Whether the pandemic is over or not, the era of restrictions is winding down, and people seem to be celebrating with a sparkling glass of champagneor maybe a whole bottle.
Moet Hennessys chief executive Philippe Schaus told Bloomberg that the company is running out of stock of some of its top champagnes, so much so that theyre calling it the roaring 20s. But dont worry, Schaus said therell be more supply next year.
Driven by recovery in the aftermath of World War I, the roaring 20s was a period of economic growth fueled partly by the rapid rise of technology and the transition to a free market economy. Its also remembered as a period of excess, commonly associated with overflowing champagne flutes, flapper dresses, and raging parties.
So despite the current faltering economic state of high inflation, rising interest rates, and warnings of a looming recession, peopleor those who can afford a bottle that starts at around $60seem to be celebrating.
But Schaus added that inflation, and an increase in the cost of raw materials, could mean the company will have to raise the prices of some of its products. And those price hikes could be high single-digit or low double-digit amounts, he told Bloomberg.
Octobers CPI report revealed prices in the U.S. rose 7.7% from the year earlier. That number is still high, but growing slower than expected, and down from Junes record high of 9.1%. Meanwhile, the consumer prices in the Eurozone rose by 10.7% in October, up from 9.9% in September.
Moet Hennessy is a wine and spirits division within luxury brand LVMH, with 25 winemaking maisons (French houses) across the world. LVMH (which includes its fashion and leather goods division and its perfume and cosmetics division, among others) reported a revenue of 56.5 billion euros in the first nine months of 2022, up 28% compared to the same period last year.
Meanwhile, its wine and spirits division reported a revenue of 5.2 billion euros in the first nine months of this year, up 23% from the same time last year. The company attributed the growth partly to an increased pressure on supply and surge in demandspecifically in Europe, the U.S., and Japan.
Moet Hennessey said it extended its global portfolio by acquiring Joseph Phelps vineyard in Napa Valley, California. And the company raised prices to outweigh the effects of logistical disruptions.
And its not the only luxury brand to see increases in revenue. In Mondays research note, Bank of America said luxury revenue growth remained solid in the third quarter with almost all companies beating market expectations.
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