Asia at turning point says cognac chief

21 May, 2015

Asia, and specifically China, is heading back to growth following the Chinese government's clamp down nearly two years ago on extravagant entertaining, excessive drinking and gifting.

Charles-Armand de Belenet, Pernod Ricard's global marketing director for Martell Mumm Perrier- Jouët, was speaking to Drinks International the day after Pernod Ricard's celebrations at the Palace of Versailles for the 300th anniversary of its Martell cognac brand.

He said: "I believe this year is the turning point. Step-by-step the category is coming back to growth. The prestige side was in a trough last year but it is stabilising. The private sector is growing."

De Belenet said while ultra premium expressions which lie between the €1,500 - €2,000, have been hit badly, its Martell Noblige expression which is between VSOP and XO, is reporting double digit growth.

"The business gift category which was such a large part (in China) has, to a large part, disappeared and will not come back," he told DI. "The new generation is looking for premium and after a short term turbulence, I think we can see the end of this part. We will see in the next few months."

The Martell chief said the US., cognac's largest market predominately a VS market, was showing +16% volume growth. He said during the economic downturn, consumers downgraded to vodka and other white spirits. Now there was a trend to brown spirits and crafted products. Therefore Martell with its heritage and blending expertise was perfectly placed to capitalise on this emerging trend, he claimed.

On other markets, De Belenet said Russia was "suffering a lot" in terms of cognac sales due to the turbulent political situation and unfavourable exchange rates. "2014 was quite good but 2015 is difficult," he said.

He sees huge potential in Africa, specifically Nigeria, South Africa and, to a lesser extent, Angola. In Nigeria there is a new generation of leaders and entrepreneurs. They want to drink cognac and champagne, he said.

Turning to the Americas, excluding the US, De Belenet singled out Mexico as a huge whisky market but Martell had 70% of cognac sales and they needed to "fight hard against whisky"' he said.

Martell is the number two cognac brand behind LVMH's Hennessy. It claims to be the 'oldest brand among the large cognac houses'. The big four brands, Hennessy, Martell, Rémy Martin and Courvoiser, account for approximately 90% of cognac sales with Hennessy alone taking 40+%.

The Martell 300 celebrations last night (May 20) comprised a fly past by the French air force's elite pilots followed by a spectacular dinner for approximately 300 guests, with significant contingents from China, Malaysia and Vietnam, in the Palace of Versailles. Famous actress, Diane Kruger, who has become a global ambassador for Martell, was there to add further glamour to the occasion.

Martell has three expressions to mark the 300th anniversary. There is the: 300 Tricentenaire (assemblage of three vintages - 1957 from the premier Grande Champagne region, 1982 Fine Bois and 1979 Borderies) of which there are 3,708 bottles costing circa €800; Premier Voyage (300 x 1-litre bottles at €10,000); a limited Martell XO and Martell Cordon Bleu 1912 (the year the expression was introduced).

After all of Pernod Ricard's massive investments in scotch (Chivas & The Glenlivet) and Irish whiskey (Jameson), is it now Martell and cognac's turn to get the 'Pernod effect'?

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