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Cognac Rebounds In U.S. By Expanding Usage Occasions

September 7, 2011

While capturing big volume gains in emerging markets, Cognac also is refreshing its image in the U.S. by innovating within the tradition-focused category. Producers are busily diversifying their offerings to compete across categories and attract a wider base among younger LDA and female consumers.

Cognac’s consumption trends are shifting, with roughly 70% of all Cognac worldwide now consumed on ice, in cocktails or as a mixer, according to trade group Bureau National Interprofessionel du Cognac (BNIC). Leading brands are playing up their versatility to embrace new drinking occasions. “Innovation has opened us up to broader market opportunity,” says Chris Peddy, Beam Global’s general manager for Cognac.

Beam’s Courvoisier brand has been among the innovation leaders, expanding its appeal in the U.S. with its recent Connoisseur Collection, featuring 12- and 21-year-old expressions, both with prominently displayed age statements. “The Connoisseur Collection is the first major Cognac to launch age statements,” says Peddy. “It’s a new way for consumers to think more about Cognac, and combines it with a wine or Scotch experience.”

Courvoisier has also widened its scope with the launch of Courvoisier Rosé, a lower-alcohol (18%-abv) blend of Courvoisier Cognac and premium French red wine grapes. Priced at $24.99, the new extension has helped Courvoisier leverage the success of wine trends, according to Peddy. “The U.S. is a canvas for innovation, and the question there is, how do we get consumers to reconsider Cognac?” he says. “Courvoisier Rosé creates a new usage occasion, revolving around the summer.” Courvoisier is also eyeing future U.S. launches of more aged Cognacs and plans new expressions of its core brand.

Cognac leader Hennessy also has been active on the innovation front—mainly through Hennessy Black ($39.99 a 750-ml), the brand’s first major product addition in the U.S. in nearly 50 years. Hennessy Black was introduced in 2009 and last year surpassed 100,000 cases. The product is designed to attract younger LDA consumers and has been heavily marketed under the “Done Different” campaign, which promotes its versatility and cocktail focus. Moët Hennessy has targeted the nightclub crowd with Black, taking on bottle-service stalwarts like Patrón and Grey Goose. The effort appears to be bringing new consumers into the category while providing fresh exposure for the Hennessy franchise. Hennessy’s effort to boost its U.S. momentum also includes a partnership with New York-based artist and designer KAWS. Moët Hennessy is releasing a limited number of KAWS-designed bottles of Hennessy VS in September (priced at $29.99 a 750-ml.) as well as a series of the artist’s short films featuring Hennessy.

Number-two U.S. Cognac Rémy Martin, meanwhile, has stabilized following two down years, thanks in part to the market’s recent focus on cocktails. “The rise of sophisticated cocktails has propelled Cognac use to higher levels among new and existing consumers,” says Charles Ho, vice president, House of Remy Martin. Rémy also has a range of celebrity tie-ups under its “Things Are Getting Interesting” campaign, including partnerships with hip hop artist TI, R&B legend Usher and actor Vincent Kartheiser and costume designer Janey Bryant from the television series Mad Men.

After its volume slid by 14% from 2007 through 2009, the U.S. market’s Cognac segment managed a 0.6% increase to 3.37 million cases last year.

US – Leading Cognac Brands
(thousands of nine-liter case depletions)
Percent Change*
Brand Importer 2008 2009 2010 2008-2009 2009-2010
Hennessy Moet-Hennessy USA (LVMH) 2,160 2,117 2,138 -2.0% 1.0%
Remy Martin Remy-Cointreau USA 650 560 562 -13.8% 0.4%
Courvoisier Beam Inc 440 388 382 -11.9% -1.5%
Martell Pernod Ricard USA 95 82 77 -13.7% -6.1%
Total Leading Brands 3,345 3,147 3,159 -5.9% 0.4%
*based on unrounded data 


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