Cognac drinkers to ditch ‘big four’ for independent brandsBy Becky Paskin
Cognac drinkers are predicted to switch loyalty from the “big four” brands to discover smaller producers, much like what has happened in the whisky and beer market.
Although almost 90% of the Cognac industry is dominated by four main producers – Hennessy, Martell, Rémy Martin and Courvoisier – there are “possibilities” for small independent houses to take back some market share as drinkers begin to diversify within the category.
The forecast made by Jan Braastad, president of Cognac Tiffon, comes as three of the big four posted sales declines of between 4-11% in 2013 (The Spirits Business Brand Champions) as Chinese austerity measures eats into volumes.
Braastad said he expects the independent sector to continue to develop over a long period, but to wrestle market share from larger brands, smaller houses must increase their capacity to supply demand.
“Now the big producers have 87% of the market, there are possibilities for small players in the future,” he said.
“Look at what’s happened with whisky and beer – consumers will be interested to taste brands other than the main ones but Cognac houses have to develop their own capacity to grow, and keep quality high.”
Braastad added that the Tiffon house has grand plans to develop its own Braastad Cognac, which is the world’s sixth largest thanks to a strong Nordic brand positioning and strong representation in Norway.
“Our intention is to be recognised as a good Cognac producer,” he said. “In the last 10 years we have invested a lot in our facilities and stock, so now it’s a good time to look at markets other than the Nordics.”
The company is repositioning itself toward VS and VSOP expressions in China, while developing new distribution in markets such as the US, Germany, Poland and the Czech Republic.
The house also produces Cognac Tiffon, which has recently gained distribution in the UK through the Great Whisky Company.