Cyril Camus: Cognac category needs flexible rules

As head of the largest independent family-run Cognac house, Cyril Camus is paving the way for the next generation. He tells The Spirits Business about the brand’s global success, but also his frustrations with the lack of evolution in the category’s regulations.

Cyril Camus, president of Camus Wines and Spirits

*This feature was originally published in the May 2020 issue of The Spirits Business

“Around seven or eight years old, I remember seeing the vineyards and picking grapes – harvesting is a very impactful image in my mind,” recalls Cyril Camus, fifth generation of the Camus family business and president of Camus Wines and Spirits. “Another strong image I have growing up as a kid in Cognac is sometimes I would go see my father in his office, either during the holidays or after school. If I went there in the late part of the morning I would see him going through his tasting ritual, tasting products for blending.”

By age eight, Cyril had travelled to Moscow with his father on one of his business trips, and accompanied him to New York the following year. By his early teens, he’d also been to Asia. It was far from your average childhood, but “it was great”, enthuses Cyril.

“It was fascinating to see how my father would interact with different people and how all the hosting was being done, how Cognac would take its place on the table as part of the conversation, and how this would be different from place to place,” he says. “This is essentially what fascinated me.”

MARKET OPPORTUNITIES

Cyril joined the family company in 1993 as a young graduate. “I joined in China, actually, in the first representative office we had there.” His role involved trade relations, ensuring the brand was present at trade shows and in‐ store tastings. “I also did quite a bit of training for distributors in duty free and domestic markets, so that’s how I started, in China, very much focused on market opportunities,” he adds.

With five generations behind the Camus brand, making it the largest family‐run, independent Cognac house, being a family‐owned business is central to everything Camus does and represents. However, Cyril stresses that his role is not to protect the past, but to “build from the past and reinvent the company with every generation”.

He explains: “We are on this quest for perfection and every generation’s duty is to go further down the road of finding perfection in Cognac. So today, we already make the most aromatic Cognacs in the industry, but we want to always get better at it. So we take the generational pride of building from the past but then become better than the past. We see ourselves more as a living tradition at the service of perfection.”

Vine time: grapes in the fields

The Camus estate spans 280 hectares in the Borderies cru, making the Cognac house one of the largest winegrowers in the region, with the ability to produce roughly 200,000 litres of alcohol per year at full capacity. But this is only enough to meet 15% to 20% of Camus’ needs. Camus sources the remaining eaux‐ de‐vie it requires from approximately 200 winegrowers in the region.

“These are people that we have worked with for a number of years, sometimes multiple generations, and it gives us a lot of diversity in our raw materials,” says Cyril. “It helps us to really craft blends that are a great reflection of the specificity of the terroir. We might not necessarily be able to do that if we only had our own space.”

He explains how the Borderies was the first place in the Cognac region where vineyards were planted and where Cognac was made. “Over the years, the Cognac region extended outwards from the Borderies, but none of them have the same type of soil. The Borderies are really distinguished by their minerality and also their floral notes. The soil has a very high content of the molecule for violets and for iris flowers, and you don’t find that in the rest of the region, so that is the distinguishing element.”

Cognac is a category steeped in history and tradition; it’s what makes the spirit so special. In recent years there have been several adjustments to the Cognac age specifications. The category’s governing body, the Bureau National Interprofessionnel du Cognac (BNIC), introduced new regulations in 2018 meaning all XO Cognac must be aged for a minimum of 10 years, rather than six. The following year, a new age specification was brought into the fold, XXO (meaning extra, extra old), allowed if the youngest component of the blend had been matured for at least 14 years.

However, Cyril believes the industry missed a trick by not shaking up the rules further. He describes the introduction of XXO as “just basically creating another category with yet another minimum age in the blend. It doesn’t actually create much difference.”

He continues: “At the same time, the industry decided against exploring wood finishing for Cognac, and that is a shame. Over the past two years we have created Port‐finished Cognac, and a Cognac that’s been aged on a ship. Those are things that bring a different range of tastes into the category and would be very interesting for consumers. But that, somehow, is just not on the cards right now. I’m in favour of innovation, but not particularly happy with the type of innovation that’s happening. I wish we could do more.”

EXTEND THE REGULATIONS

What Cyril would like to see is an extension of the Cognac regulations, similar to what occurred within the Scotch whisky category last year. In 2019, the rules that regulate how Scotch is matured were expanded to permit the use of oak casks that have been used to age wine, beer, ales and spirits, including Tequila.

“I wish we could have some space in the Cognac industry to experiment with it all and get the feedback from our consumers,” says Cyril. “Then we can decide as an industry if it’s something we want to formalise and generalise, and put into the framework or not. But right now, there’s very little space for innovation and none for consumer feedback.”

While Cyril would like to see more flexibility, particularly with finishes for Cognac, he doesn’t believe the tight rules and regulations are holding the category back from being competitive against other spirits, like Scotch or American whiskey. “Cognac is at a historical high and is selling everything it’s producing right now,” he explains. “We never sold more Cognac than we did in recent years. We don’t need these changes to grow the business. We need this to keep the product interesting for future generations. To build our future, we need to be experimenting now and we’re losing time.”

Swans’ way: Camus’ château

SPECIAL EDITION BOTTLINGS

One way Camus is endeavouring to retain its audience is through its Rarissimes Collection of Cognac. The series comprises special edition bottlings that range from 40‐year‐old variants to multi‐vintage blends, often limited to 500‐900 bottles. “These Cognacs are really quite complicated and expensive to produce and we don’t get a very high commercial return on them,” explains Cyril. “But I believe this is something that is of great value to our core consumers. It is providing that group of consumers who really follow us an opportunity to basically journey through our cellars and then discover tastes and experiences that they wouldn’t otherwise be able to get.”

Global expansion has been a focal point of Camus’ strategy, and over the past few years the company has struck numerous distribution deals to act on its ambitions. Among the many regions the business is seeing success in, Cyril names Russia, China, the US and France as the company’s key markets, while duty free “remains our number one market”. Asia duty free has, historically, been strongest for Camus, while Japan and China have been prosperous domestic channels for the brand. In 2007, Camus founded its own distribution subsidiary in China, Yuanliu International Trade. In 2017, the company became the exclusive distributor of Campari Group in China’s domestic market.

Then, in July 2018, Distell appointed Yuanliu as the exclusive distributor of its Scottish Leader, Ledaig and Deanston Scotch whisky brands in the country.

“We opened our own distribution company because we could not find any national‐scale importer or distributor who was genuinely interested in brand building,” Cyril explains. “We’ve built the company by value into the number five importer of spirits.” Cyril adds that Cognac is the “number one category for imported spirits in China”. He says the mix of good distribution and brand positioning play to Camus’ strengths in the region.

“Our premium positioning and premium range resonates well with the business community and the notion of corporate entertainment, so do the banqueting and business dinners and business toasting,” he says. “This is why we do so well in China.”

Since president Xi Jinping’s crackdown on extravagant gift‐giving as part of an anti‐ corruption campaign in 2013, Cognac producers have had their work cut out to re‐educate the country about the spirit and its worth. Before this, Cognac was seen as a symbol of luxury and consumed “purely for its status aspect”, admits Cyril. “We have shifted now to consumption by choice, by taste preference, and knowledge is going up. You now see gifting much less, or not at all, and instead you’re seeing consumption either at home, or with friends in bars, or at restaurants because Cognac is still very much drunk during dinner in southern China.”

E‐commerce has also proved to be a burgeoning channel for Camus in China, representing between 15% and 20% of the company’s sales there, according to Cyril. The notion of an omnichannel is of great interest to Cyril, and his goal is to ensure Camus is available wherever and whenever consumers want to shop. To achieve this, three years ago Camus bought an e‐commerce platform in China, which it has used as its “testing ground to move into the omnichannel space”.

“The time of making the difference between online and offline is now obsolete, and this is probably one of our key challenges as a company, to succeed in our digital transformation and really capture the e‐commerce opportunity,” Cyril explains. “China is probably more ahead in e‐commerce than most countries, but what we’re learning there can slowly be applied in Europe as well, for example in France, where we started those initiatives about 18 months ago. Our Cognac is the number one selling Cognac online in France, so it does work.”

Mature outlook: Cognac maturing in barrels

GLOBAL DEMAND

There is clearly growing global demand for Cognac, and Camus is noticing interest for its products across the board. Last year, the BNIC reported Cognac exports had risen for a fifth consecutive year to reach the highest levels in both volume and value terms in the 12 months to 31 July 2019.

Two years ago, however, Camus’ estate was hit by adverse weather conditions that tore through the Cognac region. While the company’s Cognac inventory is well stocked for the coming years, Cyril says the effects will be felt further down the line.

“We lost about 60% of the yield from our harvest that year,” he says. “There was a very nasty hailstorm that ravaged the estate. The impact on us has reduced our ability to produce our single estate Borderies Cognac down the road. So we will see the impact anywhere from 10 to 15 years from now as we will have less XO to put on the market.”

However, the last time Camus faced such devastation to its harvest was in 1991, “so once in 18 years is not so bad”, he adds. “But still, it is very depressing to see your vineyards destroyed like this. “It is forcing us to concentrate the sale of our single estate Cognac mostly in duty free and in some key markets. So it’s a product we will not be able to sell everywhere over the long term.”

Like many producers in the Cognac region, Camus is carrying out research to see what can be done to protect vineyards in case similar climate effects occur again. “We are experimenting with more resistant grape varietals and with the way we actually manage the vineyards,” Cyril explains. “We are experimenting with protection against hailstones, and so on. We’re very much at the forefront of this. Weather such as hail is just one aspect of this, then there’s the increase of temperature, and also the drive from the entire Cognac region to produce in a much more environmentally friendly way. We’re striving towards what we call the high environmental value for vineyards, so reducing anything non‐natural.” Cyril believes the three elements combined will create a “much more predictable harvest in terms of quantity over the years”.

Though climate conditions are unpredictable, Cyril is certain Camus will remain a family‐owned brand through this generation and the next. “Independence is part of our DNA,” he says. “I do not see the company without independence. The brand is built around our values and the people around us. It’s not just the family, it’s the employees, it is our partner winegrowers. The brand would not be the same without this.”