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U.S. Cognac Market Surges Past 5-Million-Case Mark

October 17, 2017

Cognac continues to thrive in the U.S., propelled by the remarkable rise of category leader Hennessy, along with steady progress for leading competitors Rémy Martin, Courvoisier and Martell, and an impressive contribution from relative newcomer d’Ussé. Last year, total Cognac depletions in the U.S. leapt 17% to 5.4 million cases. With similar growth this year, the category could make a run at the 6-million-case mark. On the value side, Cognac shipments to the U.S. reached €1.1 billion ($1.5b) in 2016, roughly double their total of just five years earlier.

Hennessy now comprises 68% of the U.S. Cognac market. Since 2010, the brand has grown by more than 70%, to hit 3.7 million cases. Last year, it overtook Smirnoff to become the largest spirits brand in the U.S. by retail value at nearly $1.6 billion, according to Impact Databank. Hennessy’s marketers don’t see any sign of the momentum slowing. “I think the speed at which Cognac will be adopted over the next four to five years will be far greater even than it is at the moment,” says Giles Woodyer, senior vice president for Hennessy at Moët Hennessy USA.

While Hennessy continues to dominate, Rémy Martin, the U.S. market’s number-two player, is also making solid progress. The brand was up 9% last year to 823,000 cases, even after exiting the VS segment in recent years to refocus its portfolio on its VSOP and above offerings, including the popular 1738 Accord Royale ($55). In the six months through September, Rémy Martin’s global sales were up 15% to €367 million ($431m), with the company noting “solid demand for high-end Cognac” in its Americas region. Beam Suntory-owned Courvoisier is the third-largest Cognac in the U.S., and advanced by 6.2% to 470,000 cases last year. Jeannette Edwards, global brand director for Cognac at Beam Suntory, tells SND that Courvoisier expects to see benefits looking ahead from its recent packaging update.

Pernod Ricard-owned Martell, ranked fourth, crossed 100,000 cases last year on 6% growth after sharpening its focus in the U.S. the past few years. “The VS segment—75% of the category—remains extremely important, and it’s really healthy,” says Martell brand director Brian Smith. “But from my seat, the VSOP segment is where we’re seeing the most dynamism.”

Bacardi is also on the move in Cognac. Its d’Ussé brand, launched in 2012, jumped 48% to 86,000 cases last year, and senior brand manager Tyler Phillips says it could reach 150,000 cases for 2017. “D’Ussé is outperforming both Cognac overall and the VSOP category in terms of percentage growth,” Phillips notes.—Shane English

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