US growth boosts Cognac sales to all time high

Growth in the US has pushed exports of Cognac to their highest level, after five consecutive year of export growth, the Bureau National Interprofessionnel du Cognac (BNIC) has reported, making up for dips in the Far East and falling exports in Europe.

The latest figures from the BNIC, export values (which account for 98% of sales) rose 6.9% last year, to Euros 3.4 billion, on volumes up 2.5% to of 211.1 million bottles. This put in at the top of the list of the major appellations, it said, representing a quarter of the total value of French Wine and Spirits exports.

Sales were strongest in the US and North America, which accounts for just under half of all exports (46%), or 97.7 million bottles up 8.8% in volume and +17.6% by value. The lion’s share of this – around 94.3 million – is shipped to the US, with Canada and Mexico making up the remaining volume.

However, shipments to the Far East dipped by 1.5% volume and 1.8% by value, to 60 million bottles, or 28% of all exports, it said, although the BNIC described this as a ‘stablization’ in the region, with producers and shippers remaining confident that there was still “significant” potential for development, particularly in China.

Although shipments fell across Europe, down 4.6% in volume to 39.4 million bottles, and -6.4% by value, there was a mixed picture across the different markets. There were weak sales in the UK – traditionally Cognac’s leading export market in the EU – which fell 5.2% by volume and 4.1% in value, while exports to Germany also fell 6%. Sales to Eastern Europe were stronger, with volumes up 4.2% and values 3.5%, while the domestic French market grew in volume, up 9.3% but fell in value terms (down 23.8%).

Emerging markets such as South Africa, Nigeria and the Caribbean also grew strongly, up 5.6% by value and now representing 3.3% of shipments, or 7 million bottles – three times the share they had ten years ago.

Currently the top ten markets for Cognac comprise the US (94.3m bottles), Singapore (26.6m bottles), China (24.68m bottles), The UK (10m bottles), France (4.7 m bottles), Germany (4.5m bottles), Hong Kong, Latvia, South Africa and The Netherlands.

Shipment of VS Cognac, which makes up 51% of all exports, saw the value of exports rise 12.7% on volumes up 5.8%, while VSOP Cognacs (very superior old pale, which must be aged for more than four years) increased in value by 7.8% on volumes up 0.4%. Older Cognacs, saw decline slow, with volumes down 4% and values dipping by 0.1%.

In order to support further growth, Cognac is acquiring an additional 10,000 hectares of vineyard (24,710 acres) over the next three years, taking the total area under vineto 86,000 hectares (212,510 acres) compared to 76,000 hectares (187,800 acres) today.

Last week the BNIC announced it was opening a new UK agency.