LONDON, February 21, 2017 /PRNewswire/ --
Cognac's recent strong growth is poised to continue in the coming years, driven by increased consumption in the US, China and the UK, according to a joint report from just-drinks and the IWSR featuring the latest full-year data available.
While growth will moderate slightly from the near-4% volume increase seen in 2015, global consumption will increase by some 2m cases by 2021, the Global Cognac Insights report says, with the US moving above 6m cases by the end of the forecast period.
China - which remains the largest Cognac destination by value despite a recent slump in the wake of the government's anti-extravagance drive - will continue to recover, with growth accelerating in a few years' time.
"Although Cognac has suffered in China, the category has to some extent been protected by its longevity in the market," says the report. "Forced to choose, many consumers will opt for Cognac over rivals such as Scotch whisky."
And it adds: "It seems inconceivable that there will not be some kind of rebound in the luxury Cognac market in China over the coming years; the key is to know precisely when, and to what extent."
While Chinese consumers tend to view relatively inexpensive VS Cognacs as too cheap, opting for VSOP and above instead, VS is the key driver of Cognac's biggest volume market, the US. As China has cooled, producers have increasingly targeted the US, resulting in a double-digit sales increase in 2015.
However, new entrants to the market are not necessarily copying the template of the dominant Hennessy brand and selling VS to the hugely influential African-American demographic; instead, they are increasing prioritising value over volume.
As demand for luxury Cognac has declined in China, companies are rerouting inventory investment into younger spirit - a reflection of the growing importance of the VS and VSOP segments in markets from the US to Africa to Eastern Europe.
There is an enormous and growing gulf between the 'big four' Cognac houses - Hennessy, Martell, Rémy Martin and Courvoisier - and the rest, with the quartet accounting for almost 90% of the category's retail value in 2015.
Global Cognac insights - market forecasts, product innovation and consumer trends, published in November 2016, can be purchased via the just-drinks research store.
just-drinks.com is the online news, insight and research portal for the global drinks industry. Our editorial team includes contributors from around the world, while our commentators comprise experts in their respective fields of beer, bottled water, soft drinks, spirits (both brown and white) and wine. Under the direction of managing editor Olly Wehring, we offer an impartial voice and are driven by our passion for the drinks industry.
About The IWSR
The IWSR is the leading source of data and analysis on the alcoholic beverage market. The IWSR's database, essential to the industry, quantifies the global market of wine, spirits, beer and RTDs by volume and value, and provides insight into short- and long-term trends. IWSR statistics are used by all of the largest multinational wine and spirits companies, as well as many more local companies. The IWSR's unique methodology allows them to get closer to what is actually consumed and better understand how markets work. The IWSR conducts face-to- face interviews with 1,500 companies in 118 countries each year, with further input from 350 companies. The IWSR tracks overall consumption and trends at brand, quality and category level.
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SOURCE just-drinks and The IWSR