“China’s continued battle with Covid-19, and the ensuing stop-start nature of shutdowns in the on-premise, has delayed the return of pre-pandemic volume levels in that market,” says Jon Potter, managing director for Maison Courvoisier. “Additionally, the economic downturn felt in Western Europe and the US dampened consumer spending.
“The global cognac market is unquestionably dominated by the US, Global Travel Retail and China. Growth in the future will come from continued recovery and growth in East Asia, centred in but not limited to China, as well as welcoming new consumers into the category in more developed markets.
Uphill battle
In the US, cognac has benefited from general premiumisation trends but does face competition as other categories do the same. Against the backdrop of the macro-issues facing the industry, 2023 may not be an open goal.
“I believe cognac has a tougher uphill battle in the near future due to losing some market share to tequila,” says Jones. “The supply chain shortages during the pandemic exacerbated this problem. There is more indication that the category can mature further with established brands, but introducing something new without any heritage behind it I believe is a daunting task that would need an enormous marketing plan.
“The spirits drinker is already drinking better quality and drinking less. This premiumisation trend is in cognac’s favour. However, the category should not take itself too seriously or be too stuffy. There are great stories to be told and fine brandies to be enjoyed. The simpler the strategy I feel the better. The category already has enough allure to welcome many new consumers alike.”
Even with the volume decrease and against a backdrop of logistical and economic turmoil, BNIC chairman Christophe Veral declared 2022 as “the third best year ever recorded in the history of cognac, after the record years of 2021 and 2019”, so clearly something is working for the sector.
In the 21st century, and before the arrival of D’Ussé, cognac has found its greatest brand ambassadors in rap music. Hennessy has become one of the genre’s most prevailing cultural touchstones. In the UK, Stormzy’s 2017 single Vossi Bop features multiple references to Courvoisier. It proved a viral sensation, debuting at number one and amassing 12.7 million streams in its first week – at the time the most ever achieved by a rapper. Outside of rap, in her comeback single Break My Soul, Beyoncé references “tryin’ to smoke with the yak in your mouth”. It’s a truth self-evident – the music world loves cognac.
In 2006, when Louis Roederer managing director Frédéric Rouzaud was asked by The Economist if he thought the association with hip-hop harmed the Cristal brand he replied: “That’s a good question, but what can we do? We can’t forbid people from buying it. I’m sure Dom Pérignon or Krug would be delighted to have their business.”
Shawn Carter was a key player here too. He responded by replacing the cuvée in his upscale 40/40 Club with Dom Pérignon and Krug and commented that he found Rouzaud’s “comments as racist and will no longer support any of his products through any of my various brands”.
