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Cognac Is Down but Not Out

After two years of slumping U.S. sales, Cognac shows growth in early part of 2010

Posted: May 4, 2010

Americans consumed less Cognac for the second-straight year in 2009, as sales fell by 6 percent down to 3.4 million 9-liter cases. The stagnant global economy adversely affected all major markets for Cognac last year, according to The U.S. Distilled Spirits Market: Impact Databank Review and Forecast, 2009 Edition. But the United States remains far and away the largest market for Cognac, the world's best-known brandy.

Until 2008, Cognac had enjoyed 14 consecutive years of annual sales growth in the U.S. Long appreciated by older consumers as a digestif, the French brandy from the Cognac region had also recently begun to attract a younger demographic. But the economic malaise has compelled some consumers to “trade down” to less expensive alternatives, and not just within the brandy sector. Sustained high unemployment rates have put pressure on disposable incomes, and holiday retail sales were impacted severely for the second straight year. The lingering recession affected imported goods such as Cognac particularly hard, especially in restaurants and bars, where luxury-priced imports have a much higher presence.

Domestic brands, which account for nearly two-thirds of American brandy consumption, eked out a slight gain last year. E & J brandy continues to outpace the sector, and has been the country’s best-selling brandy since 1983, according to the 689-page report. E & J is distilled by E. & J. Gallo Winery, the world’s second-largest wine company by volume. America’s next best-selling brandy is Paul Masson, which is produced by the largest wine company, Constellation Brands.

Cognac accounts for over 30 percent of all brandy consumed by Americans, and continues to be led by the “Big Four” brands of Hennessy, Remy Martin, Courvoisier and Martell, which combine for well over 90 percent share of the U.S. Cognac market, according to Impact Databank, which is owned by M. Shanken Communications, the parent company of Wine Spectator. Although 2009 was another difficult year, there is cause for optimism among Cognac producers, as the decline during the second half of 2009 was far less steep than in the first six months. Cognac exports to the United States actually grew by 19 percent in the fourth quarter, and began 2010 on a high note, increasing 16 percent in the first quarter.

The annual U.S. Distilled Spirits Market report analyzes the latest trends in the liquor industry. Containing well over 400 tables, graphs and maps, the expanded 2009 edition provides comprehensive projections by origin and type through 2015 and the first look at brand forecasts for 2010. The exclusive study also ranks the top 200 spirits by volume and provides data for nearly 500 brands (which make up 95 percent of the market) since 1980. The report also includes demographic profiles of spirits drinkers by gender, age, income and race, consumption data by state and much more.

For more information about The U.S. Distilled Spirits Market: Impact Databank Review and Forecast, 2009 Edition, which is also available on CD, and other Impact Databank reports on wine, beer and the global drinks market, contact Elisa Trapani at M. Shanken Communications, 387 Park Ave. S., New York, N.Y. 10016; by phone at (212) 684-4224, ext. 339; by fax at (212) 779-3366; or by e-mail at etrapani@mshanken.com. A comprehensive table of contents and a detailed listing of tables and charts is available.

Chanaud De Lestang
Sceaux, France —  June 24, 2010 8:30am ET
Personnaly, I am not surprised that Cognac is down. So far, the "main big suppliers" consider that Cognac is a market for captive customers. If you like Cognac, you can only buy Cognac ! This is an error because most Wineries of Cognac never shows a very good Cognac at affordable prices. Fortunately, soem new Winemakers are coming. Recently I test "Laurent Jouffe" Cognac. He is an Entrepreneur very active but, most of it, propose 3 quality of Cognac (VS, VSOP & XO) really amazing. It is the first time EVER I really enjoy testing and drinking Cognac in my whole life. The rule of good product at good price will always be the key for Wine amateur !

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