Rémy Martin Defined. Fida Bou Chabke, CEO Global Travel Retail, Rémy Cointreau, Interviewed.
11 minutes read
Introduction by: Peter Marshall
As you all know, Rémy Martin is celebrating its 300 Year Anniversary in 2024, so TRunblocked.com is pleased to share this special year with 3 defining interviews across this week that are dedicated to this unique and remarkable French cognac house.
I first spoke with Fida Bou Chabke, CEO Global Travel Retail, Rémy Cointreau about the company’s vision, strategy, brands and all things Travel Retail.
Peter Marshall (PM): Fida, welcome to TRunblocked.com. Let’s start this conversation by asking you to walk us through the basic differences between how you relate to the Travel Retail market compared to the domestic market?
Fida Bou Chabke (FBC): Hi Peter. Thank you for having me. For us, travel retail gives us the opportunity to educate, to surprise and ultimately recruit travellers. So when we offer our core range in travel retail, we also develop dedicated products and services to cater to this channel – whether it’s for gifting, or different liquids to discover, or new facets of our range or special activations.
This year we had a lot of new projects, of course celebrating Rémy Martin’s 300 years – the domestic market did as well. But for us we had a range of special editions and activations across the globe, the latest being our popup in Charles De Gaulle, where we invited travellers to an immersion in our heritage and our lifestyle. And that’s how travel retail is special for that because you can reach travellers from everywhere in one single place.
We’ve also launched a new range of traveller’s exclusive of our Bruichladdich Single Malt, for example, and that’s special to travel retail, with great success.
We aspire to bring a different perspective by creating truly luxurious and engaging experiences to create deeper connections with travellers that are worthy of their limited time.
PM: So, with you, it’s always and only about a focus on quality over quantity.
FBC: Absolutely.
PM: But does this actually mirror the research that you conduct and the data that reflects that consumers nowadays are drinking less, but genuinely opting for higher quality, or is it that there’s just a general decline in sales?
FBC: First of all, yes, you’re right. To say that we focus on quality, including in execution, we pay great attention to every detail and we challenge ourselves a lot that we know reflects the excellence of our liquids in every activation. And this is not new for Rémy Cointreau whose vision is to be the leader of exceptional spirits. So we don’t necessarily mean pricey spirits, because in our portfolio we have products covering all price points.
PM: We’ll get to that later.
FBC: But it’s really all about People, Terroir and Provenance and the Time. And the result is really that products are rigorously selected, with ingredients from the best terroirs that have been transformed by time and the savoir-faire of our people.
PM: OK, let’s move on and look at a brand like Louis XIII, where you are certainly competing in the luxury goods space, and not just against other spirits. Its packaging is world famous. It positively enhances its desirability, it invites people to buy. Yet, with all the other sustainable actions Rémy Cointreau is taking – like banning single-use plastics and reducing excess packaging – how do you see the packaging here now evolving? Because evolve it must, surely?
FBC: Surely. Yes, you know this question is even more special to me because, before this role, I was looking after Louis XIII for the Americas.
The journey of sustainability is really a continuous one and each one of our brands has engaged in this journey. For LOUIS XIII specifically, we started to raise awareness about climate change through global campaigns #ifwecare with Pharell Williams back in 2018. And the brand has been working on multiple initiatives for packaging because, for Louis XIII, packaging has different functions depending on the channel.
So the first initiative that was launched In 2019 was for the on-premise channel and was a simple cardboard box. Because here the function of the packaging was just to protect the bottle, and then you get a separate glorifier behind the bar that was provided to display the bottle. And the other thing that we did was to collect empty bottles from partners and from our own ambassadors to recondition them into display bottles.
For retail, of course, the main role of Louis XIII packaging is to glorify the bottle. And last year our Maison launched a new coffret, that you can see here, that is made 100% of cellulosic material. Not only did it help to drastically reduce our carbon footprint by 57%, it also provides a best-in-class unboxing experience, and an integrated glorifier.
In our domestic market boutiques, you can also have an experience where your decanter can be cleaned and refilled with the “infinity wheel” – a beautiful and seamless experience that lives up to the beauty of the Louis XIII decanter.
And as for our latest limited edition, Rare Cask, it comes in a beautiful wooden box that will last over the years for such a collectable item.
PM: That’s really interesting, because my next question is about the bottle itself. It is a piece of art. But you’ve seen recently what Diageo had just piloted with Johnnie Walker where the new bottle has a massive weight reduction, but is still highly durable. You really can’t do that with your glorious bottle because buyers keep it – even if they only put a candle in it! – they keep it as a piece of art for display. So what can you do?
FBC: Of course, because it’s hand made, you have the thickness of the bottle. But we are looking at initiatives to deliver lighter bottles, if possible. Indeed, every brand in our portfolio is looking at this currently. For example the new Bruichladdich Classic Laddie bottle contains an average of 60% recycled glass compared to the previous bottle, and it’s 32% lighter. Total packaging CO2 emissions have been reduced by 65%. And Telmont, with the lightest Champagne bottle in the world developed in collaboration with Veralia.
But we have to consider fragility and whilst we accept things may not be perfect now, we are constantly seeking to improve. And the good thing is that glassmakers and packaging makers are also on that pathway.
PM: Now, as we said earlier, you do have a broad portfolio of brands, straddling different types of consumer and spend levels. And this diversity is certainly a positive. Yet the business is firefighting at the moment, like many others, because there is a real drop in sales. Will your strategy change in the coming months in order to better adapt to the changed circumstances that you face, notably in cognac sales?
FBC: Yes. For us what’s important is the long-term vision, and we don’t plan to be in panic mode. We’ve seen some players being in panic mode, with aggressive promotions over extended periods of time in all categories but specifically in cognac.
PM: All that’s doing is devaluing their brand.
FBC: Exactly. Price can only get you so far, and contributes to destroy value across the chain and image in the longer run. We are a family-owned group and we have the support of our family to embrace a longer term vision. And in travel retail, our approach is to improve the perceived value for consumers through additional services and experiences that you cannot find in other channels. In the current context we need to be even more agile, cost efficient and creative to bring these ideas into life in a fast and scalable manner.
PM: We’re here now at TFWA Cannes and it is, of course, the major venue of the year to showcase new products, special editions, Travel Retail exclusives and, hopefully, new thinking. So, what news is there across your brands that you can share? There’s quite a list, isn’t there?
FBC: There is. If I start with Louis XIII, we are customising a little bit more for our consumers, with package customisation and more experiences. There is an exciting line-up of limited editions from Rémy Martin. You can also see further customisation for the XO. Bruichladdich is launching global travel retail exclusive single malt whiskies, and we’re very excited about the launch of the 16 year old organic, adding to the range of the Bruichladdich Classic Laddie sherry oak cask and 21 year old. And this one is going to start at the beginning of 2025 hopefully.
Every brand has been delivering exciting projects. You can also see the debut of the Westland American whiskey portfolio, for example, further underscoring the breadth and depth of the group’s impressive product offering.
Cointreau is developing one project based on cities and cocktails, Metaxa has new limited editions as well, St-Rémy some surprises, too, and for Mount Gay we are also launching the second edition of the single estate series that is taking rum to the next level in terms of provenance and taste.
PM: That’s good to hear. Just an ancillary question here. How do you make sure that your smaller brands – the likes of Metaxa and The Botanist, for example – get enough focus in global travel retail? How can you nurture those brands to secure more shelf space and focus from the retailers?
FBC: Metaxa is a regional power brand. In fact it’s #1 premium brandy in many Eastern Europe markets in both GTR and domestic. It has of course traction and visibility across main Greece’s airports, and this summer we just renovated most of our fixtures with our new design. And, you know, we have our teams on the ground to recruit travellers that are less familiar with the brand through liquid to lips and a wide range that meets different consumer needs. But Metaxa is also very popular in Europe especially Germany, Eastern Europe, the Levant. And we see traction from other nationalities too. In the Grape Brandy category, Metaxa actually has an 18% market share in Travel retail. St-Rémy, too, has a 20% share of Grape Brandy, so combined, those two brands are performing well in travel retail.
The Botanist is a global brand with distribution in all key airports and channels with a prominent ranking in super premium gins. Are we satisfied with the visibility today? Not really, except for key airports in APAC, ANZ and the Middle East. In Europe, the space for liquor brands to express their identity is diminishing, with a trend among retailers to increasingly express their own brand, through more standardised wall bays and gondolas. The Botanist is also the business class partner of airlines and lounges such as Emirates First class for the Hebridean strength expression. But we’re obviously looking to do more.
PM: And talking of building out brands, do you believe that this is possible for Bruichladdich as well as, say, Port Charlotte (PC) and Octomore? The one distillery offers products with such a broad flavour spectrum. Is there new data that shows a declining interest in peat?
FBC: I haven’t seen data for peat specifically – IWSR unfortunately doesn’t provide the breakdown for peat – but for our PHD Malts range, we’ve had a lot of traction for PC10 and Octomore that were reintroduced to the channel this year.
We’ve also worked on a family display concept to feature the depth of the range. Each product has a role to play and we’re very satisfied with the growth vs 2019 and vs last year. Retailers actually ask us for more volumes and more expressions, but Octomore and our newest Bruichladdich 21 year old are limited releases.
PM: That’s good. Again, and you touched on this earlier, how much importance do you now attach to storytelling around your brands and in-store activations? Are you being pulled in by retailers or are you more in control of your destiny?
FBC: Storytelling is a key element of each of our brand’s identities, right, and while we need to continue to find new ways to tell stories in a travel retail space – it’s not only during activations, it’s also to tell our stories outside of activation mode – how to we tell our stories and adapt to new generations of travellers, is what we need to work on. But the story itself will not change, it’s just the way we convey the story that will resonate more with the consumers today. So how you tell your story in a consumer-centric way is what brands need to crack and constantly evolve.
PM: The pressure is on you.
FBC: Exactly. Consumer-centric is the word. But, of course, our ambassadors are also on the ground to help tell the story, and we dedicate a lot of resources and time to engage them with our brands, so they can in return engage the travellers.
This year, for example, we had the chance to retell the story of Remy Martin 300 years through the Dream Forward activation, through multi-sensorial experiences in our pop-ups.
We also told a story together with British Airways who celebrated its 70th anniversary of the London/Barbados connection, with a special feature of Mount Gay Rum on board.
Next year, we have other milestones to celebrate with St-Remy, and we will continue to write the story with new important themes such as CSR.
PM: So, let’s progress and look at the organisation’s structure. Your global travel retail team is growing. This is clearly a recognition to support the dynamic of the business and clearly sets out to generate stronger relationships with your partners. Can you briefly outline the structure of the new team?
FBC: Absolutely, we believe in this channel as much as we believe in building great relationships with our partners and that’s why we’re investing in people. So this year we’ve strengthened our organisation with the appointment of two new Managing Directors, whose role is really to coordinate our key retailer management as well as our operations on the floor. So they are in charge of commercial and retail. but we also brought back under GTR banner additional channels, and colleagues.
So, the channel is headed by myself as GTR CEO. Reporting to me are David William Dang as Managing Director Global Travel Retail (GTR) APAC and Thibault Robert as Managing Director Global Travel Retail (GTR) EMEA & Americas. Retail management and education report to Thibault and David, as coordination between key account management, regional management and retail management is key to achieve our commercial goals. And then we have Alice Hoffmann as Global Marketing Director and Philippe Ritoux is Visual Merchandising director at all the airports and all the beautiful scenes you see here in our exhibition space.
I report to Ian McLernon, who comes from a GTR background in both spirits and cosmetics, and he not only looks after travel retail, but also SNAP and EMEA domestic as well.
PM: One last question, Fida, if there are three things you want to communicate to the industry, what would they be?
FBC: So the first one is, for us, family ownership means we are here for the long-term view. I mentioned this already, but it’s very important for us. And while difficult times represent a temptation to fallback on promotions on products, and charging higher costs to play to brands, I think we should all be careful on the short and longer term value creation.
PM: It’s a slippery slope, isn’t it, if a brand just keeps dropping the price to stay in the game?
FBC: Yes. The second point, and as a consequence of the above, we need to keep the pace on sustainable practices. Because sustainability also comes at a higher cost and takes courage (for example to eliminate excess packaging), to provide sustainably sourced GWP’s, etc.).
And the last point, but not the least, is that I really hope that we will see all players of the route to consumer work hand in hand to disrupt the way we do business, to become more consumer centric, to reset and increase conversion again.
