Remy Cointreau Pressed to Diversify Beyond Cognac Amid Market Downturn

Remy Cointreau investors urge the company to diversify its product range as its heavy dependence on cognac sales in the U.S. and China makes it vulnerable to market downturns. The company plans to expand its portfolio and sales in other regions, but investors recognize this will be a long-term effort.

Investors of Remy Cointreau, the company behind Remy Martin cognac, are calling for greater diversification as its reliance on cognac sales in the U.S. and China makes it susceptible to global market declines.

The company, which generates around 70% of its sales from cognac, has already signaled intentions to expand its portfolio to include more products like Cointreau liqueur and The Botanist gin. However, its performance has been hindered by destocking in the U.S. and slower-than-expected recovery in China.

Three investors informed Reuters that diversifying away from cognac has become crucial to mitigate risks when key markets underperform. Remy's shares hit their lowest level since 2016 following missed sales expectations in the first quarter, highlighting the urgency for diversification.

(With inputs from agencies.)