Cognac and brandy brands to watch in 2022

Producers of Cognac and brandy see a bright future for their spirits thanks to resilient demand and the potential for innovation. We look at three brands in the vanguard of the category.

Though the pandemic shook the Cognac category in 2020, it is making a speedy recovery. Trade body the Bureau National Interprofessionnel du Cognac (BNIC) reports that its shipment figures have increased by 22.7% in the year to 31 October 2021 compared with the previous period, reaching 226 million bottles; its turnover grew by €3.6 billion (US$4.98bn) during that same time.

“Those figures show how stable our main markets – the United States and China mainly – are, and it also shows new consumption habits,” says Raphaël Delpech, BNIC general director. “During the pandemic, bars, restaurants and nightclubs closed but online sales boomed, and are still important today.”

In March, producers welcomed the five‐year suspension of tariffs between the EU and US, which lifted the 25% duty slapped on certain Cognacs and brandies. “Of course we are happy about it, but we want to see this dispute to be definitively settled so that it no longer takes our sector hostage,” Delpech says. The US is Cognac’s top market, and demand there is now “stronger than ever” due to the development of cocktail culture and the trend towards premium products.

Consumer interest in China, the second-biggest market for Cognac, has risen, thanks to heightened appreciation for food-and-spirits pairings.

Big‐name brands have also reported impressive gains this year. Rémy Martin owner Rémy Cointreau posted a 27% increase in Cognac sales in the first half of 2021, compared with the same period in 2019; LVMH‐owned Hennessy Cognac registered a 6% rise in volume on pre‐pandemic figures, though limited by supply constraints.

With numbers back on track, Cognac producers are eyeing future growth. Market analysis firm Technavio forecasts a 2% compound annual growth rate (CAGR) for Cognac until 2025, and the BNIC has set its own targets. “Today we ship [about] 230m bottles, and by 2035, we plan to ship 350m bottles per year,” Delpech reveals. In November, to support these goals, Cognac producers requested to increase the vineyard size in the appellation by 3,129 hectares.

Meanwhile, brandy still faces an image problem as a “dusty old drinks category”, says Avallen Calvados co‐founder Stephanie Jordan. However, some producers in this varied category are headed in a more innovative direction and gaining traction.

La Martiniquaise‐Bardinet tapped into the trend for flavoured spirits with a coffee-infused Bardinet brandy this year, the first in a new range; Seven Tails, a unique blend of Cognac, Armagnac and other French brandies, continued its growth; and sustainability‐focused Avallen entered the French market.

Jordan believes the category has plenty of opportunity to pique consumer interest in the years ahead. “Brandy responds to sustainability credentials, clear geography and provenance that citizens are now increasingly looking for,” she says. “I’m excited by the future of brandy. I expect the category to see growth and develop with more varieties of base fruits used to create fresher, vibrant, more mixable liquids.”

Read the full article.