Cognac celebrates a strong 2017 as exports continue to grow.
For the third year running, Cognac exports grew in 2017, reaching their highest ever levels in both volume and value. These good results are despite the April 2017 frosts, which in the end affected production less than anticipated.
With nearly 98% of production exported, the Cognac appellation expanded its export markets in 2017, witnessing growth of more than 10% in volume and 14% value. In total, around 197.4 million bottles were exported this year, resulting in a turnover of €3.15 billion euros.
A dynamic performance across all markets, driven by the expansion of the NAFTA zone
With 86.1 million bottles exported in 2017, volumes rising 11.4% and value up 12.6%, the NAFTA[1] area has performed consistently well and continues to lead the way in Cognac exports (43.6% of exports). The USA continues to be Cognac’s largest market with 82.6 million bottles exported in 2017. ‘The historic presence and ongoing investment of our Houses/brands in the United States make the strong performance of Cognac exports to this market possible,’ explains Patrick Raguenaud, President of the Bureau National Interprofessional du Cognac (BNIC).
Over the same period, the growing exports to the Far East reached 56.9 million bottles (+11.3% in volume and +18.4% in value) further demonstrating the development in this region. (28.8% of total exports). The steady increase in shipments to the Chinese market remains an important factor in delivering these results – responsible for nearly 25.5 million bottles exported. The President of the BNIC says ‘This trend towards strong recovery illustrates the lasting appetite of the Chinese for Cognac, even in this period of market normalisation.’
Shipments in Europe have also grown with + 5.7% in volume and + 8.7% in value, equating to total shipments of more than 41.5 million bottles (21.1% of shipments). The recovery of Russia (+32.7% in volume) and the Baltic countries carries these postive results for 2017 ‘again testifying to the Russian attraction to the Cognac category’, notes Patrick Raguenaud.
BNIC FIGURES – COGNAC 2017 CAMPAIGN
[1] NAFTA: North American Free Trade Agreement (NAFTA), signed by Canada, the United States and Mexico in January 1994.
Development in the rest of the world remains important
The progression of exports in zones of strong potential (Africa, the Antipodes, etc) continued in 2017 both in terms of volume (+13.2%) and in value (+17.3%). In addition, these new areas of opportunity represent more than 6.5% of global volumes shipped, or nearly 12.8 million bottles.
Growth in shipments for VS, VSOP and Old categories
Accounting for half of all cognac shipments, VS cognac has consolidated its success in all markets, with volume growth of +8.6% and +15.4% in value. VSOP and older categories also continued their growth, increasing by +11.2% in volume and 14.3% respectively, and +11.1% and 17.1% in value. For the BNIC president Patrick Raguenaud, ‘the great momentum we are experiencing today across all three categories can be explained by good results for cognac in all of its markets, with varied consumption patterns.’
Production impacted by the April 2017 frosts
The climatic issues encountered over the period, mainly marked by the episodes of frost in April 2017, affected the 2017 production of cognac. With a total volume yield of 88.95hl vol./ha (compared with 101.94 hl vol/ha for the previous harvest), or a yield of 8.64 hl of pure alcohol (AP) per hectare, the distillation of the 2017 harvest should produce around 635,000 hl AP.
The available climate reserve, with a stock of 184,000 hl AP, will limit the impact of frost on the crop.
Christophe Forget, vice president of the BNIC, explains why the climate reserve tool was set up by the BNIC in 2008. ‘By creating a climatic reserve in years where there is the opportunity, the winegrower can compensate for a crop deficit. This tool provides an additional guarantee for the sector. It allows us, to a certain extent, to guard against the risks of climate related hazards that we have seen increase in recent years.’
Cognac professionals are confident in their future prospects and continue today to fully invest in the development of their sector and the quality of their products.
About the BNIC
The BNIC (Bureau National Interprofessionnel du Cognac) represents, fosters and protects the Cognac Appellation d’Origine Conrôlée in France and abroad. In the 160 countries where Cognac is sold, this AOC assures consumers a product of exceptional quality. With a membership that equally represents the agricultural and commercial interests of Cognac, the BNIC is the consultative and decision-making body for the 4,300 growers, 110 distillers and 280 négociants of the Cognac appellation.
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