LVMH: Back from Champagne

研报英文原文证据摘录

LVMH: Back from Champagne

UpdateMpurchasing power could support demand over time, the expert noted

that Champagne remains less well aligned with local tastes (dislike of

bubbles/sparkling) and consumption habits (spicy foods in Asia ex Japan)

compared to spirits and red wines, limiting its long-term penetration

potential.

° By contrast, the expert highlighted a far more challenging and

structurally uncertain outlook for Cognac. The category is currently

“going through a long tunnel”, facing both cyclical and structural

headwinds, including heavy geographic and consumer concentration

(with ~80% of demand tied to the US and China, and in the US skewed

to a relatively narrow consumer base of mostly aspirational, while in

China it is tied to very wealthy and sophisticated clients), a recent

consumer preference shift in the US from Cognac to Tequila post

Cognac's price hikes (which the expert argued could last a very long

time), rising competition from local spirits in China, and broader

consumer shifts away from spirits. In addition, Cognac’s long ageing cycle

(~20 years) creates significant cash flow and inventory management

constraints, amplifying volatility.

• Champagne industry is supply-constrained, so growth is dependent on its

ability to premiumise. Given that the number of hectares is fixed at only

30,000, volume growth (over the past 10 years) has been minimal and will

remain so, and the total number of bottles produced has remained

essentially constant at ~300m. As a result, total industry sales have grown

by approximately +2.2% CAGR over the period (to €5.2bn in 2025 - see

Exhibit 3 ), essentially driven by price and mix. As we discuss below, there is

a view that, following the strong rebound in demand after the start of the