Market research: how and why Cognac exports reached all-time high

The market for Cognac is booming. Never before have so many Cognac bottles been produced and exported. The 200-million-bottle milestone was reached for the first time this year. In today’s article we’d like to deliver you some market research insights that we compiled from different sources, including a quite unusual one: a study by French customs. The latter proves that market research can (and should) be done using sources from many different horizons.

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Market research : facts and figures about Cognac

The export of Cognac has never been so successful as in 2018. Here are a few facts :

• 203 millions bottles have been exported between april 2017 and april 2018 ; in 1998, slightly more than 100 millions had been exported
• The number 1 export market for cognac is the United States (44% of the production) which represents  860 millions Euros in value
• 98% of the cognac produced is exported : it’s far more than Bordeaux Wine (42%) and Champagne (57%)
• In 1960 only 42 millions bottles were produced and that figure had grown to 136 millions in 1994 thanks to exports to Japan
• Nowadays 80% of Cognac is produced by 4 companies : Hennessy (LVMH), Martell (Pernod Ricard), Rémy Martin (Rémy Cointreau) and Courvoisier (Suntory)
• the TOP10 export destinations represent 89.6% of all exports (and therefore about the same percentage of the production since almost all cognac produced gets exported)

The insights above have been compiled using different sources (see below for a list)

Evolution of cognac exports since 1998 (in millions of bottles). Source : BNIC

Shipments of cognac to the top 10 importing countries (in millions of bottles)

Why has Cognac become so popular?

Cognac was already very popular in Asia in the 1980’s but the asian crisis of the late 1980’s hit Cognac producers very hard. For instance exports to Japan decreased 37% between 1989 and 1994, a loss of 10 millions bottles alone for this country. In total 30 millions were “lost” between 1989 and 1994 because of the crisis.
The real growth came however from Afro-americans who, after World War II discovered cognac which became their favorite spirit, replacing Bourbon which had too much of a WASPy flavor.

US Rappers gave cognac a big boost when they started showing the spirit in their clips and even naming songs after it (“Cry, who needs sorry when there’s Hennessy ?” by Kanye West and the famous “Pass The Courvoisier” by Busta Rhymes).

Sources :

• La crise du cognac des années 1990
• French customs

By Pierre-Nicolas Schwab Pierre-Nicolas est Docteur en Marketing et dirige l'agence d'études de marché IntoTheMinds. Ses domaines de prédilection sont le BigData l'e-commerce, le commerce de proximité, l'HoReCa et la logistique. Il est également chercheur en marketing à l'Université Libre de Bruxelles et sert de coach et formateur à plusieurs organisations et institutions publiques. Il peut être contacté par email, Linkedin ou par téléphone (+32 486 42 79 42)