The global cognac market, valued at US$ 5.5 billion in 2022, is projected to reach US$ 10.2 billion by 2032, growing at a compound annual growth rate (CAGR) of 6.4%. This growth is driven by the rising demand for premium alcoholic beverages, particularly among millennials, and the increasing popularity of craft spirits and brandy-based cocktails. The market benefits from cognac’s exclusivity, as production is limited to the Cognac region of France, ensuring high-quality, region-specific products. Key trends include the surge in experiential drinking, the growth of digital commerce, and the adoption of cognac in food service chains for innovative cocktails. Challenges include the high cost of premium cognac, health concerns related to alcohol consumption, and supply chain disruptions caused by the COVID-19 pandemic.

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Market Analysis

The cognac market is propelled by the global shift toward premium liquor, driven by millennials’ preference for high-quality, experiential drinking. Cognac’s unique production, restricted to the Cognac region, enhances its appeal as a craft spirit, with VS (Very Special) and VSOP (Very Superior Old Pale) grades leading due to their accessibility and versatility in cocktails. The market’s historical growth and projected CAGR of 6.4% from 2022 to 2032 reflect increasing social acceptance of alcohol consumption in North America and Europe, alongside rising disposable incomes in emerging markets like China and India. The growing popularity of brandy-based cocktails in food service chains and the expansion of digital commerce channels further drive demand. However, high prices and health concerns among consumers limit accessibility, while cheaper substitutes pose a competitive threat.

Segment Analysis

The cognac market is segmented by grade, buyer type, distribution channel, and region. The VS grade dominates, holding over 50% of the market volume in 2022 with a CAGR of 6.8%, driven by its affordability and use in innovative products like Courvoisier’s Avant-Garde Bourbon Cask Edition. VSOP follows with a 6.7% CAGR, fueled by premium offerings like Altia’s Larsen VSOP Double Toasted. The off-trade distribution channel leads with over 55% volume share, as consumers prefer cost-effective purchases from liquor stores, while on-trade channels, including restaurants and pubs, grow at a 6.4% CAGR due to cocktail demand. Household and residential buyers dominate buyer types with a 6.1% CAGR, reflecting individual consumption trends. North America holds the highest revenue potential, while Asia-Pacific grows rapidly at a 4.0% CAGR.

Country-wise Insights

In the United States, the cognac market is projected to grow at a 4.9% CAGR through 2032, driven by strong export volumes (86.5 million bottles in 2018) and increasing interest among diverse consumer groups, including white Americans, due to targeted advertising. China’s market, growing at a 7.9% CAGR, benefits from a large consumer base and rising disposable incomes, with brands like Courvoisier experimenting with age-statement labels to boost appeal. The United Kingdom, with an 8.0% CAGR, sees growth driven by premiumization and cocktail culture in bars and restaurants. Asia-Pacific, particularly China and India, is a major hub due to expanding middle-class populations and a shift toward premium spirits, supported by innovative marketing strategies.

Key Players

• Jas Hennessy & Co. (LVMH)
• The Rémy Cointreau Group
• Courvoisier S.A.S
• Martell and Company S.A.
• Otard (Chateau de Cognac)
• Camus Wine & Spirits
• Thomas Hine & Co.
• E Remy Martin & C SASU
• Delamain
• ABK6

Strategic Outlook and Industry Trends

The cognac market is evolving with a focus on premiumization and innovation. Major players like Hennessy and Courvoisier are leveraging vertical integration and lifestyle events to enhance brand reach, while smaller players like Ferrand Cognac capitalize on craft spirit trends through virtual tastings and new blends like Renegade No. 3. The relaunch of Bisquit & Dubouché by Campari Group targets high-end consumers with modern packaging. Digital commerce is a fast-growing channel, offering interactive consumer engagement, while food service chains drive demand through brandy-based cocktails. Social media marketing is key to attracting new-age consumers, with brands emphasizing non-traditional imagery to reposition cognac as a versatile, modern spirit. As global demand for premium and craft spirits rises, the market is poised for sustained growth.

Segmentation of Cognac Market

By Grade

• VS (Very Special)
• VSOP (Very Superior Old Pale)
• XO (Extra Old)

By Buyers Type

• Household & Residential Buyers
• Institutional Buyers
• Restaurants & Pubs

By Distribution Channel

• Direct and Institutional Sales
• Modern Trade
• Convenience Stores
• Online Retailers
• Modern Grocery Retail Stores
• Specialty Stores
• Liquor Stores

By Region

• North America
• Latin America
• Europe
• East Asia
• South Asia & Oceania
• Middle East & Africa

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