The world of spirits will see a “post-COVID renaissance,” according to Möet Hennessy, the French producer of cognacs and champagnes, in which drinkers will repopulate restaurants and bars and splurge on fine wines and spirits in a “revenge of pleasure or the new Roaring 20s,” CEO Phillippe Schaus said.
“It’s clear people are almost desperate to enjoy food and drink again,” he noted in comments quoted by the Financial Times.
The trend is evident in countries, such as the U.S. and Australia, where lockdowns are largely ending, as well as in Italy, France, and elsewhere that restrictions on movement and business are still partly in effect, he said.
The economic shutdown left many people with money unspent, especially with government stimulus payments padding their bank accounts, he noted.
That extra money has led U.S. consumers to create a booming market for Hennessy’s cognac, leaving the company struggling to meet demand and boosting the valuation of smaller competitor Rémy Cointreau to a record level.
After sliding in spring 2020, major spirits companies’ price-to-earnings ratios have recovered above levels in place before the shutdown, the WSJ reported.
For Möet Hennessy, that meant sales dipped 15 percent in 2020 to €4.8 billion and operating profit slid 20 percent to €1.4 billion; but revenue bounced back to €1.5 billion in this year’s first quarter, 12 percent above the same period in 2019.
The new level of pleasurable indulgence is here to stay, Schaus thinks, but “you probably have to wait six months to know” how many bars and restaurants will survive, he said.
TREND FORECAST: It comes as no surprise to Trends Journal subscribers that much of the world is ready for “revenge of pleasure or the new Roaring 20s.” It was one of our Top Trends for 2021!
On the other note, Mr. Schaus is partially correct about “you probably have to wait six months” to know how many bars and restaurants will survive.” We forecast there will be a sharp summer bounce and then a winter decline. However, the market sector for high-quality products will continue to stay strong as the lower classes decline and the upper classes move higher.
