Martell Rises to the #2 Spot, while Smaller Houses Struggle to find Supplies

When an industry is experiencing a so called “golden age,” such as is currently the case regarding cognac, there are always winners and losers.  For instance, Martell Cognac – owned by the drinks giant, Pernod Ricard – is poised to overtake Remy Martin and take the coveted 2nd place in the cognac stakes, behind Hennessy.

With sales of 2 million cases, Martell Cognac – in the year of its centenary celebrations of the esteemed ‘Cordon Bleu’ – has seen sales in terms of volume rise by 8 per cent and turnover up 23 per cent.  But their 2 million case benchmark still has a long way to go to catch up with the giant production machine that is Hennessy Cognac.  With 5.4 million cases sold in 2011, the world’s number one cognac (owned by LVMH) has upped its purchasing might by raising its purchase price of each hectolitre by 3 per cent.

This may well have the growers rubbing their hands in glee, but for the smaller cognac houses that might not have fixed price contracts, this is proving an ever increasing problem.  Unable to find enough raw materials to purchase at a price that won’t affect their profitability, it seems that the need for more Cognac vineyards is becoming more crucial than ever.

Martell’s Cordon Bleu Celebrations – with a serious side

Following the discussions at the recent Espace 3000 Cognac meeting about the way forward for the wine growers of Cognac, this was further re-iterated by Lionel Breton, CEO of Martell Mumm Perrier-Jouet.  He addressed the industry at a gathering of over 2000 delivery drivers and staff at one of the Cordon Bleu centenary celebrations.

Last week, the gardens of the Chanteloup Estate played host to a prestige evening by Martell.  This was in honour of both Cordon Bleu Cognac and the enormous team who all play their own part in its creation and distribution.

Breton said that whilst the future for cognac was looking extremely bright, the need for more eaux-de-vie was paramount.  He said that this was an “essential issue,” and that the trading houses cannot survive without the suppliers.  Always a touchy subject, he also mentioned that it seemed inevitable that some of the smaller cognac houses might one day not be able to compete with the buying power of the ‘big four.’

China still driving sales

With shipments of bottles up 5.6 per cent over the last year, and worldwide turnover up 9.3 per cent to 2,128 billion euros, it’s important to note that these massive rises are not across the board.  Statistics from the BNIC show that this is solely driven by the Far Eastern market.  The NAFTA region (North America) remains static, and in Europe sales are down 3.4 per cent.  And when you look at sales in France, once the highest purchaser of their national treasure, they now account for only 2.75 per cent of the cognac market – most definitely on a downward spiral.

VSOP, XO and older qualities continue to rise at the fastest rate, thanks to the Chinese penchant for these cognacs.

Sources: www.sudouest.fr, www.charentelibre.fr

Comment (1)

  1. Henry June 1, 2012 at 1:28 am

    Martell still # 1 and always will be in my heart in the world the finest vsop 3star 1920 S BEFORE THAT AND TO THIS 2012 WONT CHANGE MY LOVE FOR THEM LOVE THAT MARTELL

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