Craft is a word that’s heard a lot in the spirits world, mostly being used to identify independent brewers and distillers, as opposed to companies that operate on a much larger scale, mass-producing bottlings. Although still a niche product, France’s oldest brandy, armagnac, is one that embodies the word ‘craft’ and sticks to tradition.
According to IWSR Drinks Market Analysis, the largest markets for armagnac are France, the UK, Russia and the US, along with travel retail. Of these markets, travel retail is expected to gain the most volume over the forecast period of 2022-2027. Global armagnac volumes have a CAGR of 3% during the forecast period, however volumes are not expected to return to pre-pandemic levels.
Modernising tradition
Armagnac is a category that sticks to what it knows and rightfully so, because it works. The category is one of the “few spirits that has a massive vintage library and classically has seen a lot of vintage sales for producers, especially independent ones”, says Jérôme Castledine, commercial development & communications director at Bordeneuve Châteaux & Collections.
Bordeneuve has been a site of vinification and distillation for many hundreds of years, as all barrels employed at Domaine de Bordeneuve are, under the rules of the AOC Armagnac, crafted from French oak. Sticking with tradition, Domaine de Bordeneuve also has its own alembic on the property, a solid copper, secular still which celebrated its 100th birthday in 2021. As Castledine notes, with armagnac: “You’re trying to modernise it but you need to rely very much on 720-plus years of tradition and history.
“With the different soils, regions, qualities bought by different vintages etc, you’ve got myriad potential expressions anyway. The general opinion is to stick to what we know best but try to modernise it at the same time.”
Cognac is the giant of the brandy family, being more of a household name for French brandy and much more commonly known than armagnac. Castledine adds: “Armagnac has been a little bit left behind because it didn’t apply itself to the heavy marketing that the Cognac region did in the 1950s and ’60s, so it doesn’t have that cushion but it’s starting to move now. With increased sales on the blends, we’re starting to notice that it’s being tried and retried as people are pleasantly surprised with the aromas and smoothness.”
As the IWSR found, the US is a key market for armagnac, something French producers are seeing more of and leaning into. Bhakta Spirits, owned and run by Whistlepig Whiskey founder Raj Peter Bhakta, is mostly based in Vermont, US, with cellars and an 18th-century chateau in Condom, south west France. Bhakta wanted to introduce armagnac to the American whiskey drinker, launching Bhakta 50, an armagnac finished in Islay whisky casks. This is a practice typically frowned upon by armagnac as it goes against the AOC rules, meaning it cannot be called an armagnac, only brandy, if not finished in French oak barrels.
Amanda Garnham, previously of the Bureau National Interprofessionnel de l'Armagnac, now consulting for Bhakta Spirits, says: “There’s a new generation of armagnac producers on the map. In 2003, 60% of armagnac was consumed in the domestic market and 40% was exported, and that’s kind of done a complete flip. That’s got a lot to do with the houses being a lot more dynamic now in terms of sales forces, and it’s a different generation.”
Domaine d’Espérance has also experienced the increase in popularity for armagnac in the States, as producer for the brand Claire de Montesquiou says: “The trends are coming from the States as everyone loves craft distilling, which is what armagnac is. It is a small artisanal industry. The other trend is of cask proof armagnacs as in whisky. Our blanche armagnac is working well in the States for cocktails and in the mixology world. We have launched recently in France and it’s working well”.
Changing cocktails
Armagnac is becoming a more recognised base for cocktails due to its dynamic profile: “With two bottles, the VS and VSOP, you can cover so many different existing cocktails so I think it’s very much a future market for armagnac,” says Castledine. “I don’t think there’s any other spirits on general sale that have such a history and choice of vintages, we’ve got some going back to 1893 and, apart from the 1950s which was a bad decade, we’ve got stock of each year up until now.”
As the pandemic changed the home cocktail market, it gave people the chance to research products for recipes and allowed for more consumption experimentation. Castledine says the tendency was “for people to look for more artisan products and better quality, possibly less volume”.
He adds: “We noticed fairly quickly an increase in the volumes of blends sold against vintages. It’s much more viable to encourage the growth of the blends because it’s renewable every year rather than a vintage. For small producers that’s good news. We’ve seen growth in sales, from the VS mark to 10-year-olds for example. The trend seems to have continued, people have been wanting to find similar cocktails that they’ve got used to making at home.”
Armagnac producers have been investing in the category's use as a base for cocktails, “especially targeting high-end urban on-trade venues, with some success”, says Jose Luis Hermoso, IWSR research director. “However, armagnac’s appeal with younger legal drinking aged consumers as a sipping option or bottle share remains limited, and its generally high price remains a barrier for trial.”
Armagnac Castarède is also experiencing success in the higher-end venues, as chief executive Florence Castarède says the XO, minimum 20 years old, can be “very interesting for restaurants, clubs or hotels, as it’s more for connoisseurs. We follow the difficulties of our sector, it’s not as necessary to drink armagnac so it’s good for gifting, but for fun it’s more difficult at the moment”.
Being in the higher end also comes with its challenges, as Castarède adds: “Since this summer every wine and spirits business is facing inflation and consumers are having to spend less.”
The rise in costs, along with the pandemic, haven’t been the only challenges to face armagnac in recent years. 2023 saw mildew, with frost the years prior, creating turbulent times for the artisan spirit. De Montesquiou adds that with the mildew: “You don’t recover, you just have no crop. In my case, I had a good crop because we treated the vines well. The geography of the armagnac makes a difference.
“If you are located east it’s sunnier and rains less, and it drains better because it’s on chalk, but if you are west it’s closer to the sea and it rains more, and you are on sandy clay, so it is more difficult to drain,” adds De Montesquiou.
Despite the challenges it’s faced, what it lacks in fame it makes up for in tradition, becoming more recognised and demanded in the global cocktail scene. As Castledine says, with a bottle of the blanche “you can virtually replicate all existing cocktails that are based on gin, vodka, cognac, whisky, rum. But the complexity and choice of flavours you can pick out of armagnac means there are hundreds of new cocktails based around armagnac being done all the time”, proving its worth alongside the big categories as consumers and bars seek out new and innovative serves.
