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Peter Marshall Send an email November 8, 2023
11 minutes read

Remy Cointreau Profile: Market Trends, Product Portfolio and Sustainability Ian Mclernon and Laetitia Delaye-Beineix Interviewed

Introduction by: Peter Marshall

This is a special feature. Remy Cointreau has a great history as a brand and has an excellent portfolio of products. I recently met up with Ian McLernon, CEO-EMEA, Asia Pacific and Global Travel Retail and Laetitia Delaye-Beineix, Remy Cointreau’s CSR Director at TFWA in Cannes to talk about key trends, market opportunities, brand launches, promotions and something else where they are a leader in the market – sustainability. It’s a very inclusive interview and provides  genuine insights to this remarkable business.

PETER MARSHALL (PM):  Ian, what do you see as the major trends in the spirits market?

IAN McLERNON (IM):  We have seen several exciting trends over the past decade that are shaped by things like evolving consumer preferences and changing shopping behaviours amongst travellers. These are things that have been accelerated post pandemic, and impact not only the spirits category but the broader global travel retail channel as well.

A big theme we’re seeing is the idea of “trading up” where provenance, differentiation, and innovation have become key factors that impact what travellers decide to buy. Travellers are willing to trade up with brands that have strong values, offer differentiation in GTR vs domestic through exclusive SKUs and that animate in a way that adds value to their enjoyment of the product.

These trends are about more than just the products themselves. It’s about the whole experience for consumers. Experiential activations make shopping more than just picking products, but let consumers connect with our brands in interactive and immersive ways. For example, learning to make that cocktail you love at bars but never tried at home. By offering unique and unforgettable moments, along with exclusives you can only get in certain locations, our brands can create stronger emotional connections and drive loyalty with travellers. This approach also lets us present our products in a genuine way while helping our retail partners boost their profits, especially with the higher-than-average transaction value.

Another growing area of travel retail offerings is gifting. Travellers typically keep a lookout for special goodies they can take home for loved ones– and this gives us the opportunity to satisfy this demand with products that celebrate elements of the travellers’ journey and the places they’ve been to, allowing them to share meaningful souvenirs with family and friends. We have seen this in action, especially in Greece, where Metaxa is the must-buy gift on departure.

Keeping up with the bigger picture in travel retail, digitalisation is a can’t-miss. All around the world, social media and online shopping is now a crucial aspect for connecting with travellers before, during, and after their journeys in this evolving landscape.

PM:  So where are you seeing opportunities for your portfolio in the channel?

IM: Rémy Cointreau GTR plans to make the most of our extensive portfolio, rich heritage, and expertise and tap into the growing trend of consumers opting for quality over quantity in their beverage choices. This trend gives us the chance to shine a spotlight on our premium offerings to travellers who are looking for exceptional spirits across the various categories.

On top of that, our team believes in partnership and look forward to working closely and strategically with the Trinity, which includes both our retail and landlord partners. Given that most of our products are aged, we believe in planning for the future and fostering mutually beneficial and long-term collaborations with the Trinity.

PM:  What activations are you especially proud of this year?

IM: We’ve been thrilled with the positive response to our travel retail exclusives, and this has driven us to introduce two exciting innovations in the past year. The first was the debut of the first ever liquid innovation for The Botanist gin, Hebridean Strength. We launched this exclusive release in nine locations across Europe and Australia, each featuring impressive activation spaces for travellers to enjoy immersive experiences. At Istanbul Airport for instance, an engaging product discovery bar took visitors on a multi-sensory journey, and included interactive features like a scent-paper kiosk, nosing trumpet, and 3D discovery table. Visitors were invited to explore the unique flavours of the Hebrides, delving into the scents, botanical mix, and the inspiration drawn from Islay’s landscape that define the gin’s expression.

Another launch that we were particularly proud of was the travel retail exclusive Rémy Cointreau Club Exception, which was unveiled with high-profile promotions at Paris Charles de Gaulle and Hong Kong International Airport from April. The stunning installations were designed to captivate travellers and introduce them to the new Cognac through a multi-sensorial experience. Travellers were encouraged to engage in interactive tasting sessions featuring crafted pairings that highlighted the distinctive notes of the Cognac Fine Champagne. The gourmet pairings also included a selection of ingredients carefully chosen to bring out the flavours of the liquid.

In addition, we launched the Cocktail Gateway activations for Cointreau across key locations such as Paris, Frankfurt, Changi, London, Auckland, and Melbourne. This interactive concept treated travellers to tastings of classic cocktails from different corners of the world across history. With a focus on highlighting the diversity of the Rémy Cointreau portfolio, these activations encouraged our valued travelling clients to explore the versatility of our spirits, with a special emphasis on Cointreau as a key ingredient in over 500 cocktail recipes.

PM: Laetitia, can you outline how you are specifically addressing sustainability within your TR operations?

LAETITIA DELAYE-BEINEIX (LDB):  Sustainability is a core aspect of our company’s mission. Within travel retail, we’ve recently introduced our new Global Travel Retail leadership team, headed by Fida Bou Chabke. Fida will also lead the Diversity, Equity & Inclusion topic in collaboration with the Committee that represents all our countries worldwide.

Our on-site operations are underpinned with a steadfast commitment to sustainability, emphasising efficient energy usage, waste reduction, and responsible resource management aimed at minimising environmental impact. Sustainability is not just an idea, but a guiding principle across all our activation spaces. We prioritise the use of eco-friendly materials and energy-efficient lighting in our designs. For instance, at the TFWA, 60% of our stand was made from reused materials and most of them will be reused again or recycled.

Furthermore, we’ve adopted sustainable packaging methods, reducing our reliance on materials that harm the environment, and made efforts to minimise the use of gift boxes in many cases. 78% of our bottles are already sold naked and we are targeting 85% by 2025 at Group level! Some of our brands have gone the extra mile by completely eliminating gift boxes such as Telmont or Cointreau.

Collectively, these initiatives demonstrate our dedication to addressing sustainability concerns throughout our travel retail operations.

PM:  I understand that Rémy Cointreau is focusing a lot on soil sustainability. But how are you tailoring this when it comes to the different locations where you operate. Islay compared to Barbados, for example. 

LDB: Indeed, all our Houses are rooted in specific terroirs that make them unique. Our goal is to preserve them for the coming generations. For that, we are deploying our “New Generation Terroirs” programme, that includes, among other investments, the transition of all our estates to regenerative agriculture. Gradually, we’re adopting agroecological farming techniques that aim to revitalise biodiversity, capture more carbon, and enhance water retention, all while maintaining good yields. These core principles are implemented uniformly across all our Houses, involving practices like cover cropping, reduced tillage, organic matter integration, and reducing synthetic inputs. We also work closely with local experts and institutions to identify and implement the most effective approaches.

Naturally, we tailor our farming methods to suit the distinct characteristics of each soil. This means using custom green fertilisers, such as bird manure in Barbados. An example is our pioneering venture, Hautes Glaces, our French Alps whisky that created the oldest organic distillery in the world and embarked on this journey as early as in 2009. The results speak for themselves, as evidenced by soil health assessments conducted by GENESIS, a leading soil health rating agency. These assessments consistently show the tangible benefits of our regenerative farming practices. Most impressively, at Hautes Glaces, our soil health now rivals that of a forest.

PM: You aim to halve bottle emissions by 2030. As we know, ‘per bottle’ emissions are notoriously difficult to capture. What reporting or tracking measures are you using?  

LDB: Our commitment to reducing bottle emissions by 50% by 2030 is indeed an ambitious undertaking, especially when it comes to measuring emissions per bottle. However, we’ve established strong reporting and tracking methods to monitor our progress toward this ambitious target.

To quantify our efforts comprehensively, we take a holistic approach. We calculate the total emissions across scopes 1, 2, and 3 and then divide this by the number of standard bottles produced. This method provides a transparent and accountable view of our emissions per bottle, ensuring that sustainability remains at the forefront of our priorities.

Since 2020, we’ve already made progress, achieving a 5% reduction in emissions. Our goal is a 50% reduction by 2030. It’s worth noting that this target factors in carbon capture by soils, underscoring our commitment to a well-rounded approach to environmental responsibility.

A key lever in achieving that target will be packaging (close to 40% of our emissions). Thus, we’re actively pursuing strategies to reduce the weight of our bottles. A good example is Champagne Telmont, which now boasts the lightest bottle in the Champagne market. Our partnership with Verallia, a leading glass manufacturer, has also been instrumental in this endeavour, enabling us to launch weight reduction projects across our entire portfolio. Notably, three of our spirits brands – Mount Gay rum, St-Rémy brandy, and Belle de Brillet liqueur – have already experienced the benefits of these reductions, achieving impressive glass weight reductions, ranging from 2% to 11%. These reductions not only contribute to lower emissions associated with glass production but also lessen the carbon footprint tied to bottle transportation. Close to 70% of our bottles have already benefited from a significant eco-design action and we target to have 80% completed by 2025.

PM: Are you building offsetting into any of your CSR strategies?

LDB: Certainly, alongside our efforts to reduce our carbon footprint, we’re actively investing in six climate solidarity initiatives within our key markets, the United States and China. This is our way of playing a part in supporting our important markets as they transition towards cleaner energy and a more eco-friendly environment.

PM:  Moving on, how are you dealing with the use of peat in both the US and Scotch malting? And are you sharing technical expertise in reducing peat use across both categories? 

LDB: As a business firmly guided by our environmental values, we uphold responsibility for our impact at every stage of the whisky-making process. We assess all aspects, from the health of the soil and how we cultivate our raw ingredients, to the packaging and final spirit enjoyed by clients.

Peat holds a special place in the cultural heritage of whisky production, with the Scotch Whisky industry accounting for approximately 1% of Scotland’s total peat consumption. We recognise our role and are committed to the responsible use of peat.

As members of the Scotch Whisky Association (SWA), we share the SWA’s vision for a sustainable future regarding peat usage within the industry. The SWA focuses on three critical areas: responsible extraction, optimising the malting process, and land restoration and stewardship. We’re actively exploring practical ways to reduce our environmental impact in these areas.

Collaborating closely with the SWA, we acknowledge that land use, including peat, is just one part of the broader sustainability equation. The SWA not only works in tandem with member companies like us, but also engages stakeholders at government levels, within the environmental sector, and throughout the peat supply chain. Together, we aim to establish best practices that ensure peat usage within the Scotch Whisky industry remains efficient and sustainable for the future.

PM:  Let’s stay on sustainability and tell us some of your social sustainability initiatives.

LDB: In our Group, we hold three core principles close to our hearts: Terroir, People, and Time.

When it comes to our people, their well-being is a top priority and we make sure to provide flexible and supportive working conditions, even doing away with probationary periods for new hires.

In 2021, we introduced an employee ownership plan in France, which saw remarkable success with 76.7% participation. In 2022, we expanded this program to non-French employees, with 49.1% participating. As a result, an impressive 61% of our Group employees are now shareholders, which reflects our commitment to actively involve our team in our long-term vision.

We also offer comprehensive training, with a wide range of “academies” enabling our employees to strengthen their skills. All of our teams also have to follow a mandatory training on responsible consumption, as part of our “RESPECT program”. And last but not least, our Climate Fresque sessions, available to all employees, have already engaged over 30% of our global workforce, underlining our commitment to raising awareness of climate-related issues.

Our commitment to CSR extends to our regions where we hold annual CSR days held in China, Barbados, our headquarters, the United States, and more. These events ensure that our Sustainable Exception roadmap remains a central focus for our employees.

What truly sets Rémy Cointreau apart is our strong commitment to partners and communities. For instance, we support farming communities by helping them get agricultural certifications and financing the switch to biogas for distillation, especially in Cognac.

We also invest significantly in research and development to share knowledge within our industry. For instance, as part of our New Generation Terroirs program, we’re at the forefront pioneering an insurance program with AXA Climate that covers yield losses in exchange for reduced synthetic inputs..

Additionally, we’re committed to training the next generation. Our aim is to train 100% of our agricultural and direct winegrowing partners in regenerative agriculture by 2030, securing a sustainable future for our industry.

PM:  Are you in a position to outline how much you’re willing to invest in CSR measures. Is there a cost-benefit analysis framework, for example? How expensive would a clear and obvious sustainability measure need to be for it not to be adopted?

LDB: Our Sustainable Exception roadmap commits 80 million Euros over a decade. While we’re certainly mindful of cost-benefit analyses, there are moments when sustainability takes precedence over immediate ROI. One prime example is our choice to support eco-friendly maritime transport over air travel. Our primary goal is to contribute to the maritime industry’s transition to greener practices, in line with our broader sustainability objectives.

We’ve teamed up with the experts at NEOLINE who are trained in wind-powered shipping, to transport 250,000 bottles annually from France to the US in 200 containers, starting in 2025. We’re also joining hands with ZEPHYR & BOREE to use sail-propelled containers and green hydrogen, beginning that same year. These initiatives may not show immediate financial gains, but they uphold our commitment to sustainability and reducing our environmental footprint.

PM:  How are you working with others in travel retail and spirits to share learnings when it comes to sustainability?

LDB: We’re actively teaming up with both our fellow spirits industry colleagues and partners in travel retail to share our sustainability know-how. We believe in the strength of collective action when it comes to corporate social responsibility (CSR). It’s inspiring to see how CSR values can bring competitors together, all for a common good.

One standout initiative we’re excited about is the Telmont Guide to Sustainability. We’ve made this guide accessible to everyone, including our competitors, because we’re firm believers that sharing sustainable practices with a wider audience can have a positive ripple effect.

We’re not just stopping here. Alongside our partners like Moët Hennessy, WWF, and Genesis, we’re working to accelerate the shift towards regenerative agriculture. This unique collaboration focuses on developing an environmental credit to measure the positive impact of regenerative farming practices, and to financially accompany the farmers in the transition.
 

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Peter Marshall Send an email November 8, 2023
11 minutes read

Peter Marshall

Founder: trunblocked.com/Marshall Arts
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