Rise in global acceptance of premium alcoholic beverages among millennials is expected to push the growth of cognac market during the forecast period. Exclusivity of cognac is a major factor influencing the growing popularity of crafts products. Also, Cognac production is strictly limited to its production region. Besides this, the grapes used to make cognac all come from the same region, and such products are influenced by the region’s soil.
Also, Alcohol consumption is a common trend during specific events and occasions in North America and Europe in recent years. Moreover, most employees prefer to enjoy a drink with colleagues and friends after work on Friday evenings. Also, similarly, students on campus have also been following a strong drinking culture.
The notion of cognac is an old concept to consumers and recent spike in demand for premium liquor experiences has disrupted the market. Moreover, this has opened up lucrative opportunities for cognac market in terms of both value and volume growth.
However, it will be fascinating to see how the major cognac brands continue to innovate and pave the way for new entrants to gain cognac market share.
Another trend that has persisted as the pandemic fades is digital commerce, which can link up cognac drinkers with brands in much more interactive ways than before. Digital commerce has created a huge cognac market opportunity and is undoubtedly the category’s fastest-growing channel.
Cognac market is heading towards consolidation
The Cognac market has witnessed some consolidation, with top players accounting for a substantial share of the market. Top five players in the market are the Rémy Cointreau Group, Jas Hennessy & Co., Courvoisier, Martell, and Otard (Chateau de Cognac), occupy nearly 75% of the market and is expected to continue to emphasize vertical integration.
Moreover, number of cognac producers is focusing on ‘non-traditional’ methods of producing and marketing their products. The main goal of this strategic move is to change the ‘pre-conceived’ image of cognac, which is either an ‘after-dinner’ drink or a status symbol.