In 2023, global sales of French spirits experienced a significant decline of 12% in value, reaching €4.8 billion, while volumes dropped by 13% to 48.4 million cases. This drop in both sales and volume of French spirits exports appears concerning. Is there a bright spot? 

French Spirits Exports

Overall French wine and spirits exports also decreased by 5.9% to €16.2 billion, with volumes down by 10.4% to 174.5 million cases. Factors contributing to this decline included high inflation, lower consumption levels, and decreased disposable incomes. 

The US is the largest market for French wines and spirits. It saw exports slump by 22%, which experts say is primarily owing to stock build-ups during the pandemic. Similarly, exports to the UK dipped by 1%, with sales of sparkling and still wines declining by 5% in volume. In Asia, exports remained relatively stable, with China showing a rise in spirits exports but a decline in wine exports. One report noted, “China bucked the trend with a 3% rise for spirits, led by Cognac, while wines fell by 20% in value.” The news for wine out of China has been dismal for some time. Might French spirits persevere with market growth? We’ll discuss that below because such figures coincided with the Chinese government's anti-dumping inquiry into brandy and Cognac imported from the EU. 

Across all spirits segments, including Cognac, vodka, and liqueurs, declines rolled out both in volume and value. This downward trend serves as a reminder for exporting companies to adapt to changing consumer and market demands. It also underscores the importance of strong support from public authorities to sustain export success. In the US, French spirits sales remained relatively flat in both volume and value terms in 2023. One way for French spirits businesses to help maintain and increase the US and UK markets is through spirits competitions, winning awards and accolades.  

Premiumization and Marketing Strategies

Another key issue is the premiumization and branding of French spirits. Martingale Cognac and The Gardener Gin, two French spirits producers, recently announced a strategic partnership to enhance their presence in the American market. The Gardener Gin, founded by actor Brad Pitt and master distiller Tom Nichol in 2023, will be integrated into Martingale Cognac's marketing campaigns in New York and California. Despite their differing approaches to French luxury spirits, the collaboration aims to leverage each brand's unique identity. Martingale Cognac, with its deep roots in craftsmanship and family production, sees this partnership as a natural fit with Famille Perrin, the producer of The Gardener Gin, which also boasts a rich history of family production. Martingale Cognac, known for its flagship expression featuring sandalwood, acacia, almond, and vanilla flavors, is led by fourth-generation distillers Guillaume and Amaury Thomas. By contrast, The Gardener Gin, crafted on the French Riviera, offers a blend of juniper, angelica, licorice, and coriander with pink grapefruit and bitter orange, bringing a taste of London Dry gin to France. 

Would these products sell in China, where Cognac is a bright spot?

Source: JustDrinks/shutterstock

The China Situation for French Spirits

In recent months, the European Union's spirits industry, particularly French brandies like cognac, has become embroiled in trade tensions with China. It began with China launching an anti-dumping investigation into European wine spirits in January, primarily targeting French brandies. This move was seen as a response to the EU's assertiveness in trade ties with China, including the EU's probe into Chinese electric vehicle subsidies. 

The Chinese investigation, which is expected to last 12 to 18 months, focuses on suspicions that European producers are dumping their products on the Chinese market. The probe escalated in March when well-known French spirits brands such as Martell & Co, Jas Hennessy & Co, and E. Remy Martin & Co were included, indicating a widening of the investigation's scope. When Chinese President Xi Jinping recently visited France’s President Macron, as AP reported, “Xi presented the French president with a striking stuffed bird, French-language books published in China, and a painting. Macron offered rare volumes by Victor Hugo, the first French-Chinese dictionary, a sculpted glass vase from Amboise — and two bottles of Cognac, a Hennessy X.O., and a prized Louis XIII by Remy Martin.” Not too subtle.  

These developments have raised concerns about the impact on international trade between the EU and China. The cognac industry, represented by the Bureau National Interprofessionnel du Cognac (BNIC), views the investigation as a procedural step and is prepared to collaborate actively, as is, apparently, President Macron.

Source: AFP/Getty

Overall, this situation highlights the complex interplay between trade politics and the spirits industry, particularly regarding the EU's trade relationship with China. It also underscores the challenges faced by European spirits producers in navigating global trade dynamics. 

International Spirits Competitions Offer a Growth Strategy

Entering international spirits competitions like the London Spirits Competition could benefit French spirits companies in several ways. First, winning medals or awards at such prestigious events can significantly enhance a brand's reputation and credibility, both domestically and internationally. This recognition can help attract new customers and increase sales. 

Second, participating in these competitions provides an opportunity for French spirits companies to benchmark their products against competitors from around the world. This feedback can be invaluable for refining their products and marketing strategies to meet consumer preferences better. 

Third, the exposure gained from participating in and winning awards at international competitions can help French spirits companies expand their reach into new markets. It also strengthens their position in existing markets by reinforcing the quality and uniqueness of their products. 

Overall, entering international spirits competitions can be a strategic investment for French spirits companies looking to enhance their brand visibility, credibility, and competitiveness in the global market, including China.

And for China?

Winning awards at these competitions can enhance a brand's prestige and reputation, which can be particularly valuable in a market like China where status and luxury are important considerations for consumers. 

Chinese consumers often perceive international awards as a mark of quality and authenticity, especially in the premium and luxury segments. Therefore, for French spirits manufacturers and distributors, winning medals or accolades at renowned competitions can help French spirits companies differentiate their products in the competitive Chinese market and attract discerning consumers. 

Additionally, participating in international competitions can provide valuable feedback on product quality and consumer preferences, which can help French spirits companies tailor their products to suit the Chinese market better.

Header Image Source: Martingale Cognac