Cognac sales indicate ‘signs of recovery’

Despite further declines in global Cognac sales last year, annual results reported by the Bureau National Interprofessionel du Cognac (BNIC) indicate “signs of recovery” for the category.

Cognac sales fell from €2.4bn in 2013 to €2.1bn last year as the Chinese market continues to bite

Global sales fell from €2.4 billion in 2013 to €2.1 billion in 2014 and shipment volumes also suffered a 3.6% decline to 155.6 million bottles.

The category also continued to feel the effects of the Chinese government’s on-going anti-extravagance campaign with exports to the region dropping 17.4% in volume and 21.6% in value.

Nevertheless, according to the BNIC the results “indicate signs of recovery” for the category with volume figures from August to December 2014 meeting those seen during the same period in 2013.

As a result, Cognac industry professionals are “certain of the significant potential in these markets – particularly China”.

Exports in Europe also decreased by 8.2% in volume and 21.4% in value, with total annual exports for the region reaching 39.5m bottles and impending return to commercial growth “unlikely”.

On the contrary, countries in North America experienced “strong” increases of 12.2% in volume and 7.9% in volume, with the US being the top export region for Cognac with total exports of 59.9m bottles.

Exports to new markets also experienced growth with exports of 9.5m bottles, equating a 12.9% increase in volume and a 17.1% in value.

Last year, the BNIC revealed global sales of VSOP and older quality Cognac categories saw double-digit declines in 2013/14, with only the VS category displaying signs of growth.

In 2012, the BNIC reported record figures for Cognac due to increasing demand from Chinese consumers.

However, the effects of the government’s anti-extravagance campaign resulted in Diageo reporting a weak start to its fiscal year due to destocking in China, and Rémy Cointreau also posted a significant sales decline.