The town of Cognac owes its prosperity to the spirit that takes its name, and is quite literally imbued with it. Around town, ancient and new buildings are shaded with a black must, indicating a near-by warehouse filled with casks of cognac quietly aging and wicking away the so-called “angel’s share,” that part of the spirit that evaporates as it takes on color and character. The angel’s share also causes the peculiar black mold, found near the many storage houses in town.
In Cognac’s narrow, cobbled streets, spirited aromas of cinnamon and clove fill the air, even as trucks rumble through town. One of these sleek vehicles pulls into the courtyard of an ancient castle owned by Otard. It looks to be delivering fuel oil, but as the driver hooks up a hose from the back of the truck, it turns out the hose is suctioning out aged cognac from casks stored in dank caves below the castle for bottling at the modern plant down the road.
It’s an apparently contradictory image, but fitting, as cognac may be the most contradictory spirit made. Its has an enviable, powerful image that may simultaneously be hindering consumption growth, it is under-appreciated in a country whose rigorous rules have guaranteed its quality, and while other brown goods are fighting rear-guard actions to maintain share of market, the top three brands (Hennessy, Courvoisier and Remy Martin) have increased US sales by nearly 65% since 1995, according to the Adams Business Media Handbook Advance.
While tequila is treasured in Mexico, and Scots around the world adhere to their favorite tipple, cognac commands little respect at home. Even the best restaurants in Cognac must be prepared to allow demanding French guests to select their preprandial drink from a spirit cart filled only with Scotch. It’s the equivalent of a Napa valley restaurant touting Australian, or worse, Sonoma county wines.
While France has increasingly become an important market for Scotch and bourbon makers, the country consumes only 5% of cognac production. With the US, Japan and other Asian countries the largest markets, it’s no wonder that when those economies sneeze, Cognac gets the flu.
Cognac also simultaneously gains and loses from its international reputation as a luxury spirit. In Cognac’s bars and restaurants, locals routinely order their favorite brand in a tall glass with ice and tonic, a concept that leaves spirit sophisticates in the US dumbfounded. But when Alain Royer, master blender of A. De Fussigny cognac, surprisingly suggests this as an aperitif, it turns out to make a refreshing and quite acceptable highball. Locals routinely mix juice and other mixers with their VS cognacs and the cognac promotional bureau BNIC has launched a campaign in France to reverse shrinking usage. “Hep, glacon, un cognac,” ads say. Introduce your ice to some cognac.
What’s commonly done in Cognac may help explain an apparent US anomaly. While brands fight hard to retain their luxury image in the US, consumption growth has been driven by wide acceptance in the African-American market, where mixing the spirit with coke or other mixers has been historically well-received. While this fashion may be scorned by snobs, those in Cognac believe the younger manifestations of the spirit mix quite well.
“We know cognac has become very popular served with Coke in the US,” says BNIC boss Claire Coates, who pointed out the US preference for VS cognac, while the Asian market is very strong for VSOP expressions.
Cognac had grown dependent on continuing growth in Asia, where diners routinely order full bottles to be served before, during and after meals and left on the table, notes Coates. But the Japanese recession and slow Asian depletions in 1998 slowed things quite a bit. Cognac’s reputation as a luxury good may have backfired somewhat, but, Coates said, “As the Asian market has been getting into difficulty, we hope the US continues to get better.”
Cognac-makers also must struggle with the vagaries of weather in a way Scotch and bourbon makers don’t, since, like all brandies, cognac is a wine-based spirit. If, for instance, the weather turns bad, as it did around harvest time last fall when North American hurricane season sent chilly rains over the Poitou-Charentes region, cognac-makers wait nervously as their growers check the skies for drying sunshine. Otherwise, the grapes might rot and threaten the year’s production. And since cognac-makers by law can’t go outside for extra tons of grapes, they must make do with what’s available. “If there is a bad taste in the wine, it’s impossible to remove,” says Coates.
Cognac also labors under some restrictive French laws. Distillation of cognac may not start before the end of November, and must be completed by March 31, although many producers are finished by mid-February. Grains for malt beverages can be supplied from a variety of sources, while grapes must come from the region. The spirit also must be distilled in a traditional pot still and aged in Limousin oak. Without following these and other strict laws, the resulting spirit may not be called cognac.
Meanwhile, cognac makers and marketers are fighting hard around the world to build new business for their brands. Hennessy, Louis Royer, Pierre Ferrand and other firms have launched single district cognacs, with expressions coming from Grand Champagne, Petite Champagne, Borderies, Fine Bois and Bon Bois, or from single distilleries. Other makers, like Alain Royer, have worked at blending varieties to match with cigars. Still others have expanded beyond the VS-VSOP-XO tradition to develop bottlings that are more floral, or contain more aromas of dried fruit and nuts, or express certain characteristics that have previously been blended to form a single house style. Hennessy has been fighting back within Europe against the inroads of Scotch and bourbon, with some success, with its Pure White brand, targeted at the young consumer.
At the same time, Hennessy, Courvoiser and others have pushed mega-premium luxury packages that can reach into the four figures. They’re pulling out all the stops to keep Cognac from fading from the marketplace, with some effect.
Hennessy’s powerhouse-growth has given hope to many Cognac-makers. Since 1995, they’ve nearly doubled their volume in the US. Hennessy has become so strong, in fact, it is second only to California’s E&J brandy in the entire brandy category.