Cognac exports grow as US demand stays strong

Rapid growth in North America has bolstered Cognac shipments in 2014/15, but exports to Asia have continued to fall in line with XO expressions.

Cognac exports have grown in 2014/15 as US demand stays strong, according to new data

According to data released by the Bureau National Interprofessionnel de Cognac (BNIC), between 1 August 2014 and 31 July 2015, Cognac shipments grew 5.9% by volume and 9.4% in value to 164.7m bottles and a turnover of €2.4bn.

“The growth in shipments during the 2014-2015 campaign confirms the forecast announced by the professionals as part of their business plan, consolidating the vision of the Cognac industry,” the BNIC said in a statement.

Driven by “good results” in the US, volume exports grew 15.5% in North America, and value sales soared by 31.6%, with 63m bottles shipped to the region in the last 12 months.

Meanwhile, shipments to Europe remained somewhat flat, falling 2.2% by volume and growing 0.5% in value to 49m bottles.

However, the BNIC said these figures represent a “newfound stability” in Europe, as “recovery” in the Western part of the region partly offsets “difficult economic and geopolitical” conditions in the East.

In particular, Russia has been greatly affected by currency turbulence and its conflict with the Ukraine.

Shipments to emerging Cognac markets also reported solid growth in the year, with South Africa and Australia jointly growing 16.4% in volume and 34% in value.

“Added together, these new areas of opportunity now account for over 6% of total volumes shipped, more than 10 million bottles,” the BNIC said.

However, the category continued to struggle in its key Asia market, where volume exports fell 0.3% and value exports dropped 5.8% to 49m bottles. The BNIC said this was an “improvement” compared with much more substantial declines in 2013/14.

In terms of categories, VS Cognac grew 8% by volume and 21.5% in value due to demand in North America and now accounts for almost half of all Cognac shipments.

VSOP showed “significant improvement” with 8.9% volume growth and 13% value growth, however shipments of XO expressions dropped starkly, 11.5% by volume and 4.3% in value.

While leading Cognac producers have struggled in recent years, predominantly due to China’s long-running austerity measure, analysts have predicted a return to growth in 2015.