Facing Battles: Henkell Freixenet's Worries Over US Tariffs, Climate Change, and More
US tariffs pose a potential threat to Henkell Freixenet, as the champagne producer may face significant financial implications. - US Tariffspose a Threat to Henkell Freixenet's Champagne Sales
Sektkellerei Henkell Freixenet navigates a tricky landscape, buffeted by US tariffs, climate change, and war's aftermath. "Brace yourself for a bumpy market in 2025," warns CEO Andreas Brokemper, citing ongoing geopolitical strife, economic instability, and altered consumer sentiment as the main culprits.
Back on the right track
The German-Spanish conglomerate, based in Wiesbaden and Catalonia, claims the top spot in global sparkling wine sales and revenue. In 2024, revenues soared by 1.5%, hitting €1.248 billion. When considering the sparkling wine and spirits tax, this translates to a 1.0% increase to €1.493 billion. This profit-making powerhouse, a subsidiary of Geschwister Oetker Beteiligungen KG, tends to keep its financials under wraps, but it's back in the black.
Anxiety over Trump's trade policies
Brokemper expresses unease over the erratic trade policies of former US President Donald Trump. Presently, sparkling wine tariffs rest at 10%, but Trump has threaten Europe with crippling 200% tariffs. "It'll be like Prohibition," says the CEO, echoing the era's alcohol ban in the US.
This tariff worry extends to the production of Cava in Spain's northeast. The region has suffered from drought in recent years, impacting business significantly. The 2023 grape harvest was devastating, followed by a marginal 2024 improvement, forcing Cava prices upward. The 2025 forecast remains shrouded in uncertainty.
Climate change: boon or bane?
Climate change presents a double-edged sword: challenged by the drought in traditional viticulture areas and offered opportunities with the northward shift in vineyard cultivation. In 2022, the company acquired the Bolney Wine Estate in Brighton, England, to produce small-scale sparkling wines.
Non-alcoholic drinks: the future?
The non-alcoholic segment represents a tiny sliver of the overall market, yet it's a key growth driver for Henkell Freixenet. The health focus and consumption preferences of younger generations have catapulted this sector into the limelight. To stay competitive, the company is mirroring its popular brands in the non-alcoholic space, using blue necklaces to indicate zero alcohol content.
In 2023, Henkell Freixenet posted modest growth in Western Europe, stronger gains in Eastern Europe and the Americas, yet sluggish performance in Germany, Austria, Switzerland, and Asia. Employee count contracted by 2.4%, down to 3,535.
- Sparkling wine
- Climate change
- Wiesbaden
- Schaumwein
- Donald Trump
- Drinks
- Katalonien
- Spirits
- Non-alcoholic beverages
- Geschwister
- The German-Spanish conglomerate, Henkell Freixenet, specializes in the production of sparkling wine and spirits.
- CEO Andreas Brokemper expresses concern over the impact of climate change on traditional viticulture areas, citing recent droughts as significant challenges.
- The company's headquarters are in Wiesbaden, and they also have a presence in Catalonia.
- Former US President Donald Trump's unpredictable trade policies have caused apprehension, with tariffs on sparkling wine currently at 10%, but threats of crippling 200% tariffs loom.
- Henkell Freixenet's investment in the non-alcoholic beverage sector is a key growth driver, as the focus on health and consumption preferences of younger generations propel this sector.
- The company acquired the Bolney Wine Estate in Brighton, England, in 2022, to start producing small-scale sparkling wines and capitalize on the northward shift in vineyard cultivation due to climate change.
