent of its teams to ensure that it remains at the top of the global luxury market even beyond 2020. In September, Hennessy partnered with architect Frank Gehry. The partnership is geared towards the building of 150 limited edition XO decanters.
The 150 decanters will be created for £15,000 (US$19,130) to mark the expression’s 150th anniversary.