Cognac's Asia Boom Proves Enticing for France's Unloved Tipples

French sellers are hoping that armagnac and calvados can carve a niche for themselves in lucrative Asian markets as demand wanes in France. Cognac currently accounts for 67 percent of French spirit exports, but rival digestifs and eaux-de-vie are seeking to seize more of that market and offset slumping domestic sales as France's population becomes increasingly abstemious.

Calvados producer Didier Bedu hopes to convince customers with his bucolic vision of 'le terroir', the concept of earth and environment that is accorded near-mythic status in French agriculture.

"What we have to sell is romanticism, France, authenticity," said Bedu at Hong Kong's major wine and spirits fair, Vinexpo, where producers from around the world come to cultivate Asian demand.

"To the Chinese, we talk horses and casinos, everything that Normandy has to offer, as the essence of calvados," said Bedu, of the famous Chateau du Breuil distillery and president of trade group l'Interprofession des Appellations Cidricoles (IDAC).

Calvados, a brandy made from apples in northwestern France, and armagnac, distilled from grapes in the southwest, belong to a category of spirits known as "eaux-de-vie".

Armagnac is usually taken neat, whereas calvados can either be drunk with ice, or slightly warmed, or even mixed into a cocktail or coffee.

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Each represented just one percent of the value of spirit exports in 2013, but even those tiny slices of the pie generated 45 million euros ($60 million) for manufacturers.

Cognac, by contrast, is already well established as a prestigious drink in China, frequently used to flaunt status and toast business deals.

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Producers hope they can harness the momentum generated by cognac to build popularity with Asia's connoisseurs, and the lesser-known varieties have already gained a following in some countries in the region.

- 'Crisis' at home -

J Goudoulin armagnacs launched four years ago in Asia and are now exported to Malaysia, Japan, Singapore, China and Hong Kong.

From small beginnings in 1935 on a farm in a pretty Gascony valley, the brand now registers 800,000 euros (more than a million US dollars) in annual turnover -- 40 percent of that is generated abroad, 10 percent in Asia.

"The consumption of spirits has fallen away in France," said Catherine Bouteloup, the brand's commercial director, a phenomenon driven by mounting health concerns which also also affecting domestic wine sales.

"The move into exports was a response to that crisis."

And the market is growing, even though neither armagnac nor calvados have the marketing budget to promote themselves to distributors, let alone consumers.

"Armagnacs remain unknown to the general public although we note a positive trend," says Cyril Pilard, director of the company Wine Selections which represents Francis Darroze armagnacs in China.

Prospects for growth are huge -- 97 percent of the cognac produced in France is sold abroad, while currently 57 percent of the nation's armagnac and calvados goes overseas.

China is now the largest importer of armagnac, ahead of Britain, while calvados is popular with Germans, Belgians and Scandinavians.

But while cognac is produced on a grand scale, the lesser-known digestifs are manufactured in areas with limited production capacity. France produces 160 million bottles of cognac each year, against six million for each of the other two spirits.

Armagnac has been given a boost by the establishment in China of dedicated "Maison et comptoirs" showrooms in 2013, which showcase the lifestyles of the Aquitaine and Midi-Pyrenees regions.

One such "maison" opened in Wuhan in July last year, another will open in Chengdu in 2014, and further locations are planned in Beijing and Shanghai in the medium term, said Julien Layrisse, who manages the project in China.

Other Chinese enthusiasts are making the trip to France to find out first-hand the history and method behind the production of French spirits.

"Regularly hosting Chinese visitors allows us to share the know-how and heritage behind the production of armagnac," says Jacques Hauller of the Gensac estate in the Gers region.

A Chinese manager now oversees exports to Asia from the chateau, says Hauller.

"This allows us to develop a good approach in terms of countering problems specific to culture, language, traditions, marketing," he said.

Source-AFP