Cognac in growth due to gifting, e-commerce and changing demographics
A new study has found that the global Cognac category is growing and increasing its market share, boosted by its strong presence in the US.
According to a recent market study by Technavio, 44% of Cognac’s growth is set to originate from North America and, thanks to e-commerce distribution, how highly giftable bottles have become and a new generation of drinkers, the category is evolving.
The study shows how Cognac’s market share is expected to increase by US$303.59 million from 2020 to 2025, with an accelerated CAGR of 2.06%.
In response to this, the research showed how companies like Beam Suntory, Chateau de Cognac and Jas Hennessy and Co, have stated plans to reportedly deploy strategies to compete within the sector.
The report’s regional market outlook shows how the Cognac category is segmented by geography (across North America, APAC, Europe, South America, MEA) and that “44% of the market’s growth will originate from North America during the forecast period”.
The findings also outlined that the US is “one of the key markets for Cognac” especially in North America, however “market growth in this region will be slower than the growth of the market in APAC”.
Additionally, it stated: “The increasing popularity of online distribution channels and changing consumer demographics are the prime factors that will facilitate the Cognac market growth in North America over the forecast period”.
The growth is also being led by the category being highly giftable and, as the findings disclosed: “Cognac is one of the most preferred gifting options in many countries” and highlighted how “gifting is a common phenomenon in countries like China, the US, and the UK on various occasions like Christmas, New Year, Thanksgiving, corporate events, and marriages” and “on the part of the giver, it brings a sense of high social status, modernity, social distinction, and self-expression and reflects gratitude toward the receiver’.