French spirits sales grow for first time in three years

French spirits sales are back in growth for the first time since 2012 thanks to the “high performance” of Cognac, which saw strong value and volume gains.

French spirits sales have increased for the first time since 2012

According to figures released by the Fédération des Exportateurs de Vins & Spiritueux de France (FEVS), after two years of “slight decline” total sales of French wine and spirits reached a “record” €11.7 billion in 2015 – an increase of 8.7% compared to 2014.

A total of €10.4bn worth of French wine and spirits was exported in 2015, boosted by “positive exchange rate fluctuations”, particularly as the euro weakened against other currencies.

Around 60% of French wine and spirits are exported to countries outside the EU.

Spirits sales increased 13.2% by value to €3.7bn, however volumes declined 3.7% to 48m nine-litre cases due to a slowdown in the core markets for French vodka and brandy. Vodka sales fell 8.5% and Armagnac sales dropped a significant 31.4%.

In 2014, volume exports of French vodka overtook Cognac for the first time as producers struggled against China’s ongoing austerity measures.

Last month, Diageo reported a 34% net sales decline for its French grape-based vodka brand Cîroc, which was impacted by a “replenishment model on innovations” in the US, which subsequently reduced shipments.

However, Cognac saw significant value growth of 19.6% to €2.6bn and volume growth of 9.4% to 14m nine-litre cases. Since China embarked on a crackdown on conspicuous spending and consumption, producers have been aiming to increase their footprints in the United States and Latin American markets.

Total exports to the US increased 28% last year to €2.5bn, meaning the country retains its position as the largest market for French wine and spirits.

Meanwhile, exports to China are “bouncing back” to their 2013 level, increasing 23% to €830m with to a “more balanced mix of products” boosting volumes. While higher end Cognac continues to decline in the country, VS and VSOP variants are reporting strong growth.

The FEVS described the EU as a “resilient” market with exports increasing 1%, while the rest of the world, excluding Russia, saw sales grow 8%. The market for wine and spirits in Russia has been impacted by economic and geopolitical turbulence in recent years.

“This historic result belongs to an industry that promotes the excellence of French wines and spirits across the globe,” said Christophe Navarre, president of the FEVS.

“However, it is a paradoxical result. In 2015, growth is due to cyclical factors, in particular the weakening of euro. But the French wines market share, both in volume and in value, has been steadily declining for the past 15 years.

“If French businesses and products are to continue to perform and to be competitive on the international market, now is the time to resolve the structural shortfall in supply and to accelerate the opening of the most important markets.”