Distell Group Limited, South Africa’s leading producer of spirits, wines and ready-to-drinks, has made its first fully-fledged international acquisition with the purchase from Pernod Ricard of renowned heritage brand Bisquit, a top name in cognac.
The €31 million (approximately R390 m) deal gives Distell, the world’s fourth biggest brandy producer, the Bisquit trademark, the inventories of Bisquit’s finished cognac, as well as stocks of eau-de-vie (cognac distillate) currently in maturation. However, neither Bisquit’s Lignières castle nor its Rouillacais vines in Cognac, is included in the purchase.
Bisquit is a brand with an almost 200-year history, steeped in family tradition. Founded in 1819 by cognac pioneer Alexandre Bisquit, it remained in the Bisquit family for nearly 150 years. Through the efforts of Maurice Laporte-Bisquit it evolved into an internationally known brand, owned and managed by the Bisquit family until its purchase in 1966 by Pernod Ricard, who has since grown Bisquit into one of the world’s foremost cognac brands.
Today it holds a strong presence in parts of both Western and Eastern Europe with a support base in China as well as in international travel retail.
A market leader in Belgium, Bisquit also enjoys a loyal following in Luxembourg, Switzerland, Russia, France and Germany. It offers an entry-level Bisquit Classique VS, the Bisquit VSOP Fine Champagne and the ultra-luxury Bisquit XO Excellence, with prices ranging from €17 to €100 (R215 to R1 250) a 750ml bottle to cater to a range of income groups.
The disposal of the brand is part of Pernod Ricard’s non-strategic asset disposal plan, communicated after the Vin & Spirit acquisition.
As the first wholly-owned Distell brand to be produced outside Africa, the transaction takes Distell further into the mainstream international spirits market. It follows on the company’s joint venture established two years ago with Burn Stewart Distillers, a Scotch whisky producer, in which the two parties as equal partners own and market in sub-Saharan Africa, three whiskies – Bunnahabhain, Black Bottle and Scottish Leader. Distell’s flagship Amarula Cream Liqueur is already South Africa’s most widely distributed alcoholic brand, sold in over 100 countries.
Says Distell MD Jan Scannell: “The deal not only augments our spirits stable with a highly respected international brand, but gives us access to Bisquit’s existing customer base in Europe and Asia for other Distell offerings across our spirits, wine and RTD portfolio. At the same time, it enhances our range of brandies that already includes several internationally acclaimed Cape potstills and brings us long-established traditional cognac expertise.”
He confirmed that the deal had been structured to ensure seamless production continuity for the brand. Moreover, to avoid any disruption of supply, Bisquit’s current distribution arrangements would remain in place for a transition period. In France, Belgium, Switzerland and Luxembourg, Distell has signed a distribution agreement with Pernod Ricard affiliates.
Scannell noted that while the South African spirits market had recently been under pressure given the impact of the global credit crisis, Distell had increased its share of the segment. “The economic situation notwithstanding, premiumisation is continuing across all alcoholic beverage categories. A sought-after name in cognac such as Bisquit allows us to capitalise on the growing South African appreciation for luxury spirits and still further consolidate our position in the local market.”
He said that although there had been a very recent decline in sales of cognac to developed countries because of depressed economic conditions, demand for well-known cognacs had increased substantially in the BRIC countries.
Cognacs accounts for 8,6% of brandy volumes sold worldwide in 2007, and command a higher price than any other type of brandy. The growth of cognacs has outpaced that of any other spirit this decade. In the US, a growing African-American connoisseurship has contributed to cognacs’s compound annual growth rate of close on 4% between 2000 and 2007. In Eastern Europe growth was 18% during this time, and in Asia, the compound annual growth rate between 2004 and 2007 was 16%.
Scannell added: “We are enormously excited by the potential of Bisquit and are very proud to include a brand of such stature in the Distell portfolio. While we believe it will still be possible to maximize opportunities during the current downturn, when the global market recovers we shall be extremely well placed to take advantage of the resurgence in demand for prestige brands with impressive provenance.”
ISSUED BY: DKC (DE KOCK COMMUNICATIONS)