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Cognac producers target US as Chinese sip less
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FRANCE’S centuries-old cognac houses are raising their bets on the US market with new products and campaigns to broaden the drink’s appeal beyond its African American stronghold.
The big four producers — LVMH Moet Hennessy, Remy Cointreau, Pernod Ricard and Beam Suntory — have turned more of their attention to the US following a drop in sales in China after an anti-graft campaign.
On its home turf, cognac is seen as the drink of choice for mature gentlemen, but in the United States it is often enjoyed by status-conscious revelers inspired by blingy bottles and hip-hop name-dropping songs like Busta Rhymes’ “Pass the Courvoisier.”
Black culture’s taste for cognac, which only comes from the area around the western French town of that name, dates back at least to the time when US soldiers were visiting jazz-mad Paris bars during the world wars. Back home it was an alternative to American whiskey, often made in southern states with histories of slavery and racial segregation.
The African American community accounted for nearly two-thirds of all cognac drunk in the world’s biggest market, say executives and analysts. Yet that’s now changing.
Producers of the drink, made by distilling white wine and aging it in oak barrels for anywhere from two to dozens of years, now need to reach other groups to help fill the space left by China.
“We don’t want cognac just to be for one category of person,” Remy Martin Executive Director Augustin Depardon said during a visit to France’s Cognac region, where over 75,000 hectares of vineyards grow mostly Ugni Blanc grapes that become the building blocks of cognac.
Depardon said a new campaign featuring Hollywood actor Jeremy Renner, one of the stars of The Avengers, was aimed at a broader audience.
Hennessy, Remy Martin, Martell and Courvoisier make 85 percent of all cognac, and they are competing harder than ever, trying to harness the current boom in “brown spirits” like bourbon and rum.
“We’ve seen a lot of our cognac competitors be more aggressive in the United States, actually investing in media campaigns on a scale we’ve never seen before,” said Jean-Baptiste Rivail, Hennessy’s director of business development for the Americas.
“The momentum of Hennessy and brown spirits has attracted quiet players to play harder in the US market.”
One of the quiet players is Pernod Ricard’s Martell, which at 300 years old, is cognac’s elder statesman. After pushing hard in China to become the leading player there, the brand is now trying to lift its 2 percent share of the US market.
“It is going to be our priority Number One,” said Christophe Pienkowski, Martell’s international heritage brand ambassador.
Cognac suppliers sold 4.1 million 9-liter cases in the US last year, according to the Distilled Spirits Council of the United States, up 11.9 percent from 2013, which only saw a 3.7 percent gain.
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