Cognac Exports Continue To Grow For The Fifth Year In A Row

2018-2019 Campaign Report

News provided by

Bureau National Interprofessionnel du Cognac

Aug 19, 2019, 16:18 ET

COGNAC, France, Aug. 19, 2019 /PRNewswire/ -- For the fifth straight year, Cognac exports continued to grow in 2018-2019, reaching their highest levels ever in both volume and value. The period saw 211.1 million bottles shipped, with a value of 3.4 billion euros. In addition, Cognac secured the addition of 10,000 hectares (24,710 acres) of vineyards over the next three years.

Exports Still Growing in 2018/2019¹

With exports accounting for 98% of production, cognac has consolidated its development this year, with shipments growing by more than 2.5% in volume and nearly 6.9% in value. In all, 211.1 million bottles were shipped in 2018-2019, for a turnover of 3.4 billion euros. Cognac contributes significantly to the trade surplus of French wines and spirits. Representing nearly a quarter of the total value of French wine and spirits for export, it tops the list of major appellations.

Favorable Conditions for Cognac, led by the NAFTA Zone and East Asia

With 97.7 million bottles shipped in the period (an increase of +8.8% in volume and +17.6% in value), the NAFTA² zone continues to grow (46% of shipments). The United States once again drives this dynamic gain with 94.3 million bottles shipped in 2018/2019. The American taste for cognac is largely due to the long history of cognac in this market, consistent investments by the cognac houses and the popularity of cocktails in the US.

Over the same period, shipments to East Asia³ stabilized at 60 million bottles, representing 28% of shipments (–1.5% by volume and +1.8% by value). Producers and shippers in the Cognac sector remain confident about the significant potential for development in the region, driven by the Chinese market, and the appetite of a culture that appreciates the excellence of French know-how and the image of a top-quality product.

In contrast, shipments within Europe⁴ are down by –4.6% in volume and –6.4% in value, for a total of more than 39.4 million bottles. However, the strength of the Eastern European market⁵ (which is up by +4.2% in volume and +3.5% in value) offsets the decline observed in the overall European market. France, the 5th market for cognac, is still growing (up +9.3% in volume and –23.8 % in value), but Germany, in 6th position, and the United Kingdom, in 4th position (and traditionally the leading market the European Union), are down by –6.0% and –6.7% by volume and +5.2% and –4.1% by value respectively.

A Positive Outlook Continues in the Rest of the World

Growing shipments to areas with high potential (South Africa, Nigeria, Caribbean⁶) are once again a highlight, both in terms of volume (+12.3%) and value (+13.2%). The share of these new markets has increased three-fold over the last ten years. Moreover, these new areas of opportunity represent 3.3% of total volume shipped, or 7 million bottles.

Exports Increasing for VS and VSOP Categories

Shipments of VS⁷ (which represent 51% of Cognac shipments) and VSOP⁸ (nearly 38% of shipments) increased in volume by +5.7% and +0.4% respectively and in value by +12.7% and +7.8%).

Representing 11% of shipments, the older qualities category stabilized over the period with a decrease of –4.0 % in volume and –0.1 % in value.

An Integrated and Cohesive Plan for Planting 10,000 Hectares Over 3 Years

The Cognac sector is implementing a medium-term plan for 10,000 hectares of new vines, consistent with its shipping forecasts. Once these new vines are planted, the potential of the vineyard will be 86,000 hectares (212,510 acres) compared to 76,000 hectares (187,800 acres) today. This development complements the vineyard renewal⁹ actions already undertaken in the Charentes-Cognac production area.

This plan is the result of a collective effort by the winemakers and shippers of the Cognac appellation, as contained in their Business Plan, which provides foresight, and a long-term vision to manage the production needs of the sector in line with market forecasts.

About the BNIC

The BNIC (Bureau National Interprofessionnel du Cognac) represents, fosters and protects the Cognac Appellation d'Origine Conrôlée in France and abroad. In the 151 countries where Cognac is sold, this AOC assures consumers a product of exceptional quality. With a membership that equally represents the agricultural and commercial interests of Cognac, the BNIC is the consultative and decision-making body for the 4,260 growers, 120 distillers and 280 merchants of the Cognac appellation.

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2018-19 Campaign
¹ - August 1, 2108 to July 31, 2019.
² - Between the United States, Canada and Mexico, replacing the North American Free Trade Agreement (NAFTA) signed by these three countries in January 1994.
³ - China, Singapore, Hong Kong, South Korea, Malaysia, Taïwan, Thailand, Japan.

2018-19 Campaign
⁴ European Continent.
⁵ Eastern European market: Albania, Belarus, Bosnia Herzegovina, Kosovo, Macedonia, Moldava, Montenegro, Russia, Serbia, Ukraine.
⁶ Antigua and Barbuda, Saint Martin, Aruba, Bahamas, Barbados, Cayman Islands, Turks & Caicos, Cuba, Dominican Republic, Grenada, Saint Barthelemy, Haiti, Virgin Islands, Jamaica, Montserrat, Saint Christopher and Nevis, Saint Vincent the Grenadines, Saint Lucia, Trinidad and Tobago
⁷ Very Special.
⁸ Very Superior Old Pale.
⁹ The renewal of the vineyard is focused on actions of anticipated planting and that of replacement of the dead and missing vines.