Official figures for the bumper 2018 harvest have yet to be published but it is anticipated that for the first time ever, the quantity of eau de vie produced will exceed 1 million hectolitres of pure alcohol. Despite the much-publicised growth in cognac sales over recent years, sales over the last 3 months, including Christmas, have been down, year on year. In particular, exports to North America and China have been affected with the latter seeing a 4% reduction. The authorities in China are trying to reduce their imports across the board so this is likely to be a contributing factor. Interestingly though, Bordeaux wine has also seen a drop of 13% in sales worldwide during the Winter 2019.
The Cognac Region has once again been hit by severe hailstorms. At the end of May hailstones, some the size of golf balls, were seen in the south of Charente-Maritime, the Borderies, the west of Matha and the Rouillac area. In total, more than 10,000 hectares in the Cognac region were affected. However, an original estimate that 25% of the total crop was damaged has now been revised to 5-6% maximum. Although some areas were severely affected at the time, it now appears that the actual damage done is less than was originally anticipated. Harvest hopes have also been given a fresh boost with the sunny weather that followed the earlier storms, allowing the crops to ripen better than normal. It is expected that this year’s yield will be at least up to normal levels of 12 hectolitres of pure spirit per hectare. If this does prove to be the case it should help to stabilise cognac prices which have been talked up recently by fears of a small harvest.
For the 3rd year running, cognac exports have increased with a 10% growth in volume and a 15% growth in value. The US retained its position as the largest cognac market. China has led the return to growth in the Far East. Prosperity in Europe has also returned thanks mainly to renewed interest from Russia and the Baltics. Naturally, this good news has led to speculation of more cognac house takeovers in the Cognac region. Some major non-cognac companies may be looking to extend their portfolio in this area as a good investment. It is also understood that hefty price increases should be expected this year, especially amongst the older cognacs. Beware, new price lists are imminent!