In 2022, the global cognac market exhibited remarkable strength, reaching an awe-inspiring US$5.5 billion. But what’s even more impressive is the spirit’s anticipated growth in years to come. Experts project a robust Compound Annual Growth Rate (CAGR) of 6.4% from 2022 to 2032, pointing towards a promising future for the global cognac market, which is expected to maintain its worth at US$10.2 billion by 2032.
Cognac’s Dominance in the Spirits World
While there are many excellent brandies from various corners of the globe, Cognac stands out in virtually every aspect. It reigns supreme in search queries and listings within databases. Additionally, when it comes to aggregated critic scores, it competes strongly with Armagnac. However, where it truly surpasses all other brandies is in the realm of price. Astonishingly, not a single non-Cognac brandy appears in the top 25 most expensive brandies. This overwhelming success comes as no surprise, as Cognac occupies a prestigious position similar to single malt in the whiskey category. It embodies top-tier quality, exudes prestige, and commands high prices.
The world of Cognac and single malts share common traits. Both are often produced in relatively limited quantities, especially at the upper echelons of the market. The dedication, time, and expenses invested in crafting these beverages are reflected in their shelf prices. However, the significant difference lies in the pricing. While single malts can reach astronomical prices, Cognac is comparatively more reserved. The top-end Cognac, while not cheap, represents remarkable value in contrast to its malt counterparts. Cognac frequently contains spirits that have aged for 60, 70, or even 100 years, showcasing an unparalleled commitment to quality. Considering the longevity and effort invested in producing Cognac, its pricing is surprisingly reasonable.
Steady Pricing and Consistency
A closer look at Cognac pricing reveals a remarkable consistency. Ten years ago, the global retail average price of a bottle of Grande Champagne Cognac stood at $165. Astonishingly, today, it remains at the same price point – $165. The highest recorded price since 2014 was $182 in January 2021, while the lowest was $146 in January 2017. This unwavering pricing stability continues throughout the Cognac market.
Cognac’s unique selling point lies in its consistency and affordability, making it an accessible luxury for discerning consumers. Unlike other premium spirits, the price of Cognac has not experienced drastic fluctuations, reinforcing its reputation as a dependable choice in the world of fine beverages. The Impact of Changing Trends Despite its enduring appeal, Cognac faces a challenge in capturing the attention of emerging demographics. While spirits like single malt, Bourbon, rum, gin, and tequila have successfully appealed to diverse consumer segments, Cognac retains a more specific and niche market. Recent efforts, including endorsements from the rap community, have not been sufficient to break into the mainstream. Searches for Cognac, even in the premium segment, have seen a gradual decline over the past eight years. This trend, if sustained, could pose a significant challenge for the Cognac industry.
Cognac’s Resurgence in the US Market
In a surprising twist, the Cognac market has found unexpected success during the pandemic, especially in the United States. Cognac sales by US retailers have soared, experiencing a remarkable 67.3% growth compared to the same period in the previous year, surpassing the growth rates of Tequila and whiskey. This resurgence can be attributed, in part, to the collaborative efforts of the Cognac Bureau and US bartenders.
Recognising the need for a fresh approach to marketing, the Cognac Bureau began inviting US bartenders to France, successfully reintroducing Cognac into their creative repertoire. This initiative not only contributed to the industry’s revival but also strengthened the bonds between Cognac producers and bartenders.
In recognition of the challenges faced by bartenders in these trying times, the Cognac Bureau has initiated a cocktail competition, “The Cognac Connection Challenge,” with substantial cash prizes for the winners. This competition offers a unique opportunity for bartenders, whether currently employed or waiting for bars to reopen, to enhance their knowledge and skills in crafting Cognac-based cocktails.
The Future of Cognac in Mixology
Prominent bartenders express their enthusiasm for Cognac’s versatility and potential in mixology. They emphasise that Cognac is not solely a winter spirit but can be enjoyed year-round. Bartenders are encouraged to experiment with Cognac highballs and create refreshing cocktails that can rival the popularity of gin and vodka-based drinks. With an array of classifications, including VS and VSOP, Cognac offers a wide range of flavour profiles to inspire bartenders in crafting innovative and delightful cocktails.
The Cognac competition presents a golden opportunity for bartenders to explore Cognac’s diversity and contribute to its resurgence in the ever-evolving world of mixology. Whether it’s a classic Sidecar, Vieux Carré, Brandy Alexander, or an entirely new creation, Cognac continues to hold its place as a beloved and versatile spirit in the cocktail world. The Cognac market has not only shown remarkable consistency and value but has also proven its resilience by rekindling interest, particularly in the US market. With the support of dedicated bartenders and initiatives like the Cognac Connection Challenge, Cognac is poised to remain a powerhouse in the world of fine spirits, both in terms of prestige and value.
