COGNAC: AFTER A FEW EXCEPTIONAL YEARS, SHIPMENTS RETURNED TO NORMAL IN 2022 AND GROWTH PROSPECTS HAVE BEEN CONFIRMED
Shipments returned to normal in 2022, which was the third best year ever recorded in the history of the Cognac sector
The 2022 harvest was good, both in quality and quantity
Confidence in the mid-long-term was reasserted and 2023 planting requests have been confirmed
After outstanding results in 2021, 212.5 million bottles were shipped in 2022, representing a turnover of 3.9 billion euros ex-Cognac and a 4.8% drop in volume. Still, it ranked as the third best year in the history of the Cognac sector. With prospects looking bright in its various markets, the sector is confirming its growth objectives. The 2022 harvest was good both in terms of quality and quantity, with a production potential of 1,068,927 hl PA i.e. Cognac yields of 12.86 hl PA/ha, above the ten-year average.
A RETURN TO NORMAL FOR COGNAC SHIPMENTS IN 2022
After a couple of exceptional years, the Cognac sector saw shipments return to normal in 2022. With 212.5 million bottles shipped, representing a turnover of 3.9 billion euros ex-Cognac and a 4.8% fall in volume, 2022 was the third best year ever recorded in the history of the Cognac sector, just behind a record-breaking 2021 and 2019.
- The United States, the historic market leader for Cognac shipments, recorded a 3.2% fall in volume with 111.3 million bottles of Cognac shipped.
- Cognac’s second largest market, China, slowed by 12.8% with 29.6 million bottles shipped.
- In the context of the war in Ukraine and inflation, Europe shipments declined by 5.9% with 34.9 million bottles exported.
- Cognac’s fifth largest market, France, recorded a 2.8% drop in volume with 5.9 million bottles
- Growth was recorded in other countries, driven in particular by South Africa, Kenya and Vietnam, with a 20.9% rise in bottles exported.
A GOOD 2022 HARVEST AND STEADY DISTILLATION PROSPECTS
The harvest got off to an early start, beginning the first two weeks of September at the majority of winegrowing estates. Despite an unprecedented year weather-wise and a severe hailstorm on 20 June, production reached 122.42 hl volume/ha with an ABV of 10.5% and a pure alcohol yield of 12.86 hl PA/ha, above the ten-year average. Total production reached 1,068,927 hl PA including stockpiles in barrels. Production levels in 2022 will meet regional demands. The quality of distilled wine spirits is good. In addition, distillation began earlier than usual and the risk of rationing gas supplies this winter has decreased.
“The Cognac sector overcame the challenges of the health crisis and got back on track quickly and efficiently, resulting in exceptional growth in the last few years. Figures are now back to pre-COVID levels, marking the return to a long-term trend. Cognac professionals remain confident in the future and are investing significantly in Cognac markets and production to ensure the future and strength of our region,” Alexandre Gabriel, Vice-President of the BNIC, explained. “Although more volatile, the markets are increasingly looking for high-quality and authentic products and Cognac meets these expectations.”
MID AND LONG-TERM GROWTH PROSPECTS CONFIRMED
There are encouraging signs in the various Cognac markets. In China, where the impact of the COVID-19 pandemic continues to be felt, things should hopefully be looking up this year. The return to business and leisure trips has led to a boost in duty-free sales, and disinflation indicators are being observed in the United States. In this context, merchants are maintaining their investment pace in Cognac markets and the sector remains vigilant yet confident in its mid- and long-term growth prospects. The sector has confirmed its 2023 planting requests, representing 3,129 hectares in the Cognac appellation. They will be submitted to France AgriMer for assessment in late January. “We will continue to carefully monitor ongoing trends. If the situation were to change, our business plan would take this into account and our planting requests for next year would be adapted, as was already the case during the COVID-19 pandemic,” Christophe Veral, President of the BNIC explained.
With this confident mindset, the Cognac sector has fully confirmed its vision and collective projects, in particular the construction of the BNIC’s future headquarters. The building permit has just been issued and the works will begin in a few months to be completed in 2025. The building, designed by architect Wilmotte & Associés and built by the promoter Redman, will be located in the heart of the town of Cognac, on the banks of the Charente River. We would like to reiterate that the future headquarters of the BNIC will be a place of work, discussions and piloting the sector’s major scientific and technical ambitions. It will demonstrate the commitments of the Cognac sector in terms of sustainable development and its desire to build roots and invest in the town of Cognac and the region at large.
The sector is also working on implementing a new scheme to fund and conduct research in order to accelerate its environmental transition. This scheme, driven by the BNIC, will bring together winegrowers and négociants, as well as scientific and financial third parties. “From developing alternative vine treatments to adapting to climate change and improving the environmental performance of our distillation methods, we are putting everything in place to meet our three priorities: growth, sustainability and quality”, Christophe Veral concluded.
ABOUT THE BNIC
The BNIC, or Bureau National Interprofessionnel du Cognac, represents, develops and preserves the Cognac AOC (Appellation d’origine contrôlée), both in France and abroad.
In the 150 or so countries where Cognac is sold, this Geographical Indication provides consumers with a guarantee that they are buying an outstanding wine spirit. Comprising an equal number of members from the winegrowing and commercial sides of the industry, the BNIC is a coordination and decision-making body which brings together almost 4,300 winegrowers and grower-distillers, 120 professional distillers, and 290 merchants operating within the appellation.
The BNIC defends the interests of Cognac producers and consumers, with an unwavering commitment to everyone with an interest in this appellation.