A tribute to a great-grandfather

SirDavis excels at several things at once. It is the first Moët Hennessy spirits brand to be developed and produced exclusively in the U.S., marking an effort by the LVMH division to expand in the local liquor market. At the same time, it is not just another celebrity product. In particular, it is a personal project of Beyoncé, through which she has paid tribute to her great-grandfather, Davis Hogue, after whom the distillate is named. The latter was a so-called moonshiner in the days of Prohibition, who hid bottles of illegal whiskey in trees for his loved ones. The singer herself is a lover of fine whisky, especially Japanese whisky. SirDavis combines traditional techniques with sherry cask ageing, combining the characteristics of American, Scotch and Japanese whiskies.

Heritage throughout the product

The artistic soul of Beyoncé shines through not only in the taste, but in the bottle design. In addition, the symbolism and her strong ties to her Texas roots are reflected throughout the product. The brand is headquartered in Houston, Texas, and the alcohol is also mixed and bottled there. The spelling also sets the product apart from other American whiskeys. Instead of the classic "whiskey," the singer opted for the Scottish and Japanese versions of " whisky." SirDavis is available for pre-sale directly on the website, and will be available from 4 September at airports in New York, Los Angeles and San Francisco,

and in stores in America, London, Paris and Tokyo, priced at $89 (€80).

Award-winning even before launch

The meticulous attention to detail and overall creation is reflected in the awards. Prior to its official launch, SirDavis whisky was anonymously entered into various major competitions, where it outperformed more than 100 other whiskies entered. It won Best In Class American whisky at the 2023 SIP Awards and was awarded a gold medal at the 2023 New York International Spirits Competition. In

turn, it scored highly at the 2023 Ultimate Spirits Challenge.

Collaborations with artists as an advertising move

In addition to Beyoncé, her husband, rapper Jay-Z, also has collaborated with LVMH or Moët Hennessy. The company owns 50 % in the musician's company Armand de Brignac as of 2021. The brand, which is also known as Ace of Spades, focuses on the production of champagne. With the intention of increasing its global appeal, LVMH has also established collaborations with other artists. Singer Jackson Wang has been the face of Hennessy's brand campaign, while singer Alicia Keys has been featured in a series of films for Hennessy Paradis cognac, along with composer Lang Lang. Meanwhile, Moët & Chandon paid tribute to tennis star Roger Federer with its 'Greatness since 1998' edition of the champagne, with all profits from sales donated to his Foundation. Also notable are Dom Pérignon's brand partnership with Lady Gaga and a campaign for Polish premium vodka Belvedere with Daniel Craig.

The whole group saw a drop in sales

The economic results of the spirits and wine division and the entire LVMH Group for the first half of this year were by no means "stellar". Group revenues were down 1 percent year-on-year to €41.68 billion, while the division's sales were down 12 % to €2.81 million compared to the same period last year, with profits falling to €777 million. Breaking this down, €1.4 million came from sales of champagne and wine and the remaining €1.41 million came from sales of cognacs and spirits. The group cites the stabilisation of the market after the sharp increase brought about by the end of the pandemic as the reason for the decline. More prudent management, stock reductions and changes in exchange rates have also contributed. However, the collaboration with Beyoncé confirms the outlook of the company, which wants to focus on strengthening the division in the global market.

Shares have been rising for a long time

Although the French company has seen a drop in sales, its shares are still interesting for investors. Looking at the chart for the last 5 years, we can see that LVMH's stock market value reached a high on April 21, 2023 when it traded at over €900 per share. In comparison, during 21 August 2024 the value was at €680 per share, representing a year-on-year decline of 13 %. However, the stock's five-year performance is still in green numbers. The company's stock market value has gained more than 90 % over this period. Thus, in the long term, it is in an uptrend, despite short-term corrections.*

LVMH's share performance over the last 5 years (source: Trading Economics)*

The outlook is positive

LVMH is not the only one that benefits from collaborations with famous people. Many alcohol brands are partnering with celebrities to increase their visibility and sales, but only time will tell if LVMH's collaboration with Beyoncé will help boost profits for the wine and spirits division in the US market. But history has shown that the alcohol and celebrity connection works in business, so we can expect rather positive sales developments, which would mean good news for both parties involved. Indeed, LVMH has had a rather challenging time, as Dior, which is part of the conglomerate, is facing legal action and during the investigation it was discovered that the brand was paying as little as $57 per piece to produce handbags, with retail prices reaching four figures.

Olívia Lacenová, principal analyst at Wonderinterest Trading Ltd.

* Past performance is no guarantee of future results.