It looks like LVMH is seeking Queen Bey's help to increase weak sales.
Beyoncé Knowles-Carter and Moët Hennessy, an LVMH (LVMUY) brand, have joined forces to launch a new American whisky line called SirDavis amidst declining sales in the company's liquor segment.
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According to LVMH's first-half financial report for 2024, its wine and spirits revenue is down by 12% year over year, the largest decline among all its sectors.
Compared to last year's financial report, the company's overall revenue is down by 1%, and the net profit decreased by 15%.
LVMH's stock is down by approximately 10.3% compared to last year.
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As reported, 35% of the company's wine and spirits consumer demand comes from the U.S., making it its biggest market by region. The U.S. also generates 25% of the company's total revenue, making it its second most profitable market.
As explained in LVMH's financial statement, consumer demand in the U.S. was lower than the previous year, causing a drastic decline in sales.
LVMH plans to focus on its strongest regional markets to increase revenue for the upcoming year. This strategic partnership seems to be a way for the company to further appeal to the American market by using Beyoncé's prominent position as a top influential woman and music icon.
The American singer, songwriter, and businesswoman is one of the 21st-century's most prominent women, with a net worth of approximately $760 million.
However, this is not the first time LVMH has partnered with a Carter. The company also had a strong brand activation in the 2024 Paris Olympics and previously bought 50% of the champagne brand Armand de Brignac from Beyoncé's husband, Jay-Z.
The spirits industry thrives off the U.S. market
The U.S. is a profitable regional market for the spirits industry; its market size was estimated at 216.62 billion in 2023 and is expected to grow by 6.3% from 2024 to 2030.
According to the Distilled Spirits Council American Whisky 2023 report, more than 31 million 9-liter cases of American whisky were sold in the U.S. in 2023 alone, generating revenue of $5.3 billion.
American whisky was among the top three highest-revenue liquors in the U.S. in 2023, growing by 4.1% in revenue compared to last year, as reported in the same study.
While the U.S. is a popular market for whisky, luxury brand shipments declined by 9% in 2023 compared to the year prior, as reported by the DISCUS Luxury Brand Index.
LVMH is known for owning some of the most renowned and luxurious brands in the wine and spirits sector, and this decline in the demand for higher-end spirits is reflected in its decreasing spirit sales in the U.S.
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The company is taking its regional market approach seriously by making SirDavis the first in Moët Hennessy's history to be a fully American product since the whisky is crafted and bottled in Texas, Beyoncé's home state, and headquartered in Houston, the singer's birth city.
"SirDavis is not only a revelatory and exceptional American Whisky, which we are very proud of. It is also a testament of the unwavering dedication to craftsmanship, heritage and innovation shared by LVMH and Beyoncé Knowles-Carter," said CEO of LVMH Bernard Arnault in a press release.
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