BevAlc Insights’ 2021 Cognac Forecast
Explore the optimistic outlook for this fast-growing brandy subcategory, despite supply shortages
One of Drizly’s fastest-growing liquor subcategories, Cognac is seriously in demand by consumers — to the point where major brands can be difficult to keep in stock, particularly during the holidays. What’s ahead for the Cognac category in the months and years to come?
Cognac’s Upward Trajectory
Cognac is a subset of the brandy subcategory, which holds four percent of liquor share on Drizly in 2021 to date. It is by far the largest brandy subcategory on the platform, with 88 percent share of sales, and it’s the sixth-largest liquor subcategory overall on Drizly.
While Cognac’s 3.7 percent share is outperformed by larger liquor subcategories like bourbon, vodka, and tequila, it’s picking up pace quickly. It’s among Drizly’s fastest-growing liquor subcategories year-over-year after beginning to show spikes in May, and a Cognac brand ranked among the top 10 liquor brands for Memorial Day Weekend. In September and October of 2020, Cognac was up 56.2 percent in off-premise sales, according to Nielsen.
But the category was already experiencing growth pre-pandemic; 2019 marked the fifth consecutive year of growth for Cognac exports. “Cognac share has been on the rise over the past few years,” says Liz Paquette, Drizly’s head of consumer insights. Within the brandy subcategory, Cognac’s share increased from 82 percent in 2019 to 88 percent in 2021 to date, and within the total liquor category, it increased from 2.4 percent in 2019 to 3.7 percent in 2021.
In fact, it isn’t changing demand that may slow growth for this brandy category; it’s supply. Supply issues have slowed the growth rate for Cognac in the U.S. in 2018 and 2019, and there were widespread reports of retailers being unable to keep Cognac in stock during the 2020 holidays.
Big Names, Increasing Price Tags
Cognac sales are dominated by a few major brands, which is likely one of the reasons why the category has been hit so hard by product shortages. Though most of these brands have remained consistent year-over-year, Louis XIII, a luxury cognac by Rémy Martin, has broken into the top 10 best-selling Cognac brands on Drizly this year. Within the top 10 best-selling Cognac SKUs, Rémy Martin XO Excellence was a new entrant in 2021.
Drizly’s Top-Selling Cognac Brands, 2021 to Date
- Remy Martin
- Pierre Ferrand
- Louis XIII
- St Remy
Drizly’s Top-Selling Cognac SKUs, 2021 to Date
- Hennessy V.S Cognac
- D’USSÉ® VSOP Cognac
- Remy Martin VSOP
- Hennessy V.S.O.P Privilege Cognac
- Rémy Martin 1738® Accord Royal
- Courvoisier VS Cognac
- Hennessy Black Cognac
- E&J VSOP Premium Brandy
- Hennessy X.O Cognac
- Rémy Martin XO Excellence
The overall premiumization trend in the liquor category can clearly be seen within the Cognac category, where the average unit price has risen from $39.40 in 2019 to $43.10 in 2021 — a nine percent increase. “The premiumization trend benefits Cognac, which typically falls into a more luxury category among the liquor subcategories,” says Paquette.
Cognac in the Months and Years to Come
Boosted by consistent year-over-year growth, Cognac is poised to be a strong category for retailers in coming years. According to analysis firm Grand View Research, global Cognac sales could be worth $5.09 billion by 2027.
Through the end of 2021, expect Cognac to be an even stronger seller at retail, which may once again prompt supply shortages. Retailers should be prepared to purchase inventory early and look to rising brands rather than big sellers should top-selling SKUs become allocated.
Drizly’s Fastest-Growing Cognac Brands, 2021 to Date
- Hennessy VSOP Privilege Cognac Mixology Gift Set
- Courvoisier Avant-Garde Cognac
- Hennessy V.S.O.P Privilege NBA Gift Box
- Conjure Cognac
- Courvoisier Cognac VS Gift Set
Drizly’s fastest-growing Cognac brands year-over-year indicate a clear rise in gift sets within the category. “This is interesting given that Cognac gift share skews lower than the overall average of Drizly orders,” says Paquette, noting that gift order share of Cognac is about half of what it is for Drizly sales overall, “suggesting that gifting may be a trend to watch within the Cognac category, particularly in this upcoming holiday season.”