Cognac exports rebound to pre-crisis levels

Global Cognac exports reached their “highest level” in both volume and value terms in 2016, finally recovering from declines prompted by the Chinese government’s austerity drive, BNIC figures show.

According to the Bureau National Interprofessionnel du Cognac (BNIC), volumes climbed 6.0% and 6.8% respectively in the 2016 calendar year, resulting in a turnover of €2.76 billion.

The Cognac industry now accounts for more than 20% of French wine and spirit exports, the trade association calculates.

In total, 179.1 million bottles of Cognac were shipped globally, approximately 20 million more than in 2012, before the Chinese government’s anti-extravagance measures induced a crisis, which saw value sales fall 10% in 2013/14.

Old quality Cognac (XO-plus) drove the revival, with volumes up 11.7% and values 8.3% higher. VS, which now accounts for half of all Cognac sales, posted 9.6% volume and 13.0% value gains. VSOP, which holds around a 40% market share, remained “stable” with volume and value sales up 0.4% and 0.3% respectively.

The gains were driven by growth of the North American Free Trade Agreement (NAFTA) zone which has “performed consistently well”, the trade association says.

77.3 million bottles were exported to the US, Mexico and Canada in 2016, a 14.2% increase, while value sales climbed 14.3%. 74.1 million of those bottles were shipped to the US, Cognac’s largest market for the past 25 years.

Exports to the Far East were “stable”, with volumes up 1.0% to 51.1 million bottles and values climbing 3.0%. The Chinese market was “key” in the recovery, said the BNIC.

Europe continued to struggle, however, where shipments fell 1.2% to 39.4 million bottles. Values also contracted, with 1.0% losses reported.

Non-traditional Cognac markets, including Africa and the Caribbean, posted strong gains. Volumes climbed 5.4% to 11.3 million bottles, while values soared 5.1%. ‘New world’ Cognac drinkers now account for 6.3% of global exports.