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Cognac exports hit new heights in 2018

Exports of Cognac increased for a fourth consecutive year in 2018, with strong growth in the Far East offsetting a downcast performance in Europe.

2018’s harvest was much improved for the Cognac industry

According to data from trade group the Bureau National Interprofessional du Cognac (BNIC), Cognac volume exports grew 3% to 204.2 million bottles, while value increased 2% to €3.2 billion (US$3.7bn). In total, nearly 98% of all Cognac made is exported.

The ‘Nafta zone’ – comprising the US, Canada and Mexico – continued to perform well for Cognac, with 87.4m bottles shipped to the US, the category’s largest market.

Also in 2018, the Far East, which represents 29.4% of total Cognac exports, imported 60.1m bottles – a volume increase of 5.6% and value increase of 3.7%. China and Singapore spearheaded the region’s growth, importing 24.2m bottles and 27.2m bottles respectively.

The BNIC identified South Africa, Vietnam and the Caribbean as areas with “strong potential” for Cognac exports.

However, the European market for Cognac was hit by “difficult political and economic times” and saw exports drop 5.3% in volume to 39.4m bottles and 2.2% in value.

VS Cognac, which accounts for half of all Cognac exports, and VSOP, which accounts for nearly 40% of shipments, grew volumes by 2.6% and 3.5% respectively, while combined value exports were flat at -0.3%.

Volume exports of older categories of Cognac, including XO, grew by 7.5% and value shipments increased 6.3%.

“Cognac professionals remain confident in the future and continue with their ambition plans to meet the demands of the ever growing export markets,” said Patrick Raguenaud, president of the BNIC.

The yield of 2018’s harvest in Cognac was much improved versus 2017, growing from 88.95 hectolitres per hectare to 126.8 hectolitres. Due to the loss of some liquid during distillation, the BNIC estimates 970,000-980,000 hectolitres of pure alcohol will be put into casks this year.

This quantity exceeds the region’s original business objectives for 902,000 hectolitres of pure alcohol to be put into casks this year. According to the BNIC, many trade members believed this quantity would have been too low to meet demand.

At the end of last year, The Spirits Business selected which Cognac and brandy brands will be the ones to watch in the coming year. See the full list here.

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