COGNAC AND BRANDY UNDERSTANDING THE STORY
EXPORT GROWTH
Education is also something that is seen as a key factor in helping to drive further Cognac and brandy growth, but as Redin points out, there are different aspects to that education story. Not only is it educating consumers on Cognac and brandy drinking occasions, it’s also about helping consumers and retailers understand what the premium aspect to Cognac and brandy is. “There is still a long way to go in changing perception that brandy is not just for Christmas pudding and your nanna’s favourite tipple,” he said. “But we are steadily chipping away at it. Plenty of winemakers are having a go at distilling but are focusing on gin because of its immediacy in cash flow, and whisky because of its current popularity. It would be great to see a few more of these winemakers and distillers putting some boutique bottlings of brandy to barrel to assist in growing awareness and the category.” Kent agrees, adding, “The demographic of the brandy consumer in Australia has meant that there is strong support for mainstream brandy that is affordable and good quality. Demand for our premium products is strong at Christmas as the key seasonal period for brandy, however we see a huge opportunity for increasing demand of premium brandy year round with the reinvigoration of the category that attracts a new consumer engaging in craft Australian spirits and premium dark spirits in general.” Further Kent suggests that helping retailers and staff become more educated about the category and understand more about the different styles, price points and the premium nature will help with upselling and moving more stock. “Ensuring staff understand the key differences between products that justifies the difference in price is key to making the most of the Cognac and brandy trends and will help with cross-selling and up-selling. “Now is a great time to focus on staff training and to get the key suppliers to provide information that will help staff to engage consumers who are seeking more information on the category. Premiumisation will follow the same way in this market as others with support on education and understanding.”
According to the IRI data for 2017, the Cognac and brandy categories grew by close to $3 million in 2017, making the categories worth more than $100m. That growth is reflected in the export figures released by BNIC, which showed strong global growth in Cognac exports. Exports of Cognac saw a third consecutive year of growth in 2017 to reach the highest-ever levels in terms of both value and volume. The volume of exports increased by more than 10 per cent, while the value was up by 14 per cent with nearly 197.4 million bottles shipped in 2017 for a turnover of 3.15bn euros. Oceania, which incorporates Australia and New Zealand, saw above average growth for the year with the volume of exports growing by 13.2 per cent and the value increasing by 17.3 per cent. Each of the Cognac categories of VS, VSOP and older categories all saw growth, which was recognised by the President of BNIC, Patrick Raguenaud. “The great momentum we are experiencing today across all three categories can be explained by good results for Cognac in all of its markets, with varied consumption patterns,” he said. And while Australia hasn’t quite seen the levels of growth enjoyed in other markets, Redin believes that the pattern is there and it’s only a matter of time before the boom really hits here. “We are seeing Cognac booming overseas, particularly in the US and UK, where leading global brands are showing good growth signs and the cocktail culture has helped it to take hold. “As we saw with the whisky boom, Australia usually follows two to three years later so we are confident of an upsurge here and will be doing what we can as the leading brand to encourage this to happen.” Kent agrees, adding, “In Australia we haven’t seen as much uplift as in other markets around the world have seen, however we do have confidence that it will come”.
RETAILER OPPORTUNITIES Having a strong knowledge and understanding of the Cognac and brandy
Graham Buller, distiller at the Twenty Third Street Distillery.
Cognac XO must now be aged for 10 years.
A Martell Cooper shapes a barrel.
NATIONAL LIQUOR NEWS MARCH 2018 | 39