Cognac Market size is set to grow by USD 897.31 million from 2023-2027, Rising awareness of health benefits of cognac boost the market, Technavio (2024)

NEWYORK, July 18, 2024 /PRNewswire/ --Theglobalcognac marketsize is estimated to grow byUSD 897.31 million from 2023-2027,according to Technavio. The market is estimated to grow at a CAGRof about3.64% during the forecast period. Risingawareness of health benefits of cognacis driving marketgrowth,with a trend towardsconsumption of cognac withfood or as co*cktail mix. However,growing competition fromother alcoholic beverages poses a challenge. Key marketplayers include Bacardi Ltd., Branded Spirits Ltd., CAMUS LA GRANDEMARQUE SAS, Cognac Meukow, Delord Freres SA, KELT InternationalSARL, Louis Royer SA, LVMH Moet Hennessy Louis Vuitton SE,Maison Delamain, MAISON FERRAND, Pernod Ricard SA, Remy CointreauSA, Suntory Holdings Ltd., Thomas HINE and Co., and Zino DavidoffSA.

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Market Driver

Cognac is a versatile drink with a wide range of applications.It can be enjoyed neat, on the rocks, or diluted with water.Additionally, it is commonly used as a mixer in various co*cktailssuch as Sidecar, B and B, Horses Neck, and Brandy Alexander. Brands like Hennessy andMeukow are popular choices due to their quality and versatility.Hennessy Black, in particular, ismarketed as a mixable brandy with a delicate taste and high alcoholcontent, making it ideal for co*cktails. Consumers seek uniqueexperiences and are moving away from traditional beverages likebeer towards co*cktails. This trend is driving the growth of theglobal cognac market, particularly in countries like the US wherecognac is perceived as a status symbol. The increasing popularityof cognac-based co*cktails in restaurants and bars is expected tocontinue, contributing to the market's growth during the forecastperiod.

The alcohol market, including cognac and other alcoholic brands,continues to trend with consumers seeking premium experiences.Brands like Hennessy and Torres lead the way, while online websitesand restaurants cater to alcohol-oriented communities.Health-conscious consumers are also exploring non-alcoholicbeverages and RTD co*cktail mixers. The Future Drinks Expo showcasesinnovative products like the Distell brand's non-alcoholic spirits.Renewable energy sources, such as wind farms from Dulacca, Karara,Flender, Moventas, Wind Prime, Dobele Wind Farm, Innergex RenewableEnergy, Boswel Spring Wind, and Planetary gearboxes from DanaMotion Systems and Stork Gears, are powering the production ofalcoholic beverages. Millennials prefer higher alcohol by volume(ABV) in their very special Under Larsen brand cognac, distilled incopper pot stills. Craft beverages, including premium alcoholicliquors and fruit juice base spirits, fuel co*cktail culture forsocialization in restaurants and bars.

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MarketChallenges

• The cognac market faces challenges from increasing competitionwith other alcoholic beverages such as vodka, rum, and whiskey.This competition is particularly significant in certain regionslike Germany, France, Italy, Russia, Belgium, and Sweden, where the demand for these alternativebeverages is rising, negatively impacting cognac sales. InAsia Pacific, China is a significant market for alcoholicbeverages, but the popularity of Baijiu and consumer preference forbeer over spirits pose challenges for cognac growth. To sustain andexpand in this competitive market, cognac manufacturers must focuson innovative marketing strategies and product development.
• The cognac market faces unique challenges in the currentbusiness landscape. Millennials prefer lower alcohol by volume(ABV) options and seek authentic experiences, favoring craftbeverages over mass-produced spirits. Copper pot stills are used todistill very special distilled spirits like cognac under the Larsenbrand. Double Toasted cognac, made from white grapes, is a premiumalcoholic liquor gaining popularity. Pandemic phase has led to ashift in sales of liquor from restaurants and bars to retailsectors and online shopping platforms. Bacardi India and otherbrewing industries capitalize on the drinking culture, with a focuson health-imparting properties of premium spirits. Super-premiumspirits like Bardinet, Barista co*cktails, Quintessence, Revelation,and Grand Marnier brand are in high demand. The spirits industrygrapples with the changing consumer preferences and productionchallenges. Premiumization, co*cktail culture, and socializationcontinue to drive sales. The ProWine trade fair showcases thelatest trends and profit outcomes for premium spirits. Gen Z andyoung adolescents are exploring new flavors, with fruit juice basesgaining traction. The spirits industry remains resilient, adaptingto market shifts and consumer demands.

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Segment Overview

This cognac market report extensively covers market segmentationby

1. Distribution Channel
   • 1.1 Off trade
   • 1.2 On trade
2. Product
   • 2.1 VS
   • 2.2 VSOP
   • 2.3 XO
3. Geography
   • 3.1 North America
   • 3.2 APAC
   • 3.3 Europe
   • 3.4 South America
   • 3.5 Middle East andAfrica

1.1 Off trade- The Cognac market is a significantsector in the global spirits industry. Producers in the Cognacregion of France create thisdistinctive brandy using specific grape varieties and distillationtechniques. Export is a key driver for the market's growth, withmajor markets including the US, China, and the UK. Brands like Hennessy,Martell, and Remy Martin dominatethe market due to their long-standing reputation and high-qualityofferings. Producers focus on innovation, such as limited editionsand collaborations, to attract consumers and maintain marketshare.

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Learn and explore more about Technavio's in-depth researchreports

The global beer market is experiencing steady growth, driven byincreasing consumer demand for craft and premium beers. Key playerssuch as Anheuser-Busch InBev, Heineken, and Carlsberg dominate themarket, leveraging innovative flavors and marketing strategies. Therise in disposable income and changing lifestyle patterns arefueling market expansion. Additionally, the growing trend ofhealth-conscious drinking is leading to the development oflow-alcohol and non-alcoholic beers. Asia-Pacific and North America are significant regionscontributing to the market's growth, with emerging marketsproviding new opportunities for expansion.

Research Analysis

The Cognac market is experiencing a resurgence, particularlyamong Millennials who are rediscovering this very special distilledspirit. With an alcohol by volume range of 40-60%, Cognac is apremium alcoholic liquor produced exclusively in the Cognac regionof France. The traditionalproduction process involves distilling white grape wine in Copperpot stills and aging in oak barrels. New trends in the marketinclude Double Toasted cognac, which undergoes an additionaltoasting process for a richer flavor. The craft beverage industryis also influencing the Cognac market with innovative offerings.The spirits volume consumption is on the rise, driven by co*cktailculture and socialization in restaurants and bars. Premiumizationis another key trend, with consumers willing to pay a premium forhigh-quality Cognac. Meanwhile, the renewable energy sector ismaking strides in the production of Cognac. Companies like Flender,Moventas, Wind Prime, Innergex Renewable Energy, Boswel SpringWind, and others are investing in wind farms, such as Dobele WindFarm, Karara Wind Farm, and Dulacca Wind Farm, to power theirdistilleries and reduce their carbon footprint. Cognac remains asymbol of luxury and sophistication, appealing to those seeking aunique and memorable drinking experience.

Market Research Overview

The Cognac market is experiencing a resurgence, driven by themillennial demographic and the growing trend towards craftbeverages and premium alcoholic liquors. With an alcohol by volumerange of 40-60%, cognac is a distilled spirit made primarily fromwhite grapes. The production process involves fermenting the grapejuice and then distilling it in copper pot stills. The market forvery special cognacs, such as Double Toasted and those under theUnder Larsen brand, is seeing significant growth. The spiritsvolume consumption is on the rise, fueled by co*cktail culture andsocialization in restaurants and bars. Premiumization is a keytrend, with sales of liquor in the super-premium spirits categorydriving profit outcomes. The brewing industries and retail sectorsare also embracing cognac, with online shopping platforms andalcohol-oriented communities playing a growing role in the market.The pandemic phase has accelerated this trend, with more peopledrinking at home and exploring new alcoholic brands like Bardinet,Barista co*cktails, Quintessence, Revelation, and Grand Marnier. GenZ and young adolescents are also entering the market, with agrowing interest in alcohol-related content and health-impartingproperties of cognac, such as its anti-inflammatory,antidepressant, and anti-aging potential. The spirits industry isresponding with new product offerings, such as non-alcoholicbeverages and RTD co*cktail mixers, and the ProWine trade fair is akey platform for showcasing these innovations. Meanwhile, the windenergy sector is also making headlines, with companies like BacardiIndia, Dana Motion Systems, Moventas, Wind Prime, InnergexRenewable Energy, Boswel Spring Wind, and Planetary gearboxesinvesting in renewable energy to reduce their carbon footprint andmeet growing demand for sustainable production methods.

Table of Contents:

1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation

• Distribution Channel
• • Off Trade
  • On Trade
• Product
• • VS
  • VSOP
  • XO
• Geography
• • North America
  • APAC
  • Europe
  • South America
  • Middle East And Africa

7 Customer Landscape
8 Geographic Landscape
9 Drivers, Challenges, and Trends
10 Company Landscape
11 Company Analysis
12 Appendix

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