World’s largest Cognac marketsBy Amy Hopkins
Sales of high-end Cognac might be slowing as China tightens its belt, but France’s staple spirit continues to experience success around the world.
While the slowdown of the luxury spirits market in China has caused distillers to reveal some inner fears about the near future of the market, recent figures show that Cognac shipments remain “reassuringly high”.
According to data released by the Bureau National Interprofessionnel du Cognac (BNIC), global Cognac sales dipped 4% in 2013, yet sales rose 0.2%, which commentators have seen as indicative of a growing consumer penchant for expensive luxury spirits.
Over recent months, numerous Cognac producers have announced a decline in their profits, largely attributed to the Chinese Government’s crackdown on luxury spending and gifting which has resulted in a slowdown in the country’s Cognac and high-end Scotch market.
However, it will come as no surprise that China remains high on our list of the world’s largest Cognac markets, with BNIC claiming the region is still one of Cognac’s “ most important export market in terms of volume and value”.
But which other countries maintain a penchant for the luxury spirit?
Based on Euromonitor’s findings of how many litres of vodka were consumed in 2012, we count down five of the world’s largest Cognac markets.
Cognac’s motherland sits fifth in Euromonitor’s list of the five largest markets for the spirit.
With sales of 2.7 million litres in 2012, France has maintained its thirst for Cognac, despite numerous spirits producers reporting a decline in the country as an effect of the Eurozone financial crisis.
The Spirits Business reported last year that Germany was beginning to be viewed by producers as a key market for rectifying Europe’s flagging spirits volumes, and the story is no less true for its affect on Cognac sales.
With sales of 3.4 million litres of Cognac in 2012, Germany has been identified by Euromonitor as the spirit’s fourth largest market.
The number has been attributed to German consumers’ growing preference for premium foreign brands.
Cognac’s third biggest market, the UK bought 6.4 million litres of the spirit In 2012, almost double the volumes sold in Germany.
According to further research by the BNIC, volume shipments of Cognac to the UK grew by 3.4% between 2012 and 2013.
Meanwhile, the UK has seen improved performance across other spirits categories since the onset of the recession, with Diageo recently reporting that the slowdown of its net sales in the country had slowed to 1%.
27.2 million litres
Hailed as Cognac’s promised land, China has seen a decline Cognac shipments in since 2012 when its government embarked on a campaign of austerity.
Admonishing luxury gift-giving and hedonistic banqueting among politicians and military officials, the government hoped the measures would counter widespread claims of corruption and provide a more virtuous image.
However, the country is still one of the key markets for the spirit, consuming 27.2 million litres in 2012.
33.9 million litres
Importing 33.9 million litres of the spirit in 2012, Euromonitor figures show that the US is the world’s largest Cognac market.
Producers have been increasingly turning to the US and its booming luxury spirits market to offset the slowdown in China.
As the world’s biggest spirits market, which represents some 40% of international spirits profits, the US has been eyed by drinks companies, including Pernod Ricard, as a key destination to expand their presence.