The cognac & brandy market size was valued at USD 11.67 billion in 2021 and is projected to grow from USD 12.66 billion in 2022 to USD 18.17 billion by 2029, exhibiting a CAGR of 5.30% during the forecast period. North America dominated the cognac & brandy market with a market share of 35.21% in 2021.

Cognac & brandy can be any distilled spirit made from the fruit juice base of white grapes. The global popularity of premium alcoholic liquors and the demand for craft beverages among millennials is projected to broaden the scope of the market in the upcoming years. According to the “International Wine and Spirit Research,” 2019, the overall spirits volume consumption in the U.S. rose by 2.3%, led by an increment of 4% in the cognac segment. Moreover, both spirits are experiencing healthy growth, owing to the rising adoption of cocktail culture, surging socialization at restaurants and bars, and the escalated preference for premiumization in the food and beverage, which further propels the market.

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Segments

Super Premium Segment to Dictate Growth Due to High Premiumization

The market is segmented into value, premium, high-end premium, and super premium types. The super premium segment is expected to dominate due to the increasing trend of premiumization and the use of high-quality ingredients. This segment’s growth is fueled by rising demand from millennials eager to try premium drinks and the growing socialization culture, which further boosts market momentum.

On-Trade Segment to Lead Due to Increasing Number of Social Outings

Based on the distribution channel, the market is divided into on-trade and off-trade. The on-trade segment is expected to capture a significant share, driven by the increasing frequency of outings with friends and family and the rising social pressure to socialize. Meanwhile, the off-trade segment is projected to grow the fastest, driven by the increasing availability of products in retail stores, supermarkets, and online platforms.

Report Coverage

The report provides an in-depth analysis of the key market segments and trends. It discusses the driving and restraining factors affecting the market, including the impact of COVID-19. It also covers regional developments and strategies adopted by key industry players.

Drivers and Restraints

Rise in Alcohol Consumption to Propel Market Progress

The increasing consumption of alcohol during special events and social gatherings is expected to drive the growth of the cognac and brandy market. Both drinks are popular due to their complex flavors and versatility in cocktails or enjoyed on their own. The millennial demographic is particularly contributing to the rise in popularity. Companies are focusing on enhancing production capacity for high-quality drinks, with a focus on ingredient innovation. Additionally, the digitalization trend among younger consumers is fueling market growth.

However, the rising demand for low or non-alcoholic beverages could present a challenge to the market’s expansion.

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Regional Insights

North America to Lead Market Share Due to Growing Demand for Distilled Spirits

North America is expected to dominate the cognac and brandy market, driven by the rising demand for distilled spirits in the U.S. and Canada. The growing interest in artisanal spirits and the increasing number of craft distilleries are key growth drivers. For example, in September 2019, Copper & Kings American Brandy Co. launched the “American Craft Apple Brandy,” adding a new product line to its portfolio.

Asia Pacific is expected to be the second-largest region, as there is a shift from whiskey and vodka to brandy, with rising demand for locally produced brandies.

Europe is also set to see steady growth, driven by the increase in food service chain outlets offering a variety of spirits and the growth of the tourism industry.

Competitive Landscape

Special Product Launches by Key Players to Drive Market Growth

Key players in the cognac and brandy market, including Remy Martin, Pernod Richard, and Hennessy LVMH, have been increasing their production of premium spirits. Product innovations and special product launches through strategic collaborations help attract a larger customer base, boosting revenue. For example, in January 2022, Radico Khaitan Limited launched a limited edition “Celebration Pack” for its premium Morpheus brandy, available exclusively in select regions.

List of Key Players Profiled in the Report

  • Remy Martin (France)
  • Hennessy LVMH (France)
  • Pernod Ricard (France)
  • Radico Khaitan Ltd. (India)
  • Naud Spirts & Distillery (France)
  • Emperador Distillers Inc (Philippines)
  • Suntory (Japan)
  • Meukow Cognac (France)
  • Thomas Hine & Co. (France)
  • Maison Ferrand (France)

Key Industry Development

  • November 2022: Louis XIII and Leela Palace Delhi announced a collaboration offering a full-meal cognac pairing experience, with cognac served in a bell-shaped crystal glass, allowing consumers to enjoy the drink collectively with their meals.

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