Exceptional headiness for Chinese youth

Remy Martin CEO Philippe Farnier seeks to bring the cognac brand closer to millennials

He might hold the reins to one of the world's most renowned cognac brands, but CEO of the House of Remy Martin, Philippe Farnier, doesn't view himself as the highest-ranking, most powerful executive of the company.

If anything, he sees himself as a guardian of the French luxury brand－a protector of its legacy.

"My first duty to the brand is to take care of the heritage that has been handed to me by the family. I have to make sure that the next four or five generations will be able to offer the same product and experience to the customers," said Farnier, who was in Shanghai in September as part of his visit to China to meet local stakeholders and partners.

Like other forward-thinking CEOs of today, Farnier doesn't harp on shareholder interests or profit margins. On the topic of the brand's business strategy in China, Farnier shared that the company is not focused on sales volume but providing ways that consumers, particularly those from the younger generation, can experience the brand.

"If you want your brand to stay alive you will need to attract the younger generation," he said.

"The young generation today are looking for authenticity, craftsmanship, and are eager to know where a product is from. And we at Rémy Martin are willing to provide them an exceptional experience as such."

This is not the first time the brand has expressed its intention to tap into the spending power of the younger demographic. Former Rémy Martin CEO Eric Vallat once cited those in their twenties and early thirties as the brand's target audience. The company has also in recent years been launching pop-up stores in major Chinese cities.

One of these experiences, Farnier suggested, could be introducing cognac to young consumers by way of mixology. He noted that most cognac drinkers in China prefer the brand's high-end products such as Remy Martin XO and would drink this liquor neat. In contrast, most consumers in the United States learn about cognac through cocktails.

With regard to his expectations of the brand's success in China, Farnier said that he was optimistic of growth in the coming years, citing how imported spirits currently only account for about 2 percent of overall alcohol beverage consumption in the country.

He noted that the brand's first boutique in Beijing, which is dedicated to selling the Louis XIII cognac, has been delivering exceptional results since it opened in 2016.

"China is one of the most, if not the most, important markets for us. Even though cognac only accounts for a tiny fraction of the market here, the penetration rate is the highest," he said.

"We have just scratched the surface of the Chinese market. We still have lots of new clients to get in touch with here."

Farnier is no stranger to the luxury industry, having spent most of his career working in major companies such as Yves Saint Laurent, LVMH and Christian Dior. Before he took on the role of CEO of the House of Remy Martin last year, he was the head of the Americas for Remy Cointreau, Remy Martin's parent company.

To him, the definition of luxury revolves around "a quest for the exceptional", both in terms of product quality and sustainability.

The Frenchman pointed out that one of the first things he did after becoming CEO was to reinforce the company's three core values－terroir, people and time－all of which are linked to sustainability.

With regard to terroir, the company has over the years been helping and encouraging their winegrowers to adopt sustainable measures in their vineyards. He explained that protecting the land is of paramount importance, especially to a brand like Remy Martin, which uses grapes that cannot be found anywhere else in the world except for France's Cognac region.

"We have engaged more than 90 percent of the 800 winegrowers we work with to improve the way they carry out their agricultural practices. Of this group of people, 40 percent have received their High Environmental Value certifications. We are quite proud of this," he said.

"Within the Cognac region, Remy Martin is currently the No 1 brand when it comes to protecting the terroir. But things can still be improved－I want 100 percent of our winegrowers to be HVE (haute valeur environnementale)-certified."

Farnier said "pillar of time" in the company parlance refers to the brand's emphasis on the patience required to cultivate exceptional spirits. This in turn means being sustainable and not overworking the precious land that is used to grow Remy Martin's coveted grapes.

Farnier pointed out that Tercet, the latest addition to the company's portfolio, is a perfect example of this value as it took a decade to craft.

"Fast-moving brands need to launch new products often to make money. But this is not our vision. We want to make our current product the best it can be," he said.

"Of course, we'll keep abreast of the changes and trends in the market, but we aren't in the business of innovating for the sake of innovating," he said. "We will only introduce a new product when we know it is special."

Farnier said he is a nature-lover who often skis, sails and hikes, suggesting a possible link to this passion for sustainability. "I've got three kids. I want them to inherit a better world. This is why, sustainability is so important.

"Remy Martin has been around for almost 300 years and we want to be around for many more years. Looking forward, reducing our carbon footprint and being sustainable would be pivotal in achieving this.

"When you work for Remy Martin, it's not about you－it's about ensuring the continuance of the brand."