Barrel-aged secrets
The Rémy Martin mystique
Good morning, spirits savants. This is your Stock Market Rundown for February 2nd, 2024. Thanks for reading. Let’s dig in:
TODAY’S TOP STORY: DECANTING TRADITION
Family ownership is the success secret of billion-dollar European luxury companies. When something’s bequeathed to you by your ancestors, you just treat it that much better. Think about the difference between driving a rental car from Avis, versus driving the perfectly-restored hot rod your grandfather left you in his will.
Example: Remy Martin, makers of the most prestigious brand of French cognac. Founded in 1724, the business remains family-controlled today, despite now being owned by publicly-traded conglomerate Remy Cointreau.
To make cognac, wine from the picturesque region of Cognac, France is distilled, then aged in oak barrels. This process doesn’t just develop the complexity of the spirit—it creates a barrier to entry for competitors.
Fine cognac is aged for four to twelve years, and the highest-end bottles may be aged for decades. So, you can’t exactly start a cognac business overnight. (If you’re looking for a quick startup in the liquor industry, try vodka—no aging required.)
Adding to the luxury allure, cognac bottles are often lavish and opulent. Remy Martin’s Louis XIII is sold in a Baccarat crystal decanter—appropriate, for a product that costs $4,000 per bottle.
Remy Cointreau’s stock popped recently on quarterly results that beat expectations. But China, the second-biggest market for cognac, was a weak spot, with demand hit by an economic slowdown. Cognac has long been an elite status symbol in China, thanks to its old-world prestige and hefty price.
I’m sure when the founders of Remy Martin got started 300 years ago, they never could have imagined that one of their biggest annual selling periods would be Chinese New Year.
SO WHAT ELSE IS GOING ON?
Most people get upset when their ex stops viewing their Instagram stories. Meanwhile, poor Jeff Bezos has to deal with his ex selling billions of dollars’ worth of Amazon stock. Think they stayed friends?
Comcast’s quarterly revenue beat estimates, partly thanks to a Chiefs-Dolphins game being broadcast on the company’s streaming service, Peacock. Comcast shelled out $110 million to the NFL to get exclusive rights. Next they’ll be charging us extra for the coin toss and halftime show.
If you’re in a Macy’s anytime soon, good luck locating an employee to help you find your size. The department-store chain is laying off thousands of workers.
Spice maker McCormick expects their profits to be a bit bland this year, as consumers are opting for cheaper private-label versions. Paying up for the McCormick brand name is worth it. With those store-brand seasonings, how do you know they didn’t just sweep the floor of the grocery store and label it “oregano”?
That’s me signing off for the week, friends. Let's meet again first thing Monday morning for more of the same. Yours in capitalism, The Axe