Belvédère release strategy for wine and spirits group to 2018

By Caroline Sargent |

Wine and spirits group Belvédère has announced its new strategic plan for 2015–2018 with the moniker ‘Back in the Game 2018’ or BiG 2018.

 

Featuring five principal areas of focus, the plan is described by the company as ‘ambitious’ and ‘a new chapter in its history’ after a year of operational fine-tuning under the governance of CEO Jean-Noël Reynaud.

 

The company has also indicated its commitment to releasing future financial statements based on volumes sold rather than volumes produced, thereby giving a clearer picture of Belvédère group revenue, wealth and year-on-year progress.

 

TARGETS FOR 2018: EBITDA margin of 12%-15% & core business growth of 25%-35%

Based on 2014 estimates for net sales of around €455 million and ‘slightly positive’ EBITDA, Belvédère is expecting sales of between €420 million and €460 million (growth of 25% – 35% for core activities) by 2018.

 

UNIQUE POSITIONING: a challenger at the heart of the wines and spirits market

Positioned on the ‘value’ and ‘standard’ segments which, according to Belvédère, are the largest segments that contribute the most to total market growth in France, Poland and the United States, the company states its unique positioning having a brand portfolio that reflects current consumer trends i.e. cocktails, women, value for money and sophisticated flavours.

 

Backed by these assets, Belvédère says it intends to accentuate its multi-regional strategy and wants to deliver value by providing its customers and consumers with trustworthy, bold and flavourful brands.

 

OPERATIONAL AREAS: Rationalization, optimisation, growth

The company declares its intentions to sell off ‘non-strategic and operational loss-making assets’, essentially wholesale and retail activities in Poland, superfluous production equipment in Poland and real-estate assets in both Poland and France.

 

These divestments should result in a sales decrease of €120 million, an increase in EBITDA of around €10 million and an expected value of over €20 million, according to the strategy report.

 

In terms of optimising current operations, the plan lists five key projects, namely the upgrading of its industrial footprint for production and logistics; a reduction in direct purchasing costs; a strengthening of the company’s route to market, including renewed focus on priority states in the US and a reorganisation of export activities; streamlining the business and number of skus; and developing category and revenue growth management, through process improvement and sales planning.

 

Belvédère expects these changes to generate an additional €20 to €30 million in EBITDA each year from 2018.

 

STRATEGIC PILLARS: Vodka, William Peel, Marie Brizard, Fruits & Wine

A growth in business is to be underpinned by the company’s four key brands: Sobieski vodka – for which the group is anticipating annual average growth of around 14% by volume between 2014 and 2018; William Peel – currently the leading scotch whisky brand on the French market for which the group intends to record annual average growth of 4% by volume between 2014 and 2018; Marie Brizard liqueurs – expected to achieve average annual growth of 7% by volume by 2018; and the Fruits & Wine brand – the French leader in the fruit flavoured wine market – expected to achieve annual average growth of around 12% by volume in the same period.

 

KEY MARKETS: France, Poland/Baltic states, United States, Spain, Brazil

The strategy also outlines development plans for the group’s five key market, which can be summarised thus:

 

France: to strengthen the #3 position by keeping growth momentum

 

Poland: to move from being a vodka specialist to a global wines and spirits player

 

United States: to focus on profitable and sustainable turnaround

 

Spain: to disrupt and innovate within the market

 

Brazil: to accelerate growth through vodka and the Scotch whisky brand

 

Jean-Noël Reynaud, CEO of Belvédère, comments, “We are very pleased to be able to present this new strategic plan to our employees, our shareholders and all our partners. This will see Belvédère increase its agility and establish itself as a challenger at the heart of the wines and spirits market.

 

“I would like to thank all the Belvédère teams who have accomplished outstanding work and enabled us to present this new strategic plan before the end of 2014, as promised. We will start the 2015 financial year with clear objectives and a detailed roadmap. A new chapter is beginning, and we are enthusiastic and eager to work towards Belvédère’s success.”

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