Cognac Market Size, Share, Growth, Trends, and Global Industry Analysis: By Grade (VS, VSOP, XO), By End-User (Household & Residential, Institutional Buyers, Restaurants & Pubs, Others), By Distribution Channel (On-trade, Off-trade) and Region Forecast 2020-2031

Cognac Market size was valued at US$ 4,665.9 million in 2024 and is expected to reach US$ 5,738.9 million by 2031, growing at a significant CAGR of 3.0% from 2025-2031. Moreover, the U.S. Cognac Market is projected to grow significantly, reaching an estimated value of US$ 5,738.5 Million by 2031.The market refers to the global trade and consumption of cognac, a specific type of brandy that is exclusively produced in the Cognac region of France under strict geographical and production regulations. Distilled from specific grape varieties such as Ugni Blanc and aged in French oak barrels, cognac is characterized by its refined aroma, rich flavor, and aging classifications—VS (Very Special), VSOP (Very Superior Old Pale), and XO (Extra Old). The market encompasses the production, distribution, and retail of cognac across various price points and demographics, including both premium and mass-market consumers.

The market has experienced steady growth driven by rising demand for premium spirits, expanding global appreciation for luxury alcoholic beverages, and increased brand consciousness among consumers. The market has seen strong traction in regions like Asia-Pacific, particularly China, which accounts for a significant portion of global exports. Meanwhile, Western markets such as the U.S. and Europe continue to maintain a robust base of loyal consumers. With growing interest in craft spirits, mixology culture, and luxury lifestyles, cognac is gaining prominence in bars and fine dining establishments worldwide, further propelling its market expansion.

Facts & Figures

• In 2023, 96.8% of cognac produced in France was consumed outside the country, highlighting its strong international demand. The 2023 harvest yielded the equivalent of 412.5 million bottles of cognac, marking the largest harvest ever recorded for grape varieties dedicated exclusively to cognac.
• Hennessy led global cognac sales in 2022, with 6.9 million nine-liter cases sold, capturing over a quarter of the U.S. market.
• In October 2024, China imposed new tariffs ranging from 30.6% to 39% on European brandy imports, including cognac, in response to the European Union's tariffs on Chinese electric vehicles.

Key Developments:

• In July 2024, Pernod Ricard agreed to sell its portfolio of international wine brands to Australian Wine Holdco Limited. This divestment was expected to allow Pernod Ricard to focus on its core spirits business while enabling the wine brands to thrive under new ownership. 
• In May 2024, Campari Group finalized its acquisition of Courvoisier from Beam Suntory, marking a significant expansion in its premium spirits portfolio. This strategic move aims to strengthen Campari's presence in the market and enhance its competitive positioning.

Cognac Market Segmentation:

Based on the grade:

• VS (Very Special)
• VSOP (Very Special Old Pale)
• XO (Extra Old)

Among the various cognac grades, the XO (Extra Old) segment is anticipated to lead the market, driven by a strong global trend toward luxury and premiumization. XO cognac, known for its extended aging process—at least ten years in oak barrels—offers a deeper, more refined flavor profile, appealing to discerning consumers seeking superior quality and exclusivity. The surge in high-net-worth individuals and affluent middle-class consumers, particularly in Asia-Pacific and North America, has fueled demand for luxury spirits. XO cognac has become a symbol of prestige and celebration, often gifted during holidays and corporate events.

Additionally, the rise of connoisseur culture and interest in heritage-rich alcoholic beverages has made XO a preferred choice among collectors and enthusiasts. Producers are also investing heavily in branding, storytelling, and limited-edition releases, which further enhances its appeal. As consumers continue to favor experiences over quantity, the rich tradition and craftsmanship of XO cognac are expected to drive its dominance in the market.

Based on the end-user:

• Household & Residential
• Institutional Buyers
• Restaurants & Pubs
• Others

Amongst the end-user groups, Restaurants & Pubs are expected to dominate the market, driven largely by increasing popularity of on-trade drinking and experiential dining lifestyles. Consumers are looking for premium drinks in social venues more than ever before, and cognac—especially in VSOP and XO varieties—has emerged as a top choice in high-end bars, lounges, and restaurants. The revitalization of cocktail culture has also increased cognac's status as a creative ingredient in upscale mixology, adding to its prominence in drink menus worldwide. Urban clubbing scenes in markets like the U.S., China, France, and South Africa are major drivers of this demand.

Also, bartenders and sommeliers are promoting cognac as an upscale, heritage-driven spirit, which has raised its profile and appeal among young, high-income consumers considerably. This trend towards premium drinking culture, coupled with increased tourism and hospitality sectors, makes the Restaurants & Pubs segment a powerhouse in cognac sales worldwide.

Based on the distribution channel:

• On-trade
• Off-trade

Off-trade distribution channel is expected to dominate the market, led by changing consumer demand for in-home consumption and increased availability of premium alcoholic drinks in retail and e-commerce channels. Off-trade comprises sales via supermarkets, liquor stores, duty-free outlets, and increasingly, online stores—channels that have achieved significant momentum on the back of convenience and increased product availability. With evolving lifestyles and the growth of home-based socializing, customers are choosing to buy cognac for home consumption, as a gift, or for private gatherings. The pandemic also fueled this trend, leading cognac brands to increase their retail presence and digital marketing efforts.

Moreover, competitive promotions, loyalty schemes, and bundle deals in off-trade environments have been able to attract price-conscious as well as premium buyer segments. The capability to compare brands, read ratings, and see a greater variety has empowered consumers, and off-trade has become the most convenient but also the most impactful medium to influence cognac buying decisions worldwide.