Spirit’s distillers seek deeper markets

MARTINNE GELLER

COGNAC: France’s centuries-old cognac houses are raising their bets on the US market with new products and campaigns to broaden the drink’s appeal beyond its African American stronghold.

The big four producers – LVMH Moet Hennessy, Remy Cointreau, Pernod Ricard and Beam Suntory – have turned more of their attention to the US after a drop in sales in China after an anti-graft campaign.

On its home turf cognac is seen as the drink of choice for mature gentlemen but in the US it is often enjoyed by status-conscious revellers inspired by hip-hop namedropping songs like Busta Rhymes’ Pass the Courvoisier.

Black culture’s taste for cognac, which comes only from the area around the western French town of that name, dates back at least to the time when US soldiers visited jazz- mad Paris bars during the world wars. Back home it was an alternative to American whiskey, often made in southern states with histories of slavery.

The African American community accounted for nearly twothirds of all cognac drunk in the world’s biggest market, say executives and analysts. Yet that’s now changing.

Producers of the drink, made by distilling white wine and ageing it in oak barrels for anywhere from two to dozens of years, now need to reach other groups.

“We don’t want cognac just to be for one category of person,” Remy Martin executive director Augustin Depardon said.

A new campaign featuring Hollywood actor Jeremy Renner, one of the stars of The Avengers, was aimed at a broader audience.

Hennessy, Remy Martin, Martell and Courvoisier make 85 percent of all cognac, and they are competing harder than ever, trying to harness the current boom in “brown spirits” like bourbon and rum.

Euromonitor forecasts US retail cognac sales of $5.2 billion (about R74bn) in 2015, up 9 percent from last year. That would see it surpass the Chinese market, which it estimates will have lost 36 percent of its value since a peak of $7.8bn in 2012.

The companies are also trying to push cognac into cocktails. To that end, Hennessy has launched Hennessy Black, which it says is better for cocktails as it has a delicate taste that eases mixability and a stronger alcohol content that can withstand dilution.

Despite efforts to broaden their market, the brands will be treading carefully so as not to alienate their core audience, having seen how quickly Cristal champagne fell from grace in 2006 after a boycott by hip-hop mogul Jay-Z, who is now a backer of Bacardi’s new cognac D’Usse. – Reuters