Cognac’s Fortunes Rise In U.S., As Asia SlowsOctober 18, 2013
Cognac’s popularity in Asia had been on such a steep upward curve in recent years that some analysts were predicting a supply shortage for the U.S. But with Cognac shipments to Asia now slowing significantly, the U.S. is reaffirming its status as the category’s most important market.
According to Impact Databank, U.S. Cognac depletions rose 2.9% to 3.6 million cases 2012, and the pace has picked up so far this year, with North American shipments jumping 10% in the 12 months through July. During that period, Cognac shipments to Asia were up 9%, but that’s a significant deceleration from the period of 2009-2012, when exports to China alone more than doubled to 1.9 million cases.
In the U.S., category leader Hennessy was up 3.5% to 2.2 million cases last year, and has continued to rise in 2013. Rodney Williams, senior vice president of Hennessy USA, says the brand’s “Wild Rabbit” campaign—part of a $17 million U.S. media spend in 2012—has bolstered its connection with a “young adult target audience” and will be extended into 2014. Meanwhile, in August, Hennessy burnished its luxury credentials with the U.S. launch of its Paradis Imperial Cognac, made from a blend of 30- to 130-year-old eaux-de-vie and priced at $2,700 a bottle.
Second-ranked U.S. player Rémy Martin has also been on the move, increasing 6.7% to 635,000 cases in 2012 and maintaining strong momentum so far this year. Rémy Martin has received a boost from its first-ever U.S. TV ads, as well as its Rémy Martin V offshoot ($40), a clear offering that targets white spirits drinkers within the super-premium segment.
Beam-owned Courvoisier slipped 1.2% to 415,000 cases in the U.S. in 2012, a year after jumping 11%. “We’ve been focusing on growing Courvoisier by bringing the brand to new consumers and new occasions with our innovations,” explains Beam senior global marketing director Michael Cockram, citing the launch of Courvoisier Rose (a blend of Courvoisier and red wine grapes) in 2011, as well as C by Courvoisier (a double barrel-aged expression) and Courvoisier Gold (a Courvoisier and Moscato blend) in 2012. The three newcomers are accessibly priced for Cognac, at $24.99-$34.99 a bottle. Beam’s Cognac stable also includes Salignac, which rose 3% to 90,000 cases last year, ranking ahead of Pernod Ricard-owned Martell at 67,000 cases.
While the U.S. market has been fertile ground for Cognac’s big names, it has also shown an appetite for new and smaller brands. After a strong test run in New York, Bacardi has expanded its recently launched D’Usse Cognac ($45) into Miami, Las Vegas, Chicago, New Orleans, Los Angeles, Houston, New Jersey and Connecticut. Niche brands like Hine—acquired last month by France’s EDV from CL Financial—and Cognac Ferrand are also making their mark. “Mature markets like the U.S. are showing a growing interest for lesser-known brands, which are authentic and artisanal products,” says Per Even Allaire, sales manager for Hine, which recently joined Anchor Distilling’s portfolio stateside.