Bernard Arnault, a French business person, is now estimated to be the world’s richest guy according to the Forbes ranking. He has actually overtaken Elon Musk as a result of the significant drop in the Tesla share price and the strong efficiency of LVMH. Arnault’s net worth is approximated at $180 billion. That is $33 bn more than Musk’s. Arnault’s fortune is based upon his stake in the French high-end corporation LVMH (Louis Vuitton Moët Hennessy, or, more often, Moët Hennessy Louis Vuitton). It consists of style, luxury bags and accessories, fragrance and cosmetics, jewellery, and likewise wine and spirits.
Moet & & Chandon in golden letters on the fence outside the offices in Epernay, Champagne, copyright … [+]
BKWine Photography
The LVMH brand list checks out like a catalogue of the world’s leading luxury products, Louis Vuitton, Christian Dior, Givenchy, Kenzo and others in style, costing an overall of EUR31 bn. Fragrances and cosmetics, consisting of Guerlain, Acqua di Parma and the style brand names’ fragrance derivatives as well as much more, selling EUR6.7 bn. Bulgari, Tiffany & & Co, Tag Heuer, Fred and others in watches and jewellery, with EUR9 bn. They own a number of retail outlets like Sephora, La Grande Epicerie/Le Bon Marché, Starboard Cruise Providers etc, with sales of EUR11.8 bn. And lastly, white wines and spirits, which are primarily champagnes and cognac, selling EUR6 bn. They call their brand names “homes”. (Numbers from 2021, according to the LVMH site.) The total turnover of the group was EUR64.2 billion in 2021. There’s also an “others” group of brand names that consists of a number of media, a yacht contractor, hotels etc ($1=EUR0.93, EUR1=$1.07) The most important part of the empire is Louis Vuitton that, according to The Financial expert, represents EUR20 billion turnover, a 3rd of the overall, with an operating margin of practically 50%.
The Chateau d’Yquem in Sauternes, Bordeaux, copyright BKWine Photography
BKWine Photography
However how much is $180 billion? It’s tough to make it concrete. It’s a quantity that makes shopping unimportant. What does it matter what a new suit or a cars and truck expenses? A brand-new home? Not obvious. Even a super-luxury apartment in Paris of 600 m2 (6000 sqft) neighbouring the Eiffel Tower is not even spending money, presently on the market for EUR40 million (and he doesn’t truly need it, he already owns a home of 2000 m2/4000 sqft a stone’s get rid of). One of the world’s most expensive super-yachts is Abramovich’s the Eclipse, estimated by Architectural Digest to have a cost of $1.5 bn– less than one percent of Arnault’s net worth.
More comparable in size, perhaps: $180 bn is simply a little less than the GDP of Ukraine (as it was prior to the war) or a touch more than Hungary’s. Or simply under the marketplace capitalisation of McDonald’s or Nike. Or, since we were discussing purchasing a car, it’s more than twice the market cap of Mercedes Benz Group AG.
However we’re here for the white wine.
Offered the name of the group, LVMH, one might think that wine (M for Moët) and spirits (H for Hennessy) would make up a big part of the group, but that’s not the case. It represents less than ten per cent of revenues, as you can see from the above breakdown. But the group is still extremely dominant in each of the beverages markets. The information are not always public, however there are different price quotes.
Hennessy Cognac represents 46 % of all sales of cognac measured in volume (2019 ), the brandy from the south-west of France. This most likely indicates at least EUR2 bn of sales today for Hennessy. There are some 270 cognac manufacturers, however Hennessy is the biggest. Half of all cognac produced is really sold in the USA.
The closed gates at the Champagne Krug winery in Reims, copyright BKWine Photography
BKWine Photography
In champagne, LVMH is not quite as dominant. However practically. A number of years back, the then recently selected head of the LVMH drinks service, Philippe Schaus, informed me that a rough quote is that the group meant a quarter of all champagne produced determined in volume, however a 3rd of all champagne if measured in value. The average price of an LVMH champagne is clearly greater than the average one produced.
The biggest champagne manufacturer of all is Moët & & Chandon, which is owned by LVMH. It is estimated to make around 30 million bottles, which may be an underestimate. That would be around 10% of the overall production in the region of 300 million bottles. Moët used to have a status cuvée called Dom Pérignon. That has given that a couple of years back, been profiled as a different brand, independent from Moët, by LVMH and is estimated to make 5 million bottles each year. However the second biggest champagne brand in the LVMH stable is Veuve Clicquot, famous for its orange-coloured label, with production approximated to be around 12 million bottles. Other champagne brands in the LVMH portfolio include Krug, Ruinart and Mercier. A back-of-of-the-envelope estimation points to a total champagne turnover of possibly 1.5-2 billion euro for LVMH.The Domaine Chandon winery and vineyards in Ningxia in the Gobi Desert in China, copyright BKWine … [+] Photography BKWine Photography LVMH also owns some wineries in other red wine areas. Curiously, their wine holdings are mainly beyond France. Chandon makes sparkling wines on 3 different continents.
Cape Mentelle in Australia, Cloudy Bay, one of the most popular New Zealand wineries, Joseph Phelps in Napa Valley recently got, Terrazas de Los Andes as well as Cheval des Andes in Argentina, and others. In France, they own some of the most well-known estates, producing small quantities of really special luxury white wines, more luxury brand names than red wines actually: Château Cheval-Blanc and Château d’Yquem in Bordeaux, Clos des Lambrays in Burgundy and a couple of others. But these properties outside of Cognac and Champagne are small in contrast. It is a pity that– obviously– Arnault is not particularly fond of drinking white wine, given the wonderfully well-known brands in his portfolio. So when you popped the cork on one of those champagne bottles, from the list of names above, at New Year or your celebration, you contributed your money to keeping the world’s most affluent guy in the leading spot. He will value it.
— Per Karlsson