Martell Sales Grow driven by China, North America.

Martell’s parent company Pernod Richard announced its second half 2016 operating results today. Pernod Richard’s sales grew 3% during the second half of 2016. Sales of Martell cognac outperformed Pernod’s sales with 7% sales growth. Martell sold 1.3 million cases of 9 liters, or 15.6 million bottles during the six month period from July 1, 2016 to December 31, 2016.

The Pernod Richard investor’s presentation noted re Martell’s sales growth:

Martell: +7%, return to strong growth in China

• China: +10%, favoured by earlier CNY2
• Good growth outside China fuelled by fast development in USA and Travel Retail
Americas
• Growth coming from all segments of range. Cordon Bleu back to growth in China.
China

The presentation also noted that Martell’s growth was driven by expanding distribution and increasing visibility across USA airports where travelers take advantage of duty-free spirit sales.

Sales growth in the second half of 2016 at Martell outpaced other Pernod Richard liquor brands including Absolut vodka (+1%), Chivas Regal whiskey (-1%), Ballantine’s whiskey (6%), Havana Club Rum (5%), Beefeater Gin (5%), Glenlivet whiskey (0%), Richard (2%), Royal Salute scotch (3%) and Mumm sparkling wine (3%). Only Pernod Ricard’s Jameson’s whisky (20%) and Perrier-Jouët champagne (9%) out paced Martell’s sales.

Martell is second to Hennessy in cognac sales and has set a goal of selling four million cases of cognac in a year by 2025. According to French news outlet Sud Oest “Since the entry of the house into the fold of Pernod-Ricard in 2001, sales of Martell have doubled”. From current sales levels of about 2.5 million cases a year, to get to four million cases sold a year, Martell sales would have to grow another 60%.

Cognac sales hit a record in 2016 according to the Bureau National Interprofessionnel du Cognac (BNIC) reaching approximately 179.1 and achieiving sales growth of 6% year over year.