Spurred By Surging Hennessy, Cognac Reaches Record Highs In 2016January 18, 2017
Spurred by significant growth in the U.S. market, Cognac exports reached record highs in volume and value in 2016, according to the BNIC trade group. Exports rose by 6% to nearly 15 million nine-liter cases, while export value grew by 6.8% to €2.76 billion ($2.94b), according to the BNIC. Volume and value both eclipsed their previous records set in 2015.
North America was the growth engine, with shipments up 14.2% to nearly 6.5 million cases. The U.S., Cognac’s largest global market, accounted for more than 95% of North American volume.
While a number of leading brands are making progress, category leader Hennessy is more dominant than ever. In 2015, Hennessy rose by 18% to pass 3 million cases. Remarkably, the brand’s 2016 performance is estimated to be even better. According to Impact Databank preliminary figures, it grew by 20% last year to more than 3.6 million cases.
Hennessy’s growth has led to solid gains in category share in recent years, even as competitors including Rémy Martin, Courvoisier, Martell and D’Usse achieve solid growth of their own. In 2011, Hennessy’s share of the U.S. Cognac category was just under 62%. By 2015, it surpassed 66%, and given its expansion in 2016, its share is now estimated to be above 68%. Hennessy isn’t only grabbing share from rival Cognac brands, but is also gaining converts from outside the category. And while the volume picture is impressive, the value totals appear even more so, as the brand’s higher marques gain share of the total brand even as Hennessy VS sustains double-digit growth.
Elsewhere for the Cognac category around the globe, exports to the Far East were up slightly in 2016 after struggling in recent years, with shipments rising 1% to 4.25 million cases. In China, where slower economic growth and a government austerity program had previously sapped Cognac of much of its momentum, the BNIC says the category has now stabilized. In Europe, Cognac exports were down 1.2% to 3.3 million cases. —Peter ZwiebachSubscribe to Shanken News Daily’s Email Newsletter, delivered to your inbox each morning.