LVMH and Formula 1 announced, via a joint press release, that the luxury conglomerate has become a Global Partner of Formula 1. The 10-year agreement will take effect in 2025. The amount the world's leading luxury brand will invest in the deal was not disclosed, but industry insiders estimate a total investment of up to $1bn over the decade. For the last three years, the winning drivers have celebrated their victory with sparkling wine from Ferrari Trento. Prior to that, the bubbles were supplied by Pernod Ricard's Mumm Cordon Rouge for 15 years but, historically, the brand most closely associated with F1 was LVMH's Moët & Chandon.
The new partnership will kick off with the start of the next racing season in March 2025. Several of LVMH's well-known brands are involved, including Louis Vuitton, Moët Hennessy, and TAG Heuer. The goal is to bring together the best of both worlds, leveraging the values of the LVMH group—creativity and excellence—and those of F1—innovation and peak performance, according to the official statement.
Formula 1 values: innovation, team spirit, performance
Frédéric Arnault, CEO of LVMH, summarized the goal as follows: “In recent years, Formula 1 has truly become one of the most desirable sports in the world. It's a vibrant discipline that echoes a number of values that are very important to us, such as innovation, team spirit and performance. For many years, several of our brands - Maisons - have also chosen to invest in Formula 1, whether to create unique experiences or for moments of celebration. With our Maisons and the expertise of our Group, we want to further grow this experiential dimension that Formula 1 provides all over the world. We are only at the very beginning of this partnership, but the seasons that await us promise to be extraordinary."
F's major shareholder, Liberty Media, a U.S. company, announced back in 2017 that it aimed to bring more companies on board as official partners of Formula 1 in the coming years. Stefano Domenicali, President and CEO of F1, explained why LVMH was selected: "Our sport is founded on the relentless pursuit of excellence, a value that also lies at the heart of LVMH, so I am delighted to announce this historic partnership will begin in 2025. As F1 continues its global growth, attracting new and more diverse audiences, the strength and breadth of LVMH makes it the perfect partner for us."
Global partner as the highest sponsorship category
In F1, sponsors are divided into four categories: Global Partners, Official Partners, Regional Partners, and Official Suppliers. Global Partners are often leading companies in their respective industries, with the financial capacity and willingness to commit long-term. Currently, these include companies like Heineken, MSC Cruises, Pirelli, and Qatar Airways. Looking at the numbers, LVMH can easily afford top-tier sponsorship. In 2023, the company achieved revenue of over €86.2bn and a net profit of more than €15bn.
LVMH promises, among other things, "tailor-made actions" and "limited editions" but has not disclosed any details. These are expected to be revealed at the beginning of 2025, leading to speculation in the media. The assumption is that TAG Heuer might replace Rolex as the official timekeeper, and Moët & Chandon could once again make its way to the winners' podium, replacing the Italian brand Ferrari.
According to the annual ranking by Brand Finance, Moët & Chandon remains the strongest wine and champagne brand in 2024, with a market value of around $1.3 bn (€1.25bn). Nevertheless, LVMH's wine and spirits division saw an organic revenue decline of 4% in 2023 compared to the previous year, as reported by the German wine trade magazine Weinwirtschaft. Although the champagne business grew, it did not perform well in the weakening U.S. market. This might be one of the reasons behind the deal with the pinnacle of motorsport.
In 2025, F1 will mark its 75th anniversary. At the inaugural race in 1950, champagne was awarded on the podium for the first time, with Moët & Chandon being the chosen brand. RW
