For the fifth consecutive year, cognac exports have continued to grow in 2018-2019, reaching their highest level in volume and value. The period saw 211.1 million bottles shipped for 3.4 billion euros from Cognac. To support this growth, Cognac has secured the addition of 10,000 hectares (24,710 acres) of vineyards over the course of three years.
With exports accounting for nearly 98%, cognac has consolidated its development this year, with shipments growing by more than 2.5% in volume and nearly 6.9% in value. In total, 211.1 million bottles were shipped in 2018/19 with a turnover of 3.4 billion euros from Cognac.
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 exports, placing cognac at the top of the list of the major appellations.
Favourable Conditions for Cognac, led by the NAFTA Zone and the Far East
With 97.7 million bottles shipped during this period (+8.8% in volume and +17.6% in value), the NAFTA2 zone continues to grow (46% of shipments). The United States once again drives the dynamic growth with 94.3 million bottles shipped in the 2018/2019. The American taste for brandy 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 the Far East3 has stabilized at 60.0 million bottles, representing 28% of shipments (a small decline of -1.5% by volume and increase of 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 high-end 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 Eastern Europe5 (which is up by +4.2% in volume and 3.5% in value) offsets the decline observed in the overall European market. While the French market, the 5th largest market for cognac, is still growing (up +9.3% in volume and -23.8% in value), 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% in value respectively.
A Positive Outlook Continues in the Rest of the World
Growing shipments to areas with high potential (South Africa, Nigeria, Caribbean) are once again a focus, 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 7.0 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 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.