Cognac Crazy
Reviewing the appeal of cognac within different duty-free markets, Chloe Gold talks to H Mounier to find out if there is a future for the category outside of Asia
While cognac in Asia has seen a boom in recent years, poor weather conditions affecting vineyards across different regions in France have affected production, slowing the flow of eaux-de-vie from grape growers. Feeling the pinch are leading cognac houses, which have had to temporarily suspend purchases of new eaux-de-vie, which has impacted on the travel-retail cognac business on a global scale.
Carole Frugier, marketing director of H Mounier, comments: “The duty-free sector is a very important part of the business, though from our figures that we have received from the bureau, it would seem that sales have slightly decreased over the past few months, not because people are buying less but due to a shortage of cognac in the region. This has led to some of the big companies decreasing their supply as they wanted to keep their eaux-de-vie for bigger markets.” Frugier adds: “Another factor is due to the increase in prices which is affecting the duty-free business – the figures are shipments from the cognac
region, not on the shelf.”
However, the cognac craze in Asia has meant that cognacs remain very much in-demand. “We’ve seen the biggest growth in the Asia market and made a good turnover so we’re happy about that. Other markets that are performing and increasing very fast within the worldwide cognac business are the Russian and Chinese markets, as well as other Asian countries. We are doing very well in the Chinese market and have an importer there not only for duty-free but on the domestic front, too.”
Frugier attributes H Mounier’s success within Asia to the status of the product and the growing Asian middle-class tastes for premium products from Europe. “It’s an aspirational brand and people want to be part of that dream. People like the French status of the product and the image that goes with that. As people are becoming richer, we are seeing a stronger demand for luxury European products.”
While the boom is most noticeable in the Asian market, there are signs that there is a very exciting future for the cognac sector outside of Asia as well. In recent years it has experienced a sudden rise in status and recognition levels through name-checks by celebrity hip-hop stars such as P Diddy, Busta Rhymes
and Eminem. This triggered a movement, particularly among US Afro-American and Hispanic communities, that pushed cognac to the forefront of global recognition as consumer awareness of leading cognac brands widened. This, in turn, has had a positive impact on duty-free sales. Currently, other potential cognac markets include India, which Frugier hopes will begin to develop more rapidly soon.
“India has potential but right now it is very difficult to enter this market as the taxes are so high and so the volume is small,” she explains. “The Indian market is still very new for us and we’ve only just found somebody to import the product there, but for it to really see a boost, taxes have to decrease. However,
we anticipate that when India does open up, it will uncover a plethora of opportunities, but as of yet I cannot say when that will happen.”
Of the H Mounier range, Prince Hubert de Polignac – its main cognac brand sold in travel-retail and in domestic markets – is showing no signs of diminishing in popularity. “We have the whole Polignac range in duty-free. The most popular ones are the VSOP and XO litre. The 750ml XO Grande Champagne is specifically dedicated to the duty-free sector and we are very proud of this product as we were elected the Best Cognac in the World. This product has won the famous ‘Cognac Trophy’ at the International Wine and Spirit Competition in London, and The Best Cognac of the Year 2007.”
In the duty-free environment, H Mounier believes in offering special services and exclusive promotions in the form of gift boxes and tasting shops where staff are on hand to educate and inform its customers
about cognacs.
“It is a very fast-moving sector with developments occurring all the time,” says Frugier. “We are focusing on our domestic and dutyfree markets and really to develop the sales of our luxury range – we are working on that very seriously.”
Speaking about its presence at the forthcoming TFWA Cannes exhibition, Frugier reveals: “We have been there for 20 to 25 years and look forward to being there again this year. We want to display our range of cognacs, with particular focus on the cognac VS, as we were awarded the Gold Medal Best in Class competition – the most important one. We want to capitalise on that and, of course, showcase our very good eaux-de-vie.”
Other leading cognac brands that are contributing to the ‘premiumisation’ trend are Courvoisier, Camus, Martell and Hennessy, which are focusing on the more premium categories, namely VSOP and XO. Recent launches include Hennessy’s new premiumcognac, Hennessy Diptyque, which is specifically
targeted at cognac connoisseurs and is expected to do very well.
Delicious
Digg
StumbleUpon
Facebook
