Cognac continues to represent one of the more exciting sements of the beverage alcohol industry, a high-profile, high-image category that appeals to the upscale tastes of a growing niche of American consumers. The top-tier of brandies in terms of price and profitability, cognacs continue to benefit from a healthy U.S. economy that has provided more discretionary dollars for those consumers who want their drinks to project a little extra prestige and sophistication. In fact, in the control states, cognac sales tacked on another 13.2% through the 12 months ending June 1998, according to Adams Business Media research, with all the major brands showing increases. The leading brand, Hennessy, from Schieffelin & Somerset, increased 21.5% through June 1998 in the control states.

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Nationwide, according to the authoritative Adams Liquor Handbook 1998, the top cognac brands grew by 10.6% from 1996 to 1997. Hennessy, which represents almost half of all cognac sales in the U.S., grew by more than 16%, with Courvoisier, the number two brand, showing growth of 5% and Rémy Martin, in the number three position, up by 15.4%. And the total brandy/cognac market saw its nationwide sales increase by 2.6% in 1997, to reach more than 7.7 million cases nationwide.


Cognac suppliers agree that their success is a direct result of the consumer desire for premium products. “There is a whole trend in brown spirits of exploration and connoisseurship,” said Liz Sorota, senior brand manager for Hennessy at Schieffelin & Somerset. “Consumers with sophisticated palates are looking for new experiences.”

Schieffelin & Somerset’s newest cognac products, three single-distillery cognacs (called Lepeu, Izambard and Camp Romain, with suggested retail prices of about $47 to $49) take advantage of this experimentation trend at the upper-end of the spirits market. Sorota pointed out that the single-distillery concept is very similar to the idea behind single malt Scotch.

Domecq Importers is already positioning itself for Year 2000 with the recent introduction of Courvoisier Millennium Cognac.

Several other suppliers are also introducing new cognac brands. Domecq Importers launched a new Courvoisier product, Millennium, in September. To be retail-priced between $39 and $49, the brand is meant to mark the Year 2000. It is positioned above Courvoisier’s VSOP product and is “very celebratory in nature, a very good gift-giving item,” according to Marc Birnbaum, Courvoisier’s marketing director.

Meanwhile, Rémy Martin is launching Rémy Martin 1738 Accord Royal. Set to retail for approximately $70, the product and its packaging are based on the cognac style of the 18th century.

Unlike most other cognac brands, whose VS, or least upscale product, accounts for the bulk of their sales, Remy Martin’s VSOP, the mark above VS, is its flagship grade. “When you hear that Rémy is doing well, it means premium cognacs are doing well,” said Hilary Peck, director of marketing at Rémy Amerique.

Indeed, upper-end cognacs are doing so well that Rémy Martin has launched a new product size for its famous Louis XIII, which retails for approximately $1,200 for a 750 ml bottle. The new size, a 1.75 Baccarat crystal decanter with a neck collar of 24-carat gold, sells for $2,500. “And it’s already back-ordered,” reported Peck. “There has been a tremendous amount of interest.”

Other suppliers are entering the cognac market or are paying new attention to their cognac brands. Among the new entrants is Shaw-Ross Importers, which acquired marketing responsibility for Davidoff cognacs this past June. “Cognac,” said Phil Consolo, Shaw-Ross’s director of marketing, “is an exciting category, with a growing premium segment, and we are thrilled to be associated with the Davidoff name, which is so linked to superpremium products.” The company is marketing Davidoff Classic, which retails for about $59.99, and Extra, at $159.

Schieffelin & Somerset’s Hennessy Cognac is using this festive p-o-s for the holidays.

Meanwhile, Larry Kass, group marketing manager for whiskies, brandies and cognacs at Heaven Hill, reported that Ansac cognac, once a “sleeper product” for the company, is doing “very well. And we’ve started to invest in the brand,” he said.

Even some of the biggest brands in the cognac market are beginning to sit up and take notice of the growing interest in the spirit. “For a few years, we didn’t pay attention to the brand,” said Domecq’s Birnbaum of Courvoisier. Last February, the brand launched its first advertising campaign in three years, “Welcome to the state of Courvoisier.” It also updated the packaging for both its VS (in March) and VSOP (in June) products. And Seagram Americas is set to launch a global ad campaign for Martell Cognac at the end of the year.


Cognac has two markets: one upscale, where connoisseurs are willing to pay top dollar, and the other — and far larger — for the brands’ less upscale offerings. Most brands, for instance, report that the bulk of their sales are at the VS level.

Perhaps the biggest difference between these two markets is in how the spirit is consumed. “VS is mainly mixed, especially with Coke,” reported Laurent Martell, category manager for Martell at Seagram Americas.

Many cognac brands, therefore, focus on mixability. “A lot of the market is drinking [Hennessy] as a premium spirit, with soda, in a Sidecar, with Coke,” said Schieffelin & Somerset’s Sorota. “This market has been in existence for some time and is growing. And it is all focused on VS.” Hennessy will continue to focus on the mixability of its VS brand with its newest advertising campaign, which is entitled “Appropriately Complex.”

Rémy Martin debuted a new “Only Rémy” ad campaign and is following through on the theme in its holiday in-store merchandising materials.

Likewise, Rémy Martin is continuing its “Rémy Lounge” campaign, which focuses on the mixability of its cognac, especially in branded versions of classic cocktails, such as the Metropolitan and the Stinger. “People like branded cocktails because they are premium, they are expensive, and they are different,” said Peck. “They don’t want to do things the way everyone else does them.”

Many cognacs are also focusing on younger consumers — and consumers who are new to their spirit in general. Seagram’s Martell is launching a marketing campaign based on rhythm-and-blues music, for example. “Before, we targeted people in their 30s and above,” said Martell. “We also want to target younger consumers, ages 21 to 30.”

In addition, Rémy Martin, with its largest marketing budget ever, is working on a number of different fronts. These include launching a 100 ml flask size of its VSOP for about $5.99, and its new “Only Rémy” ad campaign, as well as sponsorship of its “Tastemaker Series,” a showcase of independent films and theater running in selected markets. “The Tastemaker Series is a way to reach people who are generally very elusive consumers,” said Peck. “Everything is about reaching new consumers and maintaining relationships.”

Of course, cognac suppliers continue to focus on the traditional after-dinner snifter crowd, still the backbone of the segment. And with the holiday selling season upon us, it’s a good bet that many of those consumers will help drive cognac sales onward and upward.

Cheryl Ursin is a regular contributor to Beverage & Food Dynamics and Cheers. Her writing has also appeared in The New York Times and other publications

Brandy Versus Cognac

At its most basic, brandy is a distilled spirit made from wine or a fermented fruit mash. The same is true for cognac. The difference between brandy and cognac, then, starts with the country of origin: By law, “cognac” can only come from the Cognac region of France, about 100 miles north of Bordeaux, while brandy is produced around the world. Hence the expression, “All cognac is brandy, but not all brandy is cognac.”

Cognac has historically been thought of as superior to all other brandies. It is distilled only from wine made from grapes grown and harvested within the Cognac region — which possesses a unique combination of soil, climate and other geographical conditions. The subsoil in Cognac is chalky; the more chalk, the more suitable are the wines produced to make cognac. French law declared in 1936 that wines used to produce cognac be made from Folle Blance, Saint-Emillion (also called Ugni Blanc) and Colombard grapes, with up to 10% permitted to be made from other white grapes. Cognac can receive no less than two-and-a-half years of barrel aging, but the vast majority of cognacs age for much longer periods, with the best XOs maturing for two decades or more.

Cognac’s cousin, armagnac, is actually France’s oldest brandy, dating back to the early 1400s and predating cognacs by 200 years. Armagnac differs from cognac in a number of ways, the most notable being a single distillation.

The “armagnac” label means that the liquid is a blend of brandies from two or three sub-regions of the Bascony region of France. Only white grapes are permitted in making the wines for distillation, and the predominant grape (as with cognac) is called Saint-Emillion.


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