Despite supply chain issues and product shortages, Cognac consumption reached 8.4 million cases on 24.5% growth in the United States last year, according to Impact Databank. No.-1 brand Hennessy grew 21.2% to 5.1 million cases, followed by Rémy Martin’s 50.6% jump to nearly 1.5 million cases and Courvoisier’s 20.9% rise to 707,000 cases. In fourth place is D’Ussé, which increased 47.1% to 548,000 cases, and Salignac takes the fifth spot, with a 4.7% bump to 177,000 cases. Of the top six brands in the U.S. market, Martell is the only one that declined, dropping 25.5% to 174,000 cases in 2020.
Category leader Hennessy continues to dominate, due in part to a growing interest in the spirit among millennial consumers, according to senior vice president of Hennessy U.S. Jasmin Allen. “Our business has remained incredibly resilient, with the first half of 2021 continuing to see sustained growth driven by strong demand in the off-premise and an accelerating rebound in the on-premise,” she explains. “Alongside Hennessy V.S.—whose H1 performance far exceeded 2019 levels—Hennessy VSOP Privilège and Hennessy X.O. continue to play an important role in the trend toward premiumization.”
Allen attributes Hennessy’s success to its focus on highlighting and supporting cultural diversity. This year, the brand launched the “Never Stop, Never Settle Society,” a new initiative that aims to ensure a more equitable landscape for Black entrepreneurs in the U.S. In addition, the brand released several special packages, including the Hennessy X.O. 49 commemorative cocktail set in celebration of the first Black and South Asian American vice president of the United States and a collaboration with artist Refik Anadol, who used data collected from observing the eau de vie selection process to create a limited-edition bottle design for the 2021 VSOP Privilège. “In 2022, we’ll continue providing consumers with immersive experiences that lean into Hennessy’s unparalleled craftsmanship and desire to educate consumers in an interactive manner,” Allen says. “We will soon announce a new platform that champions many perspectives in a way that’s uplifting and relevant to the social equality movement in the U.S.”
No.-2 brand Rémy Martin is taking a cultural approach with its marketing efforts as well. The Cognac house recently unveiled a partnership with Stephen Rodriguez, chef and owner of Chef Papi Inc., and Diana Dávila, owner of Mi Tocaya Antojeria in Chicago, to celebrate the Latinx tradition of “sobremesa,” a post-dining ritual during which guests remain “at the table” to enjoy drinks and conversation. Rémy Martin has also teamed up with the Michelin Guide to sponsor international events in 17 destinations across Europe, Asia, and America, as well as the newly created Michelin Green Star awards, which highlight restaurants at the forefront of sustainable gastronomy. These initiatives aim to increase Cognac’s, and in turn Rémy’s, presence in the on-premise. “Our marketing strategy is focused on recruitment as well as retention,” says Ian McLernon, president and CEO of Rémy Cointreau Americas. “We believe bringing new drinkers into Cognac is an important part of building our business for Rémy Martin.”
As consumers move from drinking at home back to the on-premise, they’re bringing a newfound affinity for experimentation with them, resulting in a change in Cognac’s occasionality. “We’ve seen an increased shift and preference toward mixology and cocktails,” McLernon says, pointing to Rémy Martin’s celebration of the Sidecar’s 100th anniversary in September. “The Sidecar has been phenomenally successful over the last few months, and we’ve also seen with the Manhattan and other classics that Cognac and Rémy Martin—particularly 1738—have a pivotal role to play.”
Digital Commerce Leads The Way
Another trend that has continued as the pandemic wanes is digital commerce, which can connect Cognac drinkers with brands in much more immersive ways than before. “We were an early adopter in this area, and during the pandemic, we dialed up our investment, which has paid back dividends,” McLernon says. “So digital commerce has created a big opportunity and certainly has been the fastest-growing channel for the category, and for Rémy Martin.”
Beam Suntory’s Courvoisier has also shown consistent increases over the past 12 months due in part to the brand’s investment in e-commerce, as well as the continued recovery of the on-premise sector, according to Susan Gibbons, North America senior director for the brand. “Year-to-date in 2021 we’ve seen continued sales growth in the U.S., and Courvoisier has contributed to a 12% boost for Beam Suntory in H1,” she adds. “We can attribute this success to an increase in consumer affinity for the Cognac category, especially in the U.S. We’ve also seen a greater demand for luxury spirits at every price point, which allowed Courvoisier’s premium portfolio of V.S., VSOP, and X.O. liquid to flourish.”
The brand focused its marketing efforts over the past year on philanthropic initiatives like the recently launched Foundation 1828, which provides financial and educational assistance to entrepreneurs in underserved populations around the world. “The effects of the pandemic disproportionately impacted Black and minority small-business owners in the U.S., which is an extremely important community to Courvoisier,” Gibbons says. “As a result, the brand sought action-oriented and meaningful ways to support this population.” Activations included a virtual pitch competition, in which the brand awarded $200,000 in grants to Black small-business owners, and a pledge to contribute $1 million to minority-owned small businesses over the next five years.
At No. 4, Bacardi’s D’Ussé has proven itself to be one of the fastest-growing Cognac brands since launching in 2015. “D’Ussé saw volume grow 31.1% year-over-year, while the category was growing by 2.8%, according to the latest Nielsen data,” says Jennifer Pisciotta, global vice president of marketing, acceleration brands, and innovation for Bacardi. “In addition, D’Ussé saw a 109% sales increase by the end of 2020. We hope to continue driving these trends by recruiting more consumers into the category.”
This year, those initiatives included a digital influencer campaign celebrating National Cognac Day on June 2 in partnership with Roc Nation and online events leveraging D’Ussé global brand ambassador Sullivan Doh to appear on rapper Fat Joe’s IGTV series and conduct a BET virtual greenroom cocktail class. “Additionally, as consumers spent more time fine-tuning their bartending skills, the movement to improve the overall cocktail experience led to a rise in premium alcohol sales,” Pisciotta notes. “Our hope is that this trend will continue beyond the home and into bars and restaurants.”
While Pernod Ricard’s Martell lost volume in the U.S., the brand is looking to reverse that trend with the launch of a new campaign and partnership with musician Janelle Monáe. Dubbed “Soar Beyond the Expected,” the initiative highlights Monáe’s passion for living life on her own terms and aims to inspire others to do the same, as well as promote Martell Blue Swift, the innovative expression that features VSOP Cognac matured in French oak casks and finished in Kentucky Bourbon barrels. “The investment being made into the brand by Pernod Ricard speaks to its growth potential,” says marketing director Devaunshi Mahadevia. “Cognac is the second-fastest-growing spirits category in the U.S., and Martell’s portfolio is perfectly poised to meet the increased consumer demand. We’re also seeing renewed interest in the premium sector by consumers, specifically with Cordon Bleu and Martell Blue Swift.”
Smaller Players Gain Steam
Another brand that’s hoping to capitalize on the premiumization trend is Ferrand Cognac. “During 2020, we put a strong focus on Cognac education to consumers through virtual tastings with stores and consumers,” says Guillaume Lamy, vice president of the Americas for Maison Ferrand. “It was a great year to take the time to explain our heritage and the Grande Champagne origin of Ferrand Cognac. Specific blends like our 10 Générations definitely spiked by the end of the year and generated real interest across the aisle from whisk(e)y and other premium brown spirits consumers.”
These efforts have resulted in a significant volume boost for the brand. “Ferrand is at a 31% growth in depletion on a 12-month rolling period,” Lamy says. “It seems that with the re-opening of bars and restaurants, Ferrand has been benefiting from both a high growth in retail sales and the resurgence of Cognac in beverage programs.” The house plans to continue this momentum with the release of a new blend called Renegade No. 3 by year-end.
Campari Group is also banking on the high end with this year’s relaunch of Bisquit & Dubouché (formerly Bisquit Cognac), which the company acquired in 2018 and serves as the first spirit in its new Rare division. “We’re invested in ensuring that the brand appear relevant to a multicultural audience,” says Julka Villa, global managing director and managing director of the Rare Division at Campari. “We consider Bisquit & Dubouché a disruptor brand—we want to shake up the traditional tropes of Cognac, starting with the packaging.” Featuring a sleek, contemporary bottle, metallic silver and black accents, and a bolder redesign of the brand’s griffin logo, the updated look combined with the premium price (the flagship VSOP is $59 a 750-ml.) targets Cognac consumers who seek to experiment with different brands, as well as high-end whisk(e)y and rum drinkers.
“At the moment, we’re in the process of re-introducing this iconic French heritage brand to the global markets—key areas of focus are China, the United States, and South Africa,” Villa says, noting an emphasis on California, Texas, and Florida in the U.S. “We are excited to announce our first brand partner before year-end, with plans for additional activations in the artistic space for 2022. We are also investing in local events and luxury partnerships in our core markets, focusing directly on reaching Cognac connoisseurs and key consumers in each of our target cities.”
Nyak, a new Cognac brand that entered the market earlier this year, is taking an even more unconventional approach. Developed by former Rémy Cointreau VP Patrick Charpentier and former Seagram’s exec Jerome Hyafil—founding partners of Miami-based Brickell Wines LLC—along with Detroit Equities CEO Dennis McKinley of Real Housewives of Atlanta fame, Nyak was made specifically for the African American community. “If you look at the current Cognac market, all of the leading brands have been created in the 17th and 18th centuries, and they haven’t been developed for this audience,” Charpentier explains. “I thought it was time for the category to get a brand that reflects the deeper DNA and culture of the African American market.” The name is a nod to the hip-hop slang term for Cognac, “yac,” and the brand emphasizes that connection by partnering with two well-known female rap artists, Young M.A. and Trina. “We want to show people how well-accepted Nyak is among the culture,” Charpentier adds.
Initially launched two weeks before the pandemic and then paused until April of this year, Nyak’s rollout has focused on Texas, Georgia, Tennessee, and Michigan—states where there’s a significant Cognac market and where the brand is able to get A-level distributors. The V.S. retails for $35 a 750-ml. and the VSOP is priced around $50. “By yearend we’re going to be north of 10,000 9-liter cases, and that’s in spite of an unpredictable supply chain,” Hyafil says. “Next year, we believe a conservative figure is 20,000 cases, and we have the supply for it. We believe the brand has huge potential and we just scratched the surface. We haven’t touched the key markets—California, New York, and New Jersey. So for the next three to five years, I say the sky’s the limit.”
Renewed Interest On-Premise
With bars and restaurants returning to pre-pandemic business levels, Cognac has the opportunity to reach even more consumers, and mixology is a large part of that strategy. “We believe the best area for growth in Cognac is cocktails,” reports the Bureau National Interprofessionnel du Cognac (BNIC). “Cognac has a storied history in American mixology, as it was used in the original classic cocktails.”
For the past two years, the BNIC has partnered with the all-female bartending competition Speed Rack and the digital platform VinePair to host the Cognac Connection Challenge and received more than 220 creative cocktail recipe submissions from bartenders all over the U.S. “I’ve noticed that people are starting to utilize Cognac all year round,” says Ivy Mix, co-founder of Speed Rack and owner of the Latin spirits-focused bar Leyenda in Brooklyn, New York. “For a long time, it was summer equals Tequila, gin, and vodka, and fall/winter equals brandy and whisk(e)y. So it’s been nice to see people using Cognac in different ways. With the work that Speed Rack did for the BNIC, I was introduced to the Cognac and Tonic, which is my favorite thing to drink.”
Brands that Mix likes to use include Ferrand, Rémy Martin 1738, and Hardy. “Hardy Cognacs are fantastic, and it doesn’t hurt that the brand is operated and made by a woman [fifth-generation house head Bénédicte Hardy],” she says. “It’s really elegant, super tasty, and not too austere. I feel like sometimes people think that Cognac is this very austere thing and it doesn’t have to be. Cognac is also fun.”
Though Leyenda specializes in Latin spirits, Mix says the bar does a lot of split-base drinks and is currently working on a cocktail that features Cognac mixed with Jamaican rum and Bourbon. “Cognac is really interesting because depending on how aged it is and its richness, Cognac can have a little bit of unctuousness, and it tends to elevate other spirits,” she explains. The Tavern at Hudson Yards in New York City also serves a split-base drink called the Death Avenue ($18), which comprises H by Hine VSOP Cognac, Diplomático Reserva Exclusivo rum, du Roulot l’Abricot apricot liqueur, Lustau Pedro Ximénez Sherry, Elisir Novalus Vino Alpine amaro, Infuse Sassafras bitters, and hickory smoke. “The Cognac gives the cocktail more backbone and really holds the rum together, along with the other key ingredients,” says Ryan Welliver, bar director at The Tavern. He adds that guests are becoming more informed about Cognac and are interested in trying different brands, such as Grateaud Essence des Borderies ($30 a 2-ounce pour).
Flavien Desoblin, owner of Brandy Library in New York City, notes a newfound curiosity about Cognac among his clientele as well. The category makes up 10% of spirits sales at the venue, which stocks roughly 57 different brands, and that percentage has remained steady in recent years. While cocktails like the Sidecar made with Rémy Martin VSOP ($22) and the Pods-de-Vie featuring Bache-Gabrielsen American Oak Cognac ($20) continue to be extremely popular at Brandy Library, Desoblin says sales of Cognac flights have increased significantly. The two flights that are ordered most often include the entry-level “Standards” ($45 for six ½-ounce pours) and the “Vintages” ($85), which features Jean Grosperrin 1989 26-yearold, Frapin 1994 24-year-old, Prunier 1992 20-year-old, Park Single Barrel Chai No. 8 Lot 1992-1994, Delamain 1981 30-year-old, and Fanny Fougerat “Le Laurier d’Apollon” 2010. “Vintages for Cognac are not a big thing, but people are interested in that flight,” he says. “It’s the limited-edition single malt Scotch kind of mentality that transpires.”
Desoblin believes the U.S. market is one that has yet to reach its full potential. “The U.S. is a very different country when it comes to appreciating Cognac,” he says. “The big guys are still trying to find out how they can tap into this new pool of consumers beyond drinkers of Hennessy V.S.”