Campari Group has agreed to buy Courvoisier Cognac from Beam Suntory for US$1.2 billion, making it the biggest deal in the company’s history.

Founded in 1828, Courvoisier is one of France’s top four historical Cognac houses. It has been with Beam Suntory for almost 20 years. It has become the most-awarded Cognac house based on the top 20 spirits competitions since 2019, and this year it became the first and only Cognac house to be awarded the Butterfly Mark Certification, a coveted recognition among luxury brands for rigorous standards in sustainability, social practices and governance.

Campari Group Chief Executive Officer Bob Kunze-Concewitz said: “We are very pleased to acquire a top four historical cognac house, Courvoisier with great latent equity and highly acclaimed expressions. The addition of Courvoisier cognac to our portfolio of global priorities is a rare and unique opportunity 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, priming cognac to become Campari Group’s fourth major leg along with aperitifs, bourbon and tequila.

“Concomitantly, we are looking forward to accelerating our premiumisation journey, further enriching our RARE portfolio, the division created to unlock and accelerate the growth potential of a select range of high-end individual expressions in our core premium spirits markets.’.

Campari Group Deputy Chief Executive Officer Matteo Fantacchiotti said: “In what is the biggest deal in Campari Group’s
history, Courvoisier will enable a significant step up in the US while also permitting long-term transformational potential
in the strategic Asia-Pacific region.

“In addition to acquiring a globally recognized 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. Our recent investments into business infrastructure and enhanced operation capabilities, combined with Campari Group’s formidable reputation for investing in brands with strong equity and potential for long-term sustainable growth will allow us to unlock Courvoisier’s full potential.

“We are very excited to further build upon our premium portfolio of brands in the US, simultaneously adding significant leverage into China and the wider Asia Pacific arena, while also expanding the premium innovation platform for our cognac portfolio.”

Uncertain times for cognac

Courvoisier is one of the world’s biggest Cognac brands. It sold 1.2 million nine-litre cases in 2022, down by 19.4% on 2021, according to The Spirits Business’ The Brand Champions 2023 report.

Remy Cointreau cut its annual sales guidance in October, citing weaker-than-expected US demand for its high-end spirits.

However, Campari said cognac remains one of the spirits industry’s most successful categories.

“Despite current cyclical trends driven by consumption normalisation, after pandemic-induced very strong growth, negative short-term trends have been further amplified by inflation-related price increases which have led to destocking in core regions,” the compamy said.

“However, the long-term prospect of the category remains positive given structural premiumisation trends in the US, China and travel retail.

“Within the US, premiumisation across the spirits industry and particularly within brown spirits remains, while supporting demographic and macro trends point to a recovery in 2024. Within China, international spirits are growing in popularity, particularly among the younger demographic, especially penetrating major tier one cities while premiumisation remains.”

Beam Suntory focuses on must-win categories

Beam Suntory President and CEO Greg Hughes said the decision to sell Courvoisier and exit the cognac category was made because the company had taken intentional steps to sharpen its focus on its areas of strength and must-win brands and categories.

Its brands include Jim Beam, Maker’s Mark, Knob Creek, Yamazaki, Hibiki, Laphroaig, Bowmore, Roku, Canadian Club and a thriving RTD portfolio.

“We are proud to have nurtured the iconic Courvoisier brand for nearly 20 years, investing in its growth across key global markets and transforming it into a symbol of modern luxury and an industry leader in awards and sustainability,” Hughes said.

“The brand is very well positioned for its next chapter of growth, and we are confident that Campari Group is the right partner to take Courvoisier into the future. This move will allow us to further focus our portfolio on our core areas of strength as we accelerate our global growth ambitions.”

The deal is expected to close in 2024, subject to customary closing conditions.