1998 Market Trends
Cognac is witnessing great changes.
In the United States, Cognac is succeeding in being consumed first as a popular and ethnic long drink for younger qualities, and second as a prestigious product with the existence of elitist market niches.
We have already described the long drink phenomenon in a previous newsletter, but these new market niches deserve our attention:
First the epicurean cigar smokers, who drink products that carry a strong image, or special blends prepared by the greatest cellar masters.
But also a new trend that applies to "new age gourmets" who select Cognacs as they would other products: "small is beautiful", authentic, very typical products. This has generated the emergence of a "single" culture, new on this market and opposite of the classic positioning of major Cognac houses.
These new trends can also be found in Great Britain where, on top of everything else, the existence of vintage Cognacs is being rediscovered. A new generation of consumers is also appearing with the successful introduction of Cognac mixers.
In France, the efforts made to change the image of Cognac as being only an after-dinner drink are starting to show results, not only in terms of image, but also in terms of sales and consumption. Younger Cognacs are now easily drunk as an aperitif or in night clubs. Only the ones over 40 years old seem reluctant to these new trends, as they are probably still attracted by the status and conformist attitude that applies to whisky.
Eastern European consumption continues to progress and its consumer base is widening with the economic growth. Marketing investments are starting to be significant, and the market is quite structured.
In South East Asia, Cognac has suffered from two major events: first, the very serious financial crisis, but also the growing attraction for red wine and vintage wines.
Luckily, the Cognac reputation is safe, and a more normal economic situation should make the Chinese come back to their favorite drink.
If the French Paradox aspect is undeniably in favor of red wine, all is done today in Cognac to scientifically confirm what Asians have always been aware of: Cognac is good for your health.
Consumers have also learnt at their expense that vintage wines require optimal transportation and conservation conditions.
Cognac can better take extreme conditions under which these products are being exposed in such latitudes.
However, another penalizing aspect is disrupting the most efficient commercial strategies: stocks.
At the end of last year, "paid rights" or "local currency" stocks were at the top. An for some brands, these stocks are still not disposed of. Therefore, the prices being asked could simply double if the new consignments had to be disposed of with the same price structure.
Nevertheless, the Cognac image is safe and our product is still attractive. It is interesting to note that substitution products (particularly brandies) have much better resisted in terms of sales. This shows that the category is ready to get going again at the first opportunity.
Product Update
Cognac producers, always very creative, have prepared their offensive on these new markets since long.
Long Drinks
Innovative houses such as Guerbé with its Club Blend, Gourmel and its Petit Gourmel, or Brillet with its Brillet Seltz, or even the Distillerie des Moisans and its XY (Extra Young) had already launched Cognacs to be mixed. The objective to create a new category of products has been reached as Hennessy just came out with a new product to conquer the younger European consumers: the Pure White. These young eaux-de-vie slightly colored (systematic use of russet barrels), are directly aimed a t whisky, gin, tequila, rum and vodka drinkers.
Speaking of vodka, Remy Martin has gone one step forward by combining Cognac and vodka in a new product called Platinum. Market tests are in progress…
Cognac Cocktails
We had already told you about this category which was created or reinvented by L& L with Alizé, where new competitors such as Courvoisier with Osé or Martell with & C°, are present.
Regarding & C°, the first tests in Great Britain seem very promising. This new product, hazelnut-flavored, makes it easier to drink Cognac without denaturing the product.
Mixers
This concept derived from flavored beers and premixes, has started in Cognac. We had already presented the XO Beer by L & L which seems promising. Bisquit has launched in Great Britain a mixer called N°1 presented in an elegant transparent bottle similar to the Tex-Mex long neck. This sparkling cocktail is experiencing a great success. Prestigious competitors are also looking in the same direction.
