The global cognac & brandy market size was valued at USD 11.67 billion in 2021 and USD 12.66 billion in 2022. The market is expected to reach USD 18.17 billion by 2029 with a CAGR of 5.30% during the forecast period. The growing trend for consuming high-quality spirits is expected to propel the market course. The rising trend for cocktail culture at the time of various social events and festivities/occasions is expected to facilitate market development for cognac & brandy. Fortune Business Insights™ shares this information in its report titled “Cognac & Brandy Market, 2022-2029.”
COVID-19 Impact:
Decline in Demand for Spirits During Pandemic Led to Negative Market Growth
Due to the COVID-19 pandemic, the sale of products and profits declined. The prominent players in the market such as Remy Martin, Pernod Ricard, and Diageo faced a decline in their import and export activities due to strict government regulations imposed on the production and supply of alcoholic beverages. Shortage of manpower in production units and difficulties in the procurement of raw materials created a number of hindrances for the brewing industries. According to Remy Cointreau, sales were dipped by 1.4% during the year 2020-21.
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Segments
Super Premium to Dictate due to Increasing Demand from Millennials
Based on type, the market is divided into value, premium, high-end premium, and super premium. The super premium segment is anticipated to have the largest part due to rising demand from millennials to try new premium drinks, growing earnings, and a surge in socialization. As per the British Newspaper, the Guardian, the sales of super-premium spirits grew by 20% in 2022.
On-Trade Channel to Lead the Segment Due to High Reliance
On the basis of distribution channel, the market is categorized into on-trade and off-trade. On-trade channel is expected to have a major part due to customers’ reliance on “on-premise” consuming outlets to fulfill their demand for food and beverages. The off-trade segment is set to have the fastest growth due to increasing number of retail stores, supermarkets, and other online options along with easy accessibility of products.
Influence of Digitalization to Propel Market Progress
The influence of digitalization on the young population is anticipated to drive the cognac & brandy market growth. Online social media sites such as Facebook, Instagram, and YouTube have increased in recent few years and created a modern environment in which Gen Z and young adolescents are present. Moreover, numerous other studies have stated that majority of adolescents and the Gen Z population (approximately 36%-96%) display alcohol-related pictures on Facebook. For instance, in June 2022, Pernod Ricard announced the launch of its latest “digital label system”, which will educate consumers about the purchased products and promote responsible drinking for a better future.
However, increasing awareness regarding the consequences of excess consumption of alcoholic drinks is expected to impede the market growth.
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Regional Insights
North America to Lead Market Share Owing to Demand for Artisanal Spirits
North America is expected to lead the cognac & brandy market share due to demand for artisanal spirits and increasing number of craft distilleries in the region, which is anticipated to drive the market growth. Increasing levels of population and rising demand for distilled spirits in the U.S. and Canada in the region are expected to drive market growth.
Asia Pacific is set to have the second-largest region due to the rising demand for locally produced brandies. In January 2021, Paul John Distillery developed a new brandy called Paul John XO Grape Brandy, which is prepared from locally grown Indian grapes.
Europe is set to have steady growth due to increasing number of food service chain outlets that offer variety of spirits. Moreover, there is a trend of healthy lifestyle and consumers seeking such beverages made from natural botanical ingredients and fruit flavor blends.
Competitive Landscape
Collaboration Strategies by Key Players to Push Market Development
The market has various key cognac & brandy players who have increased their production of spirits. The market has Remy Martin, Pernod Richard, and Hennessey LVMH as huge players. There are inventions and new product launch with the assistance of collaboration strategies to attract a vast customer base, thus improving revenue. In October 2022, Fortnum & Mason collaborated with Frapin single-family estate for launching their own cognac “Hors d’ Age”. This new cognac has been made to be enjoyed neat and can be paired with rich chocolate desserts or baked apple.
Key Industry Development
September 2022- Tilaknagar Industries announced the launch of its new brandy, under its flagship brand, Mansion House. The Mansion House Reserve French Style Brandy is prepared from the “Ugni Blanc” grapes which are handpicked from the Sahyadris in India.
List of Key Players Profiled in the Report
- Remy Martin (France)
- Hennessy LVMH (France)
- Pernod Ricard (France)
- Radico Khaitan Ltd. (India)
- Naud Spirts & Distillery (France)
- Emperador Distillers Inc, (Philippines)
- Suntory (Japan)
- Meukow Cognac (France)
- Thomas Hine & Co., (France)
- Maison Ferrand (France)
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