Campari believes Courvoisier is being sold at the wrong price point and has plans to “premiumise” the Cognac brand.

In December, the Italy-based spirits group revealed its intent to pay up to $1.32bn to buy Courvoisier from Beam Suntory, a deal set to be the Aperol owner’s biggest acquisition once finalised.

Speaking to investors today (27 February) after Campari reported its 2023 financial results, CEO Bob Kunze-Concewitz indicated the company would look to review the price and positioning of Courvoisier products.

“We’ve been looking at liquid quality and doing all sorts of benchmarks and tests. Those are very reassuring and clearly direct us towards what we would like to do over time – it’s not going to happen overnight – which is to premiumise the brand and really work on the range and price positioning. The brand heritage is there, the liquid is there, we’ve got to work on range, packaging and pricing.”

CFO Paolo Marchesini added Courvoisier “is not correctly priced” and that they see an opportunity for doing “better in terms of price”.

“We see that as an opportunity, the opportunity of improving brand gross profits as a percentage of revenues is there,” Marchesini said. “Not for year 2025 for sure, because we'll be on the first year but, thereafter, the potential is absolutely there.”

Campari's planned acquisition of Courvoisier comes as sales of Cognac in the US and China – the two biggest markets for the product – have come under pressure in recent quarters. Demand has slumped in the US, hit in part by competition from spirits including Tequila, while, in China, a depressed real estate sector and stuttering economic growth are hitting spending on high-end consumer goods.

When Campari announced the deal for Courvoisier just before Christmas, Kunze-Concewitz said the slowdown in the category sales was cyclical, not structural, adding the company was “pretty bullish” about the market’s long-term prospects.

Citing data at the time of the deal from Beam Suntory, Campari said the Courvoisier business, which also includes the Salignac brand, made net sales of $249m in 2022. The asset’s contribution after A&P was $78m, Campari added.

At the time, the Aperol owner also provided data for the first ten months of 2023. The Courvoisier business’ net sales in the period to 31 October fell 33% year on year to $148m. Contribution after A&P was $37m, though Campari did not disclose a comparable figure for the ten months to 31 October 2022.

Speaking to analysts today, Kunze-Concewitz, who is set to step down as CEO after 17 years at the helm, said the group was working with US distributors that are sharing data on the Cognac category’s performance.

“I think they’re pretty much seeing the end of destocking [in the category] within Q1 and then expect stability Q2 and then category to return to growth in Q3,” Kunze-Concewitz said.

Campari said it is looking at hiring marketing executives who have “significant” Cognac experience to work on a relaunch of the Courvoisier brand, Kunze-Concewitz said. He also nodded to the background in the sector present on the Campari board. Former Rémy CEO Jean-Marie Laborde and ex-Moët Hennessy chief executive Christophe Navarre are board members.

In 2023, Campari generated group net sales of €2.9bn ($3.6bn), an increase of 8.2% year on year. EBIT rose 5.6% to €540.2m. Adjusted EBIT grew 8.6% to €618.7m. Group net profit dipped 0.7% to €330.5m.

Campari said its sales were primarily driven by the “solid brand momentum” of its aperitifs, Tequila and Bourbon brands.